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

nytimes.com

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

#241

Post by riskneural »

bachback wrote: post #96
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 bailou…

No need to read up on von Mises to read speculation on what happens to an economy without a fiat currency. Greece has no control over its currency, thus essentially may as well be on a gold standard. It's a hard road.

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

#242

Post by Pitarou »

6stringmerc wrote: post #102
spyspy wrote: post #80

Earlier quoted context omitted.

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.

As a general rule of financial planning, higher yield means higher risk, so being "much better off for it" is a highly subjective, if not naive statement with respect to saving. Sure, in the long term it is possible to gain more investment returns with certain securities, and in other instances, one can lose the entire principal and be completely worse off. Saving long-term is not a model that totally works during 'c…

That's why people keep droning on about balanced portfolios (with cash being a part of that balance).

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

#243

Post by refurb »

arthur_pryor wrote: post #238
tankenmate wrote: post #217

Earlier quoted context omitted.

An inheritance tax?

i can't quite tell if this comment is assuming that everyone would agree that inheritance taxes are bad. i certainly would disagree with that assumption. i think inheritance taxes, if implemented properly, could be a great thing, both in terms of providing government revenue and in terms of creating a level playing field for society. i don't think that a person should be able to give things, after their death, tax fr…

The interesting thing is that countries that lean more to the left/socialism, don't have inheritance taxes. Australia, Canada, Israel, Sweden, New Zealand, Norway all have no inheritance tax.[1]

[1] https://en.wikipedia.org/wiki/Inheritance_tax

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

#244

Post by redblacktree »

hackuser wrote: post #224
outside1234 wrote: post #203

Earlier quoted context omitted.

So, in essence, we punish responsible people who save for retirement. No thanks. Also, one unintended consequence of this policy would be that the MINIMUM interest rate you would have to pay would be 3.75% because below that it makes more sense to just buy a gold bar and bury it in the backyard vs. lend it out. Basically, the way you can imagine the impact of that is that your mortgage interest would (today) essentia…

> the MINIMUM interest rate you would have to pay would be 3.75% because below that it makes more sense to just buy a gold bar and bury it in the backyard vs. lend it out. I don't quite follow. I have to pay a tax of 3.75% of the gold bar's value whether I keep it or lend it. Even if I only can lend it at 2%, that's still better than nothing.

He's suggesting that you avoid taxes by hiding your assets.

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

#245

Post by adevine »

spyspy wrote: post #195
adevine wrote: post #100

Earlier quoted context omitted.

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.

The comment I was replying to only mentioned people saving for retirement, not people already retired.

Not really. "The irony of this approach is that the lower interest rates are, the more people need to save to reach their retirement goals."

That statement doesn't necessarily assume people are just socking their money away in a savings account while working. The goal of saving for retirement is that you need your money to outlast you. If your can expect much lower income during retirement, you'll need to have a bigger pot at the beginning of your retirement (i.e. you'll need to save more while working).

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

#246

Post by beachstartup »

dilemma wrote: post #232
beachstartup wrote: post #19

Earlier quoted context omitted.

yes, and cars and electronics and everything else china consumes. even 7-11. you ever been to china?

I live in China, and previously in Japan. My point is that the majority of the Japanese economy is not made up of exports to China, which in turn are not in majority made up of robots, as the parent believes.

ELI5: a reduction in demand from china will have a huge impact on japan. i don't know what other weird yarn about robots you're trying to spin with my words.

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

#247

Post by arthur_pryor »

refurb wrote: post #243
arthur_pryor wrote: post #238

Earlier quoted context omitted.

i can't quite tell if this comment is assuming that everyone would agree that inheritance taxes are bad. i certainly would disagree with that assumption. i think inheritance taxes, if implemented properly, could be a great thing, both in terms of providing government revenue and in terms of creating a level playing field for society. i don't think that a person should be able to give things, after their death, tax fr…

The interesting thing is that countries that lean more to the left/socialism, don't have inheritance taxes. Australia, Canada, Israel, Sweden, New Zealand, Norway all have no inheritance tax.[1] [1] https://en.wikipedia.org/wiki/Inheritance_tax

that is interesting. i'm not sure what to make of that. i have half-formed ideas about why that might be, or why that might be ok (or not ok), and whether that sort of solution is better in principle than an inheritance tax, if one had to choose. but none of those ideas are fully baked enough to mention.

do you happen to know why that's the case? for example, that wiki entry says sweden abolished the inheritance tax in 2005 (retroactive to 2004). was the motivation that it was unnecessary? did constituents complain about its existence?

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

#248

Post by dilemma »

beachstartup wrote: post #246
dilemma wrote: post #232

Earlier quoted context omitted.

I live in China, and previously in Japan. My point is that the majority of the Japanese economy is not made up of exports to China, which in turn are not in majority made up of robots, as the parent believes.

ELI5: a reduction in demand from china will have a huge impact on japan. i don't know what other weird yarn about robots you're trying to spin with my words.

You're not the parent; stop commenting.

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

#249

Post by laotzu »

ArkyBeagle wrote: post #223
laotzu wrote: post #97

Earlier quoted context omitted.

Growth for the sake of growth is cancer

A society without growth looks like Mandarin China. You want growth for the sake of people, to provide a rising standard of living.

It's really about being able to match growth with sustainability.

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

#250

Post by [deleted] »

clock_tower wrote: post #230
schoen wrote: post #227

Earlier quoted context omitted.

There's Keynes himself on generating employment by burying money in the ground. https://en.wikipedia.org/wiki/The_General_Theory_of_Employme... I'm not sure if that example is exactly equivalent to breaking windows and paying people to fix them (for example, maybe it matters a great deal for his view that it's the government which is paying for the demand stimulus).

Found it: it's Paul Krugman who advocates for this -- at least if this link (disclaimer: just skimmed the article, didn't check it or its context for their political views) is accurate: http://www.economicpolicyjournal.com/2013/12/lol-more-proble...

[deleted]
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