Neil_P2PBlog
P2P Blogger
Use @p2pblog to tag me :-)
Posts: 355 
Likes: 209
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Post by Neil_P2PBlog on Aug 6, 2016 20:07:57 GMT
If the Bank of England cuts interest rates to negative levels... could banks not just make a huge vault in their basement, convert their reserves to cash notes and store for (almost) free instead?
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Post by buttchopf23 on Aug 6, 2016 22:06:04 GMT
the cost for insurance would be sky high and there is not equal paper money available as electronical money is on their accounts. and maybe some other points i cant think of at the moment
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registerme
Member of DD Central
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Post by registerme on Aug 7, 2016 0:34:31 GMT
But the abstract theory is correct. Everybody would pull there money from banks and hide it under their mattress / pay their taxes ahead of time / load up their Oyster cards as much as possible etc. In short "bank" as much as possible now / "pay as much as possible now" for things that are likely to be more expensive in the future.
That's why central bankers like Carney, Yellen and Draghi are so intent on repeating the mantra that "we can't do it alone, you politicians have to fix ^&*".
And they're right.
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Post by wiseclerk on Aug 7, 2016 7:07:27 GMT
Everybody of course would put it in p2p lending accounts instead  |
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jonah
Member of DD Central
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Post by jonah on Aug 7, 2016 7:51:49 GMT
That's why central bankers like Carney, Yellen and Draghi are so intent on repeating the mantra that "we can't do it alone, you politicians have to fix ^&*". And they're right. The Autumn statement is arguably the most important uk financial plan for the next 5 years... How will they government help with the above. The 'what does brexit look like' statement is arguably the most important uk plan for the next 50 years...
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Post by jevans4949 on Aug 12, 2016 2:13:40 GMT
I heard a comment recently that the negative interest rates in the EU were indeed leading to a boom in the sale of safes!
It's my belief that the lack of investments being made is not the shortage of money, it's the lack of opportunities to make money out there - especially in the high-wage, high regulation EU when trying to compete with China and other Asian countries.
Also, I believe retired people relying on investment income are less likely to spend their savings when their income is falling, and most people who have saved in the conventional way do not feel qualified to make a judgement on more risky investments.
Inflated levels of house prices in various countries, including the UK, is probably in part due to the fact that this is one type of investment that ordinary people do understand.
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