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Thread: European Central Bank adopts negative interest rates

  1. #21
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    Re: European Central Bank adopts negative interest rates

    Quote Originally Posted by Mr.Nick View Post
    Also, I bet Europeans will start hoarding money themselves like people did in the US back around the turn of the 20th century or around the Great Depression.

    I don't know what the hell these European idiots are thinking?

    If I had investments in European stock or the Euro I would pull out immediately...

    Also, given these new policies what's to stop another country (say the Saudi's) from literally buying the European economy then holding it hostage?
    You are incompetent in such discussions.
    I made a post, #20, read it, understand it and become enlightened.

    Quote Originally Posted by Blue_State View Post
    It will kill growth.
    No, it won't.

    You too are incompetent in such discussions. Same advice, read post #20

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    Re: European Central Bank adopts negative interest rates

    Not gonna work guys, its not going to work.

    Hell, why dont we just start up the Subprime market again ?

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    Re: European Central Bank adopts negative interest rates

    Quote Originally Posted by Rainman05 View Post
    You are incompetent in such discussions.
    I made a post, #20, read it, understand it and become enlightened.



    No, it won't.

    You too are incompetent in such discussions. Same advice, read post #20
    What a joke.... The only incompetent person here is you.

    What do you think will happen with forced lending and "negative interest rates?"

    All that does is force spending and without interest rates an economy cannot grow" - "free for all spending" doesn't grow an economy.

    Oh not to mention it makes banks obsolete if they're charging you to hold your money....

    This is nothing more than a state sponsored armed robbery...

    This will not grow an economy - this will just invite people to start hording money - which they will begin doing.

    The funniest part or ironic part about this idea was the Euro.... The European market is crashing because of the Euro, and these ****heads solution is to kill the banks and force lending/spending.

    The way they handled this situation is the same way a 12-year old would handle the situation (and I might be too generous there)...

    I understand economics - maybe not the pseudo-economics that the EU has created which is fantasy land economics which make Keynesian economics look like true capitalism (which is part of the problem) but I do know this - this idea will financially CRUSH the EU and create economic chaos...

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    Re: European Central Bank adopts negative interest rates

    Quote Originally Posted by Mr.Nick View Post
    What a joke.... The only incompetent person here is you.

    What do you think will happen with forced lending and "negative interest rates?"

    All that does is force spending and without interest rates an economy cannot grow" - "free for all spending" doesn't grow an economy.

    Oh not to mention it makes banks obsolete if they're charging you to hold your money....

    This is nothing more than a state sponsored armed robbery...

    This will not grow an economy - this will just invite people to start hording money - which they will begin doing.

    The funniest part or ironic part about this idea was the Euro.... The European market is crashing because of the Euro, and these ****heads solution is to kill the banks and force lending/spending.

    The way they handled this situation is the same way a 12-year old would handle the situation (and I might be too generous there)...

    I understand economics - maybe not the pseudo-economics that the EU has created which is fantasy land economics which make Keynesian economics look like true capitalism (which is part of the problem) but I do know this - this idea will financially CRUSH the EU and create economic chaos...
    Sure you do.

    This proves just how incompetent you are.

    if you hoard money, what happens when money becomes subjected to inflation? It becomes devalued. that's right, so hoarding money means that tomorrow your money is worth less. SO why would people hoard money? No they won't, they would spend money and maybe invest money so that if you invest it you get something out of it that is greater than the value you get from hoarding it which is negative value due to inflation. So now that we have the principles settled in, why don't you gracefully tug your tail between your legs and recognize that you know nothing, Jon Snuuuh.

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    Re: European Central Bank adopts negative interest rates

    Quote Originally Posted by Fenton View Post
    Not gonna work guys, its not going to work.
    Why?
    Go on, daze me with your unmatched insight. I'm sure it's more insightful than that of Mr.Nick.

    EDIT: Also, Europe doesn't have subprimes. European banks however did buy toxic US subprimes like all the US banks did and that was a big mistake.

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    Re: European Central Bank adopts negative interest rates

    Quote Originally Posted by Fenton View Post
    Not gonna work guys, its not going to work.

    Hell, why dont we just start up the Subprime market again ?
    It may have worked about 100 years ago but the fact remains this is a global market/economy and this idea would have only worked about 100 years ago in small communities.

    The thought process behind the idea ignore the "global economy" aspect, as if the EU is segregated from the rest of the world.

    Their idea destroys the idea of using a bank - not only that but is basically forcing banks to lend (other peoples money) at pretty much zero interest. The funny part is that everyone is going to pull their money out of the banks and there will be no money to lend and the banks will go bankrupt...

