Japan – Why Negative Interest Rates?

A number of countries have implemented a negative interest rate policy (NIRP).  Why?

neg_int_rates

Generally Central Banks try to stimulate their country’s economy by lowering interest rates.  This encourages banks and businesses to issue loans or take out loans.

Japan had a +0.1 interest rate and had nowhere to go but negative to lower interest rates in order to stimulate their economy.

Here is how it works.  Banks usually pay interest to use your money.  Instead a negative interest rate works like a safe deposit box. You pay to have the bank hold your money.

Unfortunately, people would rather have cash which results in hoarding and does the opposite of stimulating the economy.

For more information, see this website:

http://www.bloombergview.com/quicktake/negative-interest-rates

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What Is The Really Big Problem Facing The US?

Is it Big Banks or Big Government?

the_biggest_problem

Can you decide?

Can you do anything about either?

Yes you can.

You can vote for a constitutional amendment to reestablish campaign financing limits.  No one should be able to buy Congressional votes.  Then we will have our democracy back.

Then we the People, not the Rich, can control the size of Government and the size of Banks.

Don’t you want control?  Sure you do.

PS  Citigroup just moved its headquarters into the Capitol building with offices next to Congress.  Thus the drawing above is more accurate than we thought.  Oops.

Federal Reserve Can Create Jobs

THE FED has increasing employment as part of its charter. Yes, inflation is not the only goal in the charter.

underinvestment As this chart shows,US businesses are NOT INVESTING in capital for the future and consequently few new jobs are being created.

The Center for American Progress (americanprogress.org) has recommended creating a NATIONAL INFRASTRUCTURE BANK to fix our crumbling national infrastructure.

THE FED can use the LENDER OF LAST RESORT powers which allow lending to any institution including states and cities not just the financial institutions which are only using the loans to pump up the stock market.  THE FED could loan to the NATIONAL INFRASTRUCTURE BANK.

States and cities could use the loans for infrastructure which would CREATE JOBS similar to the Civilian Conservation Corps.  For example the Fed could have used these powers to bail out Detroit.

Read about it on wikipedia:

http://en.wikipedia.org/wiki/Federal_Reserve_System#Lender_of_last_resort

Thanks

NOTE TO BANKS – A Prepaid Gift Card is NOT A Debit Card

Several times I have received a gift card or a prepaid card that clearly says “DEBIT CARD” on the card above the VISA or MasterCard logo.  But NOOOO…..

giftcard

When I go to use it I have to say it is a Credit Card because it does not have a pin number.

Why don’t the banks put the following on the card?

PREPAID CARD (use like Credit Card)

You would think the banks making billions of dollars a year could figure this out.