Negative interest rates continue: German bank first nonstate borrower <0% bond

[bitcoinmarkets]

See web version here: http://www.bitcoinfuturesguide.com/bitcoin-blog/negative-rates-continue-a-german-bank-has-become-the-first-non-state-borrower-to-issue-euro-denominated-debt-at-a-negative-yield




The Financial Times is reporting today that German bank Berlin Hyp is the first non-government entity to issue bonds at a NEGATIVE yield.

Ever since deflation has become a threat in a new trend of secular stagnation in Western economies, rates have been under enormous pressure in debt markets.

In fact, ONE THIRD of euro-area government bonds are at NEGATIVE yields. This is a tremendous and unprecedented occurance. As rates continue to go negative, depositors are paying banks to protect their money and asset-rich entities are able to get PAID for borrowing money!

Finally, over in Japan, last month it sold a 10-year bond at negative yield  That means that they are being paid to borrow money, even when their debt to GDP ratio is over 200%. Clearly the fiat system is upside down right now and they don't know how to even manage it properly.

In this environment where you are being taxed just for having a bank deposit in Europe, bitcoin will surely get more bullish. Bitcoin will never have negative interest rates, and in July we hill have a block reward halvening which will slow the increase in supply as we reach the 21 million cap.

Be prepared. If your country does not yet have negative rates it is coming. If the most advanced countries in the world like Japan and Switzerland are forced to set negative rates to survive, who knows what is next, nobody is safe.

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[knowhow]

Well it were expected to happen,financial problems are showing off and all countries are facing them some more others less.This will show and make the old investors how banks arent safe anymore they are controled by the governements and together they rule the country.

[avikz]

That's a really worrying news for the so-called developed countries. It's really sad that people is paying to the bank for protecting their own asset. It will lower the money circulation in the economy and purchasing power of general people will decrease. It will also lower the production rate of factories as demand will be lower. That will lead to job cuts and will further worsen the scenario.

Simple rule of economy.

[Kakmakr]

Extreme problems require extreme solutions, and the fiat system seems to think negative interest rates will be the answer to all their problems. They will do anything to stimulate a dying cow and milk it, until the last drop. <excuse the pun> They should rather address the real issue and that is the role banks are playing in the problem we have now. People are given loans and debt they cannot pay, and the central banks are printing fiat money like toilet paper.

 

[NorrisK]

Extreme problems require extreme solutions, and the fiat system seems to think negative interest rates will be the answer to all their problems. They will do anything to stimulate a dying cow and milk it, until the last drop. <excuse the pun> They should rather address the real issue and that is the role banks are playing in the problem we have now. People are given loans and debt they cannot pay, and the central banks are printing fiat money like toilet paper.

 

I agree that banks should take more care about how loans are given and I see that happening in The Netherlands. You cannot take a loan for a random reason here. You need a good one and even than the bank can say no to you easily. Usually it needs to be part of an investment in your own company or be part of your mortgage to buy a kitchen for example.

Buying a car or a tv is not a reason to get a loan here and is limited to your credit card (~2500 euro) or debt limit (usually ~1000 euro) on your checkings account. After that you are completely out of luck if you don't have your finances in order.

It is a shame that consumers will never get negative interest rates on their loans and that in the end they probably end up paying more tax over those 'profits' anyways.

[Jet Cash]

It is a shame that consumers will never get negative interest rates on their loans and that in the end they probably end up paying more tax over those 'profits' anyways.

I'm sure they will get negative rates on their savings though, and I bet the gov. won't give tax rebates on that.

[tobacco123]

Very soon bitcoin will be the only economy without negative interest rate.

[SFR10]

Unfortunately it seems that the likely outcome for every country, in the near future. All the country I'm in, still has positive interest ratings, this year alone it was reduce 2-3% alone and from the looks of it, their in the same path as few others that went with negative interest rates lately and this will leave us with BTCitcoin and as result, more demand will surely increase it's value so overall the situation )for us on board) is somehow still a win - win perhaps, as opposed to others that only have funds in fiat.