    So I suppose their solution is to get rid of banks entirely, and I don't think the global market will respond kindly to this policy. In one swift move the EU just segregated itself from the global financial community....

    This is what happens when you allow governments to have too much power - especially when you have a union of governments.

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    Re: European Central Bank adopts negative interest rates

    Quote Originally Posted by Rainman05 View Post
    Why?
    Go on, daze me with your unmatched insight. I'm sure it's more insightful than that of Mr.Nick.

    EDIT: Also, Europe doesn't have subprimes. European banks however did buy toxic US subprimes like all the US banks did and that was a big mistake.
    I'll tell you why - because it makes banks moot and will eventually bankrupt the banks entirely once individuals start pulling their money from the banks.

    How can a bank lend money when they have none, because they're basically charging people to hold their money.

    What's the next idea going to be? force people to use banks? prevent them from pulling their money so it can be "loaned out" at basically zero percent interest?

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    Re: European Central Bank adopts negative interest rates

    Quote Originally Posted by Mr.Nick View Post
    It's basically nothing more than forced lending and forced spending.

    I'll say this much tho - I have never heard of a "negative interest rate."

    It appears what the EU is attempting to do is force an "economic boom" with this nonsense policy.

    I wonder how they're handling investments???

    And as far as the "rich getting richer" I don't see how that is even remotely possible considering the government(s) are basically forcing people to spend and not save - which is the entire point of this nonsense in the first place.
    Yeah, I was wondering the same thing. It's forcing the banks to not stockpile money and instead invest it.

    The worldwide banking crisis occurred when the risky loans that banks were making were not backed by sufficient capital to ensure liquidity in the market. Now that banks have a stockpile of money the EU is forcing them to pull the money out of the bank and make risky investments....
    Give a man a fish and he eats for a day. Teach a man to fish and he stops voting for the Free Fish party.

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    Re: European Central Bank adopts negative interest rates

    Quote Originally Posted by Mr.Nick View Post
    I'll tell you why - because it makes banks moot and will eventually bankrupt the banks entirely once individuals start pulling their money from the banks.

    How can a bank lend money when they have none, because they're basically charging people to hold their money.

    What's the next idea going to be? force people to use banks? prevent them from pulling their money so it can be "loaned out" at basically zero percent interest?
    I didn't ask you that question, I asked the other guy, Fenton. You still fail to reply to the comment I addressed you.

    Comment #24.
    Sure you do.

    This proves just how incompetent you are.

    if you hoard money, what happens when money becomes subjected to inflation? It becomes devalued. that's right, so hoarding money means that tomorrow your money is worth less. SO why would people hoard money? No they won't, they would spend money and maybe invest money so that if you invest it you get something out of it that is greater than the value you get from hoarding it which is negative value due to inflation. So now that we have the principles settled in, why don't you gracefully tug your tail between your legs and recognize that you know nothing, Jon Snuuuh.
    Do reply genius. Come on.

    --------
    You have no clue what you're talking about. It's laughable if it isn't so sad.

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    Re: European Central Bank adopts negative interest rates

    Quote Originally Posted by jmotivator View Post
    Yeah, I was wondering the same thing. It's forcing the banks to not stockpile money and instead invest it.

    The worldwide banking crisis occurred when the risky loans that banks were making were not backed by sufficient capital to ensure liquidity in the market. Now that banks have a stockpile of money the EU is forcing them to pull the money out of the bank and make risky investments....
    Unfortunately, somebody didn't read the article.

    And ofc, I mean you.

    Offer long-term loans to banks at cheap rates until 2018. The targeted loans would be charged a fixed rate, meaning that the rate could not rise, even if the ECB raises its benchmark. That gives banks confidence they have cheap funding out through 2018. The loans would be capped at 7 per cent of a bank's lending to companies.
    Start doing "preparatory work" on a program to buy batches of loans to small businesses in the form of bonds, a step to funnel more credit to companies through financial markets.
    Stop collecting weekly deposits aimed at offsetting the monetary effects of earlier bond purchases. That would leave an additional 175 billion euros in the financial system that banks could in theory use to lend to each other or to companies.
    The money is for the most part, directed. You can't use that money for stuff that isn't in the contract. So as I said in post #20, I, the ECB, lend you, the bank, X sum of money but you have to use that money to either loan it to start-ups or small companies with very low interest rates. that's an example.

    The reason this is being done is because the euro is so strong that the inflation rate is lower by a lot, by 1.5%, than it was expected. And that means you have to raise inflation to the standard that was estimated and indeed, the one that is desirable. The USA's inflation rate is 2% or higher and it is desirable for it to be at that level.

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