Tuesday, Feb 2, 2016
What is Negative Interest?
Canada can fall into the banking trap
Betty Krawczyk, Cumberland, BC/YouTube image
ondering why the stock market has gone through the roof this past week? Here on the west coast of BC all we have to do is look across the ocean to Japan. Japan has just announced they will join The European Central Bank, The Swiss National Bank, along with the central banks in Denmark and Sweden in slashing bank interest rates into negative interest territory.
An article in the Financial Post entitled
(Canada is flirting with a bizzaro world of negative interest rates)
John Shmuel warns us that Canada could be next in line to embrace this
banking anomaly. He writes: “Bank of Canada Governor Stephen Poloz
discussed negative rates at a luncheon in Toronto last month, putting it
on the radar here.”
So, the central banks will charge the other banks money for the privilege of parking their money instead of loaning it out. In turn the regular banks that we know in our communities will pass on the fees to us, the consumers. Instead of a miniscule amount of interest money being paid by the banks to people with banking accounts, we will be forced to pay the banks for keeping our deposits at all. And that’s the big goal. Then people will start spending their money instead of paying to have it stored in a bank and voila, the economy will bloom. But will it? More next time.
Watch a 5 min. YouTube clip here.
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