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Re: DOWn
This article is a good read and discusses some of the negative effects. I believe that any interest rates not set by a free market, are wrong no matter where they're set. In fact, (it's probably plain from my postings) I believe the whole economic system the world uses (fiat) is corrupt at it's foundation.
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More negative effects of zirp
Issachar
Originally posted by Wendy
The Diabolical Side of ZIRP
December 14, 2015•Mark Thornton
The pages of Mises.org have been filled with analysis on the impacts of ZIRP, or Zero Interest Rate Policy (of the Federal Reserve) for many years. Even though the recession officially ended 6 1/2 years ago, the policy has remain in place for the last 7 years. The main results of the policy has been to benefit the large banks and to generate bubble in asset markets. However, there is a much more diabolical side of ZIRP, its negative impacts on the productive and savings classes.
While banks have enjoyed low interest rates by the Fed, some have also been receiving risk free interest from the Fed on thir "excess reserves." [The excess reserves is money they received from the Fed in exchange for the banks' toxic assets, such as mortgage backed securities.] Savers have suffered mightily under the policy. For example, my savings account earns me .01 of 1% interest so that I receive 1 penny for every $100 saved for a year. I would have to have $1.2 million in savings just to reach the Federal poverty level income.
That is a problem that millions of Americans have been facing for the last 7 years.
December 14, 2015•Mark Thornton
The pages of Mises.org have been filled with analysis on the impacts of ZIRP, or Zero Interest Rate Policy (of the Federal Reserve) for many years. Even though the recession officially ended 6 1/2 years ago, the policy has remain in place for the last 7 years. The main results of the policy has been to benefit the large banks and to generate bubble in asset markets. However, there is a much more diabolical side of ZIRP, its negative impacts on the productive and savings classes.
While banks have enjoyed low interest rates by the Fed, some have also been receiving risk free interest from the Fed on thir "excess reserves." [The excess reserves is money they received from the Fed in exchange for the banks' toxic assets, such as mortgage backed securities.] Savers have suffered mightily under the policy. For example, my savings account earns me .01 of 1% interest so that I receive 1 penny for every $100 saved for a year. I would have to have $1.2 million in savings just to reach the Federal poverty level income.
That is a problem that millions of Americans have been facing for the last 7 years.
More negative effects of zirp
Issachar
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