Negative Interest

>7-1

FUCK

Umm. I dont think you inderstand how negative interest rates worl Leaf. The SNB implemented this so people wouldnt put money in Swiss banks or buy anymore of an already very expensive currency. And everyone wants to buy CHF because everything else is fucked.

>1337

can someone TLDR me on this query: if the fed sets interest rates why are there a million different rates you can get on loans and credit cards?

>repetitive digits

The rate the fed sets is the interest rate on the loans they give out to other banks.

how does interest rate relate to currency value can you explain?

...

What happened to BRICS Brazil?????????

oh cool thanks. so the fed makes the money and loans it to the bank and tells them what the interest rate is? can the bank say fuck you i have enough reserve i don't accept that rate and or try to negotiate interest rates?

Fractional Reserve Banking.
The Fed loans money to other banks at the interest rate on that graph. The banks themselves will then determine their own rates based on how Jewish they are.

>tfw Brazilian and saving money

Enjoy Schlomo getting your hard-earned shekels, first-world cucks.

Buy Krugerrands

If a bank's reserves go down below the regulated amount then they will be legally required to take a loan from the Fed at the rate given, I believe.

There isn't much relation actually. Since 2007 and the Fed having low rates, we've seen 1-2% inflation.

no thats the rate banks have to pay for taking the money then they charge higher commercial rates to make profit

>based on how Jewish they are.
Based on how much risk they are taking.

Noone here even fell for that meme,we always knew we were shit

>can the bank say fuck you i have enough reserve i don't accept that rate and or try to negotiate interest rates?
No. But what banks do is that they loan their money to other banks, who then loan that same money to other banks.
So when the market crashes and everybody goes to the bank wanting their savings, the bank only has maybe 5% of the money it claims to have, the banking system collapses and everybody's money simply vanishes. The CEO of the bank then gets fired with a $100 million severance check.

The fed doesn't make money, it only supplies demand for bonds and t bills. Since they give guaranteed supply it raises the value of bonds/t bills but lowers the yield.

>Putin is praised by Cred Forums
>10%

They use it to stimulate the economy

t. I study economics

Forced meme

How is fractional reserve banking even legal? It is literally fraud, pretending to have money that doesn't exist.

If even 10% of the population withdrew all of their accounts at once, the whole thing would collapse spectacularly.

No he was correct.

Inflation is literally the increase of the suppl of money. And it has increased by 6 gorillonz shekels through quantitative easing and other shenanigans.

Perhaps you are referring to the consumer price index, which has risen by more than 2%, but mostly does not see the inflation much because it is mostly contained to stocks and financial derivatives that are not counted in its calculation. Prices of stocks have exploded in the last few years.

Someone is trying to destroy those countries' economies.

Low interest rates aren't always good.

Making them too low promotes too much spending on credit and increases the overall debt.

Well this gets into an argument about economics, but to save us both time, let's agree we're both correct.

>put money in bank
>withdraw less money than you started out with

If I were a nip I'd either kill myself or kill the CEO of Japan's largest bank.

>Meanwhile the Golden Dragon of the East continues to hoard gold
>Probably owns 75% of the world's gold supply at this point
>Will probably make a bid to Buy Earth in 2033

They're in a deflation trap, so even though the number of yen you own is decreasing, the value of each individual one is increasing.

Of course, but 10% is dangerously high.

just had a meeting, some "clean energy" bullshit

>take out huge loan
>wait a couple months for it to lose interest
>pay it back for less than you bought it for

negative interest rates are economic retardation but at least you can game it until it crashes

Checked and according to US Bureau of Labor Statistics, between 2007 and present we went from a CPI of 203 to 240, or an increase of 18%.
As I said it doesn't take into account financial services which attracted 90% of the recent money creation.

Inb4 people stuff cash under their mattresses.

Fed (((Economist))) detected

High interest = money is more valuable

Low interest = money less valuable

Okay write a script. Wolf of Jew St 2

Hey goys, we have to make a living somehow using other people's money that we pretend we have.

>Inflation is literally the increase of the suppl of money.

I'm not certain that's totally correct.

Please, by all means, enlighten me. Why is deflation good and where are the examples so I can learn from them?

deflation = lower cost of goods

>It's called penalizing people for saving money

It's called theft, you stupid cuck

Nigga I just put it in gold and silver.

Simple solution, safe and sound in a bigass safe.

My bullion goes where my "guns you can't have" go.

Why buy something today when it will be cheaper tomorrow?
Deflation slows the economy.

Underrated.

