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ShortyRob
LSU Fan
Member since Oct 2008
70773 posts

re: Our president supports negative interest rates
I find the negative interest rates discussions very odd.

Functionally speaking, there is no actual difference between if the rate is negative or slightly positive.

The reasons one might accept either rate are based on the same factors.


187undercover
Member since May 2019
983 posts

re: Our president supports negative interest rates
Just to be sure I understand you correctly here, if my savings rate is -1% and I go place $100 dollars in the bank, I still have access to that $100 at the end of the year instead if $99?

And why can't they loan out my savings for a greater return in a low interest rate environment? If a bank chooses to make a loan to so and so Joe to open a crabbie paddie how is not paying interest brother on that money?

It is either negative or it isnt. I'm not getting $101 or even $100 at the end if the year in my account. It will show $99. And it is a way to keep banks afloat and get the economy moving as banks have more dollars to loan out.

Make a ZERO SENSE in a supposed booming economy. None.

But, i am also one of the few who doesn't believe the government and when it comes to the economy I always do not believe the government.

Negative interest is polar to booming economies.

But, if it is a way to crush China exports and their currency it isba dangerous game to play. One we do not know how it will end or who wins regardless. And we do know many American savers will suffer horribly.


ShortyRob
LSU Fan
Member since Oct 2008
70773 posts

re: Our president supports negative interest rates
quote:

Just to be sure I understand you correctly here, if my savings rate is -1% and I go place $100 dollars in the bank, I still have access to that $100 at the end of the year instead if $99?

No

You have access to $99


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yatesdog38
Mississippi St. Fan
in your head rent free
Member since Sep 2013
7689 posts

re: Our president supports negative interest rates
The negative rates are typically going to be the overnight rate. Banks lending to each other. Your savings account will likely be earning zero percent still if it goes negative that reduces their capital

What happens is people start withdrawing their money out of banks. This reduces the amount of their overall deposits which what is what banks lend against. It will reduce their overall capital. Banks are required to keep a have a certain amount of capital to match the loans on their balance sheet.

When rates are really low the margins shrink on lending. It becomes less profitable if at all. accounting and management for banks is a different beast than your typical corporate accounting/management.

This is why banks buy more loans and bonds during a tightening interest rate environment. They layoff hundreds of people that process loans, underwrite them, the sales people, marketing for lending etc... it costs lots of money to staff them versus a handful of guys that can go buy loans and bonds on behalf of the corporation to manage their balance sheet
This post was edited on 9/11 at 12:34 pm


Janky
LSU Fan
Team Primo
Member since Jun 2011
27108 posts

re: Our president supports negative interest rates
quote:

It becomes less profitable if at all


Which means they then start charging fees on everything to make up lost revenue. Good bye free checking account.


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Zach
LSU Fan
Member since May 2005
95323 posts

re: Our president supports negative interest rates
1. He didn't mention Europe. You and Reuters just made it up.

2. You and Reuters don't speak Trump. His tweet does not mean he wants negative interest rates. It means:
a. Lower rates.
or at least
b. Don't you dare increase rates.

It's been over 2 years now. You should have some clue on how he operates. But if you don't learn then never fear, we're here to translate. No charge.


Janky
LSU Fan
Team Primo
Member since Jun 2011
27108 posts

re: Our president supports negative interest rates
He also said the US should refinance their debt. Pretty sure T-notes and T-bonds are non-callable. Therefore, I think this whole subject was either a troll or hyperbole.
This post was edited on 9/11 at 12:45 pm


Big Scrub TX
LSU Fan
Austin
Member since Dec 2013
19332 posts

re: Our president supports negative interest rates
'Member when the stock market was up when Obama was president only because of "money printing" which was going to lead to hyper-inflation like Zimbabwe? I 'member.


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81
yatesdog38
Mississippi St. Fan
in your head rent free
Member since Sep 2013
7689 posts

re: Our president supports negative interest rates
and trump shouldn't be speaking for the Federal Reserve.

It's piss poor leadership. Do you work for a large corporation? Does your CEO send out troll emails?


TigerSprings
LSU Fan
Southeast LA
Member since Jan 2019
542 posts

re: Our president supports negative interest rates
END the FED


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Nawlens Gator
Florida Fan
louisiana
Member since Sep 2005
4055 posts

re: Our president supports negative interest rates

Trump needs to stay out of the Fed Reserves business. The Fed needs to stay independent of politics.



Quidam65
Q Continuum
Member since Jun 2010
14441 posts

re: Our president supports negative interest rates
quote:

if my savings rate is -1% and I go place $100 dollars in the bank


Then you are the biggest fool in town unless you need to have $100 in there to keep the account open for the sole purpose of paying your bills.

And in that case, as soon as I get my paycheck, all of it comes out less what I need to pay bills the next two weeks.


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The Boat
Duke Fan
Monroe, Louisiana
Member since Oct 2008
104616 posts
 Online 

re: Our president supports negative interest rates
This is how Trump operates you nitwits. Trump doesn’t want negative interest rates but he does want them lower. He comes out and talks about negative rates and the fed will meet him in the middle and lower them.
This post was edited on 9/11 at 1:09 pm


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27
Zach
LSU Fan
Member since May 2005
95323 posts

re: Our president supports negative interest rates
quote:

It's piss poor leadership. Do you work for a large corporation? Does your CEO send out troll emails?


Trump does not lead the fed. He is not the CEO of the fed.


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12
boogiewoogie1978
Arkansas Fan
Little Rock
Member since Aug 2012
9063 posts
 Online 

re: Our president supports negative interest rates
quote:

He also said the US should refinance their debt.

Why? Based on government policies we have no intention to ever pay it back.


TigerSprings
LSU Fan
Southeast LA
Member since Jan 2019
542 posts

re: Our president supports negative interest rates
The Fed needs to stay independent of the USA.


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boogiewoogie1978
Arkansas Fan
Little Rock
Member since Aug 2012
9063 posts
 Online 

re: Our president supports negative interest rates
quote:

Our president supports negative interest rates

Political stunt to get re-elected.


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Big Scrub TX
LSU Fan
Austin
Member since Dec 2013
19332 posts

re: Our president supports negative interest rates
quote:

Why?
Because it's smart.


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02
ShortyRob
LSU Fan
Member since Oct 2008
70773 posts

re: Our president supports negative interest rates
This thread, like the last one on negative rates saddens me.

How is it possible that so few people comprehend that there's NOTHING different about the reasons for investing in a negative yield instrument vs the reasons for investing in a positive yield one?

Seriously. This is just bad


slackster
Stanford Fan
Houston
Member since Mar 2009
59410 posts
 Online 

re: Our president supports negative interest rates
quote:

He also said the US should refinance their debt. Pretty sure T-notes and T-bonds are non-callable. Therefore, I think this whole subject was either a troll or hyperbole.


The far more likely scenario is that he doesn't truly understand what the Federal Reserve can/should do.


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