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Old 09-09-2019, 11:23 AM
Mule Skinner Mule Skinner is offline
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Default Negative interest in Denmark



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https://finance.yahoo.com/news/ameri...143832101.html
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Old 09-09-2019, 04:06 PM
OldDesertrat OldDesertrat is offline
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Gotta read the article to realize that the banks aren't losing money. First off are the extra fees. The other factor is that the lender's negative rate is higher than what is paid for the money the bank borrows for the customer's loan.

Borrow at minus-one percent and loan that at minus one-half percent. A half-percent profit on a gazillion bucks ain't chump change.
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Old 09-09-2019, 04:21 PM
Mule Skinner Mule Skinner is offline
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My, ah, interest in this
would be ways to make money on it.

For example, one might buy a house to rent out.
Presumably this would produce a positive return...
on money where you're paying negative interest.

The question, then, is how to reach into Denmark
and score one of those loans...

Last edited by Mule Skinner; 09-09-2019 at 04:22 PM.. Reason: question
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Old 09-09-2019, 09:47 PM
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Quote:
Originally Posted by Mule Skinner View Post
My, ah, interest in this
would be ways to make money on it.

For example, one might buy a house to rent out.
Presumably this would produce a positive return...
on money where you're paying negative interest.

The question, then, is how to reach into Denmark
and score one of those loans...
Somebody has to have clamed credit for this, but the negative interest rate has to be equal to or greater than the interest on us treasuries minus the cost to secure the exchange rate via options, and the round trip exchange cost. Well call this CBs law.

Otherwise some other bank borrows a billion dollars in euros, converts to dollars and buys Tbills/bonds which are offered as collateral. One basis point above CBs law still gives a $100k/yr return.

This same logic keeps all kinds of markets in sync.
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Old 09-10-2019, 05:01 AM
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this is really a crappy new world
how did we get here with negative interest?

so i have to pay the banks to save my money
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Old 09-10-2019, 05:57 AM
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I think we will see an uptick in gun safe sales if negative interest rates make it to the USA. This is why they want to ban cash, so we have no choice but to pay the banks to hold on to our money,
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Old 09-10-2019, 10:29 AM
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So I guess cash truly is king again.
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Old 09-11-2019, 10:13 AM
Mule Skinner Mule Skinner is offline
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Trump seeks negative interest rates:

https://www.reuters.com/article/us-u...-idUSKCN1VW1CW
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Old 09-11-2019, 11:32 AM
OldDesertrat OldDesertrat is offline
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Trump wants a weak dollar in order to maintain or improve exports. Right now, the Fed rate is higher than most other central banks' rates, so the dollar is strong. In Trump's view, "too strong".
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Old 09-11-2019, 08:06 PM
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So I guess cash truly is king again.
They'll be pushing for cash, PM and barter to be banned to prop up negative interest rates. Of course there will always be black markets, but they already have a detailed road map of what needs to occur for negative interest rates to be enforced.
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Old 09-11-2019, 08:21 PM
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Negative rates have been a reality in Europe for some time. First there was shock, then resistance, now acceptance. Do the math, the same conversation just started here. There will be few places to hide with capital controls.
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Old 09-12-2019, 09:17 AM
OldDesertrat OldDesertrat is offline
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I'm reminded of the cartoon of the guy sitting in the corner of a room farthest from the door--and the floor is wet with paint as he's painted his way from the door to the corner.

Same thing these central banks have been doing for these last ten years. We've been in this currency war since 2009. Now, a trade war. The rational fear is of a shooting war.

"Kick the can down the road" has avoided a collapse--so far. How much longer? I don't know.
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Old 09-12-2019, 04:06 PM
Mule Skinner Mule Skinner is offline
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Can negative and positive interest rates coexist?
A credit card charge not paid will incur an interest charge.
Will Visa LIKE not getting paid on time?
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Old 09-12-2019, 05:02 PM
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Trump is a financial genius when it comes to his personal interests. When it comes to long term financial security for the country, he is a complete idiot.
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Old 09-13-2019, 09:51 AM
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Originally Posted by NCalHippie View Post
Trump is a financial genius when it comes to his personal interests. When it comes to long term financial security for the country, he is a complete idiot.
Not debating the financial acumen of Trump, but you are saying he's responsible for negative interest rates becoming reality in Europe?
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