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Author Topic: Could negative interest rates in the US boost Bitcoin?  (Read 2453 times)
hazenyc
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February 17, 2015, 04:11:27 PM
 #21

http://finance.yahoo.com/news/banks-in-europe-are-charging-to-hold-deposits--could-it-happen-here-195532627.html

YES!

The linked article talks about how a bank in Denmark is charging its customers for the privilege of holding their savings, negative interest rates. The bank doesn't pay you for your savings on deposit but you pay the bank to hold your savings secure because the market alternatives are so risky. The article speculates (very broadly) that it could happen in the US...it likely won't, but if it did guess what would provide a good alternative to traditional savings?

You guessed it...the almighty B-T-C...what an interesting turn for bitcoin that would be.

Can't this trigger a run on the banks?  Why pay them to store my money when I can just hide it under my mattress?  

That is the beginning of a deflationary spiral -- why spend today when your money can buy more tomorrow?
This might sound great for savers but in reality it wrecks economies. Because spending is the origin of wages, nobody gets paid if nobody spends and ultimately unemployment increases, and well it is a spiral so the negative effects are self-reinforcing.

A zero- or negative- interest rate policy is meant to encourage spending. Why save your money if it will buy less tomorrow? However, this can have unintended consequences, not least of which is a large amount of inflation-- why sell your stuff for a low price when people want to get rid of their money at any price?



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countryfree
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February 17, 2015, 11:39:31 PM
 #22


why sell your stuff for a low price when people want to get rid of their money at any price?

Come on, we're still far from that! I still have a savings account which brings me some interest.

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February 18, 2015, 01:03:08 PM
 #23

http://finance.yahoo.com/news/banks-in-europe-are-charging-to-hold-deposits--could-it-happen-here-195532627.html

YES!

The linked article talks about how a bank in Denmark is charging its customers for the privilege of holding their savings, negative interest rates. The bank doesn't pay you for your savings on deposit but you pay the bank to hold your savings secure because the market alternatives are so risky. The article speculates (very broadly) that it could happen in the US...it likely won't, but if it did guess what would provide a good alternative to traditional savings?

You guessed it...the almighty B-T-C...what an interesting turn for bitcoin that would be.

Can't this trigger a run on the banks?  Why pay them to store my money when I can just hide it under my mattress? 

 in this scenario your money just sits there. no way of using that money to earn.
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February 18, 2015, 01:12:21 PM
 #24

http://finance.yahoo.com/news/banks-in-europe-are-charging-to-hold-deposits--could-it-happen-here-195532627.html

YES!

The linked article talks about how a bank in Denmark is charging its customers for the privilege of holding their savings, negative interest rates. The bank doesn't pay you for your savings on deposit but you pay the bank to hold your savings secure because the market alternatives are so risky. The article speculates (very broadly) that it could happen in the US...it likely won't, but if it did guess what would provide a good alternative to traditional savings?

You guessed it...the almighty B-T-C...what an interesting turn for bitcoin that would be.

It is the case in some german banks as well. Maybe in Switzerland too.


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Fabrizio89
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February 18, 2015, 09:03:33 PM
 #25

It could, yes, but it depends on the global market situation. We already saw how a strong dollar affected all commodities and currencies and Bitcoin was not left out of these shenanigans.
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