The government is deathly afraid of deflation because deflation means assets have more value and money has less. The tax money the government gets becomes less and less valuable and so the fuckhuge bureaucracy becomes impossible to sustain without cuts or so much debt that the whole thing crashes.

Correct! You're absolutely right!

But then, if money tomorrow will be worth more than money today, then why not wait, essentially, forever to invest your money?

Fractional banking was created by (((bankers))) at a time when laws about fungible or indistinguishable goods were lax or non existent.

It also makes monetary policy a hundred times more influential and allowed politicians to run on permanent deficit, so a government-bank alliance became obvious. Do you really think Obongo is going to sue Yelen and Bernanke?

because you need it today and not tomorrow?
Shlomo BTFO

Deflation nor inflation are bad things independently. You need both to have a balanced money supply.

When you say deflation is bad, you sound like a Keynesian faggot who just wants to throw money at a problem until it solves itself. The Banks loves this because they make huge profits from the debt. They make money in deflation too, especially after they induce it after crashing the economy with inflation, then they pick up properties for pennies on the dollar.

The problem isn't deflation nor inflation, it is that a private entity like the Fed control's the nation's money supply, and they have a conflict of interest to manipulate it to make profits for themselves, the shareholders.

The comments in this image are not accurate, I think. However, the Fed is not working in our best interests and has caused too much inflation.

who could be behind this post?

>theft

>Giving your money to someone else to protect.

Millenial mindset.

Buy a safe and shut the fuck up.

You think that is sad? Mexican peso has devaluated 7500% since independence

Fine, let me rephrase my original statement.

This is why deflation is MOSTLY a bad thing.

You aren't seriously arguing that negative interest rates are good? And before you talk about The Fed, read the OP.

Incorrect, if interest rates go lower, bond prices go up. Hence improved capital gains on bonds.

Corporate and government elite as well as (((bankers))) make the most money when the economy is inflationary, so they encourage it to be this way all the time, instead of letting it ebb and flow naturally.

The majority of people who know nothing about economics get swindled into supporting this because they think the economy growing steadily with inflation is good 100% of the time, when in reality a healthy economy moves in cycles.

The real question is how long this kikery can go on before the whole thing collapses. How much would it take to be too big to bail out? How much debt before faith in the dollar falls?

Sure for food and stuff, but what about a car, for example?

You overestimate the patience of the average person when it comes to instant gratification.

At some point the value of money will go down. If it doesn't, and you take as hypothesis permanent deflation, it literally means that for some reason or other productivity rises all the time so that the value of goods drops all the time. Of course you don't need it to be true for eternity. Any mark of non-monetary policy shenanigan deflation is a sign that goods are more available than previously.
If that is "slowing the economy", then slow me down.

If you want an example of mass deflation, look at consumer electronics in the last 30 years. Only a Keynesian could look at the constant and incredible fall in price of a unit of computation power (like terraflops) as a bad thing.

>Fractional banking

Let me ask all these smart people one thing:

If a bank cannot lend a fraction of the money in their safe, why would they ever start a bank?

You idiots would all have to carry your money in a belt and never be able to relax.

>If a bank cannot lend a fraction of the money in their safe, why would they ever start a bank?

Exactly. The entire practice of loan banking is predicated upon the idea of loaning money that doesn't exist.

You could open up a bank for the pure purpose of keeping people's money safe and allowing infrastructure ease like debit cards, but that wouldn't be as profitable, would it goy? Honest shekels aren't easy to come by.

It's called a bullion bank and it can be profitable. Usury is a cardinal sin.

>If a bank cannot lend a fraction of the money in their safe, why would they ever start a bank?
Using this line of argument, why would any warehouse ever exist? A bank is primarily a warehouse for money. The bank could enter a contract with the depositors to manage their clients investments by lending it.
But that's very different from fractional reserve banking, which consist in lending something that isn't there.

... and the other side is, /you pay them to hold your money/. Ie, if you put money in the bank, you lose money.

I agree. However, most people don't understand finance and will never wake up to the fractional reserve jew. It's a shame.

Silly leaf. That means people are PAYING money for the pleasure of the letting the bank hold their money.

user... Investing in bonds right now for cap gains is not a good idea

Yea. I just used the Fed as an example. All the central banks are owned by the same peeps.

>why would any warehouse ever exist?

Huh? Warehouses don't profit by lending items. They get paid to safely store goods.

Stupid goys saving money, live paycheck by paycheck

>The real question is how long this kikery can go on before the whole thing collapses.
This is already the optimistic scenario of an happening. People are truly cucked beyond belief in many parts of the world. They will let themselves became debt slaves without combat. Especially considering the process is slow, so normies don't even realize it. They sometimes see both themselves and the government being three times more indebted than in their childhood, stop for one second, utter "really makes you think" and go back to normie life.

