Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bank of Japan, in a Surprise, Adopts Negative Interest Rate

nytimes.com

Post reply on HN
Print view View original

91–100 of 250 posts

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#91

Post by jessaustin »

stephenboyd wrote: post #52
derefr wrote: post #47

Earlier quoted context omitted.

Question: if the government doesn't want people "parking their money" in government bonds at all ... then why not just stop issuing government bonds altogether, thus giving banks no choice but to invest in the market instead? Is that somehow impossible? Would it make the market illiquid? Are there laws concerning the required volatility caps for the securities backing savings accounts that would have to be relaxed?

Like most countries, Japan's government runs a deficit and depends on selling bonds for funding.

How does that work with a negative rate? Somewhat equivalently, how does that work with any rate whatsoever?

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#93

Post by eli_gottlieb »

dzdt wrote: post #44

The backstory here is demographics. Japan has a shrinking, aging population and almost no immigration. With fewer people there are naturally less things bought, sold, and produced. Japanese authorities have been trying to pump the economy by deficit spending (central government borrows money and spends it), quantitative easing (central bank buys long term private debt, increasing the money supply for short term spend…

Have they tried changing their disastrous work culture so that Japanese citizens of childbearing age feel more free and energetic to form relationships?

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#94

Post by pythia__ »

hackerboos wrote: post #63
Cthulhu_ wrote: post #56

Earlier quoted context omitted.

Wouldn't it be acceptable to just accept a shrinking economy and change policies in such a way to deal with it? i.e. shrink the police and armed forces, public services, cut needless spending, etc. Become more frugal as economy allows.

The key phrase here was 'aging population'. If the majority of Japan's population are retired then there will still be a huge deficit. Japan needs to bite the bullet and accept immigration as part of its economic strategy.

They recently tried to bring over Brazilian Japanese immigrants but were sufficiently dissatisfied with the results to pay them to leave.

http://www.nytimes.com/2009/04/23/business/global/23immigran...

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#95

Post by s986s »

woodpanel wrote: post #67

Maybe OT: Isn't this just proof that Japan needs to let go of it's biggest barrier to growth? By which I mean it's non-existing immigration? I've been recently to Japan and despite my fears Tokio was a really affordable place (leaving out the hotel prices of course). I thought this was due to the lack of growth and the recent quantitative easing and other government measures. Measurements that seem to be failing at t…

Honestly, nationalism is a bit refreshing. By immigration what you then are implying white business individuals and/or non-japanese otaku would only be able to afford or figure out a way.

If you are thinking of poorer individuals. Why? Their business is doing well and what exports are not are likeky not solvable through a domestic workforce outside of marketing and/or tech.

If you want more babies in a country, I believe denmark had a much better idea than to enable immigration, do it for mom. The pioneers the country seem to already there. http://www.theguardian.com/environment/2016/feb/01/japanese-...

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#96

Post by bachback »

riskneural wrote: post #32

I remember, in 2009, spending the effort to go through the code to make sure we had a check to set the interest rate to zero if it went negative in the simulation. Because negative interest rates make no sense, right?

Look at the balance sheets of all central-banks: they show hockey-stick growth and correlate with government debt. We're in the last stages of the self-destruction of a fiat money regime. Rates themselves don't reflect anything about the time-value of money, but much more about the banking system. Anyone who doubt this can ask himself what is going to happen when banks and governments need more trillion dollar bailouts.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#97

Post by laotzu »

HSO wrote: post #86

Those who think Japan is unique in its condition and/or that the answer to its problems is more of the same old "advice" as proffered by standard issue economists and business types might profit from Robert Gordon's recently published "American Growth". (paper version: http://www.nber.org/papers/w18315.pdf ) At least, it can offer a different, longer-term perspective on the issues. It's not impossible that we will lo…

Growth for the sake of growth is cancer

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#98

Post by mistermann »

aikah wrote: post #72
hackerboos wrote: post #63

Earlier quoted context omitted.

The key phrase here was 'aging population'. If the majority of Japan's population are retired then there will still be a huge deficit. Japan needs to bite the bullet and accept immigration as part of its economic strategy.

> Japan needs to bite the bullet and accept immigration. Immigration isn't going to solve anything, immigration from where ? Japan isn't the US, they aren't talking English nor their society is build in a way it can accept huge immigration waves. Japan needs to work on techs that will solve its problems, not resort to a massive immigration wave that will only kick the can down the road.

Not to mention the change immigration could potentially cause in day to day life. In my opinion one of the best things about Japan is the homogeneous and pleasant (in most but not all ways) culture - if I lived there voting for increased immigration would be one of the absolute last resort measures I would vote for.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#99

Post by [deleted] »

aikah wrote: post #72
hackerboos wrote: post #63

Earlier quoted context omitted.

The key phrase here was 'aging population'. If the majority of Japan's population are retired then there will still be a huge deficit. Japan needs to bite the bullet and accept immigration as part of its economic strategy.

> Japan needs to bite the bullet and accept immigration. Immigration isn't going to solve anything, immigration from where ? Japan isn't the US, they aren't talking English nor their society is build in a way it can accept huge immigration waves. Japan needs to work on techs that will solve its problems, not resort to a massive immigration wave that will only kick the can down the road.

[deleted]

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#100

Post by adevine »

spyspy wrote: post #80
Hermel wrote: post #57

Earlier quoted context omitted.

The irony of this approach is that the lower interest rates are, the more people need to save to reach their retirement goals. If this effect is stronger than the incentive to borrow and invest, low interest rates might actually curb consumption.

Saving for retirement using a savings account hasn't been a viable strategy in decades (at least in the US). People need to be encouraged to invest a significant portion of their money in other securities, and know that in the long term, they'll be much better off for it.

But that's only for the long term. If you are in retirement, where you need to spend your savings, you want to keep your money in low risk assets. Central banks are trying their hardest to minimize your spending income by giving you no return on these less risky assets.
Post reply on HN