[Denker]

That's a really worrying news for the so-called developed countries. It's really sad that people is paying to the bank for protecting their own asset. It will lower the money circulation in the economy and purchasing power of general people will decrease. It will also lower the production rate of factories as demand will be lower. That will lead to job cuts and will further worsen the scenario.

Simple rule of economy.

Don't keep your money on those bank accounts.Simple is that.
As long as cash is not abolished this is the only option you have and therefore you should make use of it.

[unamis76]

Times like these just make me wish we just dumped fiat...

[Amph]

It might make a chaos if all users decided to withdraw their money from bank and that bank use fractional-banking system
There's no problem if they don't get interest, but to take their money is too much. It can be categorized as stealing.

i'm not even holding anything in the bank, all in bitcoin, minus some dumping here and there to buy stuff that you can not find with bitcoin yet

they can go bankrupt for all i care, more bank going down, more possibility for bitcoin to shine

[knowhow]

Well that can really happen but ,we dont know if more banks fail ,bitcoin will get a bigger interest or more investment.If another group of people loose their saving against the banks they need to find a way to protect their capital bitcoin can be the answer as they can invest all into gold and silver.

[mkc]

I think this is good for Bitcoin and gold. One of the argument fiat is better is that fiat carries interest. You make a little bit money when you put money in the bank.
Now with negative rate, you have to stall cash in home, like Bitcoin. However, it is  so much easier to spend Bitcoin than cash. Most today's bill are paid over Internet, or writing a check. If you not put cash in bank, you can not write a check, you can not online bill pay. If your credit card company, water, waste handles Bitcoin, you don't need fiat.

I think this is vastly bullish for Bitcoin, let us see how this play out.

[pitham1]

This hot money will just flow to countries where the risk adjusted returns are moderate.
For all you know, the negative interest rates are just increasing house prices in some developing country.

[countryfree]

Who will buy this bond?
It's the most stupid thing someone could do. You may as well flush your money in the toilet. Happily, there are other options. In Germany or Switzrland, it remains possible to have an account which generates positive interest.

[Meuh6879]

Only trader buy bonds ... to resell in the day at the closed hour.
Bonds is like food supply ... they are a bubble like others.

Stupid market that it can print money for his benefice AND NOT for people happyness.



But things change now ...

http://imagizer.imageshack.us/a/img905/5278/7O0UbU.gif

Banks are already dead ...

[KiwiParty]

The financial market does try to achieve something which should be the task of the politics.
Invest the money!
Don't stockpile it!
Look, we have ideal preconditions for making huge investments.
Medical sector, industrial, real estate.
We had never more knowledge in our civilization than today.
There is too much war, and endless waste. This era should pass.
Thats what the ECB tries to focus on, invest, create, work, do it!
There are many improvements to come, if we suceed in letting people work and achieve it.

This is rather a problem of the fiat, nor a pity for BTC, but for those who are blocking the path.

[Pab]

on the last EBC meeting Draghi lowered rates to 0 very symbolic and has increased QE to 80bln per month
But Switzerland bank is expected to rise rates above 0 negative rates has already created problems in financing business

[calkob]

I would never pay money to a bank in order for it to keep my money,  i would rather purchase a couple of big dogs and a good alarm system, then store it under my mattress. 

[Washika]

It might make a chaos if all users decided to withdraw their money from bank and that bank use fractional-banking system
There's no problem if they don't get interest, but to take their money is too much. It can be categorized as stealing.

i'm not even holding anything in the bank, all in bitcoin, minus some dumping here and there to buy stuff that you can not find with bitcoin yet

they can go bankrupt for all i care, more bank going down, more possibility for bitcoin to shine

It is good that you are almost all in bitcoin. I would like to, but I am not so brave. Only small proportion of my wealth is in bitcoin.