And a bank would have fees of safekeeping, which are of a very different nature than fractional reserve banking.

>Usury is a cardinal sin.

You realize that the Jewish faith doesn't have such silly, arbitrary rules.
Christianity basically set itself up to be poor for eternity.

>~15% of all money is physical, the rest is digital
>if everyone wanted their money, they wouldn't be able to get it
>there is more debt in the world than money

These kikes have went too far in their trickery.

>a bank would have fees of safekeeping

Totally. Good luck getting people to do that. It's been free for decades.

Because none of you are smart enough to understand monetary operations.

Not cost, price. The goods still cost just as much wealth to create. Remember money is just a unit of measurement. Changing the units doesnt give you more wealth.

yup we learned this in the "running on the bank" unit in finance class

Of course the value of money will eventually go down. It could just be years before that happens, and that means years of economic stagnation.

The price of goods does not cause deflation (other way around). Just because a manufacture has lowered costs of production and passed some of the savings on to consumers does not mean that interest rates will be negative. that's a huge stretch.

>And before you talk about The Fed, read the OP.

oh god your kind are getting dumber

Needed to stimulate bank lending = more consumer spending in the form of cars/houses/business/investments

Banks stop lending and its game over

Money does exist. You can't loan out nothing. The creation of money out of thin air is only an accounting thing. If you went and withdrew, you get real cash.

But I'm a good goy.

>It could just be years before that happens, and that means years of economic stagnation.

but when we have years of economic stagnation DESPITE your "medicine"??????

Some money exists. The vast majority of it doesn't.

Artificially increasing the money supply devalues existing dollars. Of course it's pure (((coincidence))) that most of the new dollars go to bankers and other elites while our dollars become worth less and less.

>Artificially increasing the money supply devalues existing dollars

it doesn't

No, the FED does not lend money at that rates. That is how much a treasury bill (government debt) pays you when you buy it. Government debt is so high, there are so many T bills and they have such a low risk that all the other interest rates of the country are based on it.

It's free because you don't actually store anything. It's not free when you actually deposit your own metals in a vault. Even then, it's only free because banks gets their profits from lending.

A bank lending doesn't directly produce anything and isn't involved in industry. If the money supply was constant, the total of money owned by the banking system overall would not change and it would merely be a competition between bankers as to who is the best investor. The only reason we see all banks making profits almost all the time (minus a rare crisis) simultaneously is because they twist the game by lending money they don't actually have and constantly increase the money supply.

This is infinitely more profitable than running a warehouse-bank relying on safekeeping fees and so the bankers graciously stopped taking them from goyim. Besides the goyim don't hold gold or even copper anymore, so what would the bank even store? Its own notes?

Let's say there are 10 dollars and ten apples. Each apple is worth 1 dollar.

The banks create 90 more dollars. Now there are 100 dollars total. Noticing that there are more dollars, the apple vendor raises his price on apples to $10.

When I could previously afford 10 apples, I can now only afford 1 with the same money. My dollars have been devalued.

If I understand it correctly it depends on the product of the supply and the velocity of money. If the velocity is constant increasing the money supply does indeed devalue the money already in circulation. It's like the textbook definition of monetary inflation.

>increasing the supply of a good doesn't drop the value of the good unit
Yes, scarcity was a meme all along.

>The price of goods does not cause deflation
Misunderstanding due to korean user above using inflation/deflation fro the price of goods.

If you are talking of the supply of money, I don't know any economist that wants any significant deflation. And surely there is no country on Earth currently following a conscious deflationary policy of reducing the money supply.

best meme 2016

Inflation of the money supply.

Clue is in the name.

You may be confusing it with price inflation which usually occurs with money supply inflation but can also happen because of war/famine/drought etc.

Inflation is bad.

ALWAYS.

Japan is fucked because capital/savings is required to make break through innovations.

Japan stagflated for 20 years. What successful new companies has Japan produced since the 80s?

None. Because savings and the value of the currency is one half of every single trade that takes place and they've kneecapped capitalism by thinking $/£/Yen are just numbers.

They can lend some of the money in the safe if a customer wants to take that risk.

What they can't do is invent money based on how much money is in the safe.

htf does that even work? Why would anyone put their money in a bank in this case? May as well mattress it or buy gold.

>htf does that even work?
Good question.

Where is a good place to buy Krugerrands online?

Also, why are the prices on them varying slightly in spite of being the same weight?

Pls no bully.

> not buying tesouro SELIC

I wish I was doing that shit back when it was 25%.