Topic: Banks are offering Negative interest rates! will this help BTC - page 2. (Read 669 times)

I don't know if they are, but sounds like full reserve banks, where the entirety of your money is always there. Think bank vault instead. And this of course requires a fee for keeping that inside the vault without ever touching it until you want it back.

Most banks in the world do not do this, sadly they use fractional reserve, which is a form of legalized ponzi scheme, since they use your money for their interest, they pay you to give you an incentive to not withdraw your money...

Because if enough people withdraw their money, the bank has no way to respond, since the money isn't there anymore. At least not the whole of it, only a small "fraction". The only reason you don't see banks going bankrupt more often, is because they also came with the idea of a bank of banks that works with the same principle, called "The Central Bank". And to break that, a % of the population in that country would need to withdraw at the same time. But wait! they also made a World Bank just in case... which means... I hope you get it, if the world starts withdrawing, the bubble pops and everything collapses.

Which is why, it is wise for you to learn about the only school of economy that advocates the use of deflationary money, the Austrians: https://mises.org/books-library

Then you will understand where everything fits.

Should you get rid of your fiat for bitcoin or metals? Absolutely, leave in those Ponzi banks only the absolute minimum. It might not happen in your lifetime, but if it does, you will belong to the few that acted in advance and protected your funds by moving them away from fiat. You can also go with some more old fashioned assets like properties and such, but the main point remains: As little fiat as possible. Money in the bank is money at risk, think of a bank like an online wallet, very dangerous, could disappear tomorrow without warning (and yes, banks have gone before, leaving the people without their money).

But of course they want you to depend on them, their life depends on it...

Did you see Bitcoin's trend this year? It's still up like 130% after a 43% correction. If we go back in time exactly one year; Gold is up ~26%. Bitcoin is up ~22%.

What usually happens is that when investors think certain events may affect the price of Gold, or even Bitcoin, they'll buy into it hoping that those who seek a safe haven asset do so too and further inflate the price. In other words, investors are front running future demand. It happens in every market pretty much.

Looking at the Gold price right now, it seems that it has topped out for now and is consolidating sideways. I'm kinda leaning towards a retest of the lower $1400 area or even $1350, which would provide a nice entry point. Just like Bitcoin, Gold won't keep going up endlessly without a solid correction every now and then.

Parents do it all the time... "I'll 'lend' my son Jimmy the money to help him out." Of course many times, that is a 100% negative interest rate ;-)

Paying for the bank to hold your savings is known for a really long time in Switzerland. They have an independent banking industry and they're (the Swiss banks) nearly the only trusted banks by the richest people. If all the economies collapse, the Swiss banks will remain and will hold the savings in their national currency (Swiss Frank, CHF) and it will preserve the value.
Those people only trust these banks to hold their money, because they don't want to lose any of the value of their saving over the time. This is why Swiss banks could offer negative interest rate, because they're so trusted, and the demand is very high for their services, so they can just directly charge their cost with negative interest rate.
German bonds are pretty similar, Germany has a really good economy (on the long run), so people trust them enough to buy bond with negative interest rate because people speculate like the normal economies will fail, currencies (not EUR but the others) will lose a part of their value in a recession, so if you buy German bond even with negative interest rate will help them to preserve the value of their savings...
This is a signal for a coming recession or for a coming financial crisis... no one knows this for sure, but this is a signal...

Interesting of course is the comparison of traditional deposits with bitcoin.There are many contradictions in these conditions.I am surprised of course such an absurd situation.In this case, it makes no sense to invest in a Deposit.But whether there is a better choice as an alternative to choosing bitcoin, I don't know.Although if we consider bitcoin as a long-term investment (30 years) then I think it makes sense.By and large, those countries that treat their Klients this way, paying them even less than the amount that they invested, create pre-links so that people themselves look for an alternative. And as you know, an alternative more than promising is Bitcoin.Slowly many are beginning to realize this.

Well, Japan is a special case, because they have deflation. Their fiat becomes more and more valuable with time (I think it was not done on purpose, and people mostly think it's a problem but that's how it works there), so it makes sense that one should pay back less that one borrowed. As for countries with a stable inflation rate, it seems that the lender loses significantly in this case, but I can see how people might be interested in that. It's just like discounts and promotions. If nobody wants to buy your product for a certain price, you make it lower, and then people buy it and probably even more stuff they never intended to buy. Likewise, if nobody wants to loan from you, and you really need an active flow to get going, you make a negative interest rate.

I can't say directly if this will favor the Bitcoin but i could say that this is bad for the banking industry as the banks are alive because of the loans with interest. Except if these countries are just helping their people in talking of entrepreneurship thru bank financing with negative interest then it will probably help Bitcoin as people could buy more Bitcoin and used it to build businesses with the support of the banks.

Wow!
These countries have a surplus amount of reserve cash and that might be one of the reasons they are giving a negative interest rate. Good opportunity for anyone to invest in Bitcoin or the local stock market. I say, its a great opportunity for a fund manager to create funds that are investing in the third world country.

That is why there are lots of Bitcoin Investors based in these countries. Any country that has got an economy issue, a citizen from those countries will invest in Bitcoin.

It's not actually awesome in a way that you think! It has severe impact on the economy. Banks are the still the main pillars of the economy as it controls the public money and majority of the common people still use banks for depositing their money, thinking it is a secure way to do it. Now think this similar situation from the perspective of a common man who deposits more money in order to get less amount at a later date. Banks are going to earn from the difference in interest rate anyways, their strategy is not going to change. They will probably offer -5% interest rate for checking accounts and -3% for borrowers. Their income is a straight forward 2% no matter whatever the market prevailing interest rate is!

Bitcoin is supposed to be benefited from the negative interest rate regime. But the main beneficiaries are precious metals like Gold, Silver or Platinum. If you look at the price chart of Gold from last one year, the trend will be clear to you! Check the below link,

https://goldprice.org/gold-price-chart.html   

I have to agree with you on this. As of now, we are stuck with using the banks and there is no other safe option. I thought about a few other options, such as converting some of the cash to gold ETF. But the liquidity will be lost and in case we are faced with some emergency expenses then we'll incur even more losses when we convert the ETF back to fiat cash. So I agree, we have no other option.

But one question. A negative interest rate of -0.25% or even -0.5% may be OK for now. But what you'll do in case they further decrease the rates. Will you be OK with -2% or -3% per year? There is no guarantee that they'll not do that.

Negative interest rates+inflation are awesome for the people and companies with big amounts of debt.
The problem is that the economy is addicted to debt and negative interest rates make it even more addicted.
I think that keeping negative interest rates is good news for bitcoin,but sooner or later,the bankers are going to go something in order to destroy the crypto competition.

because they usually have no other option. they aren't just going to pull their money out of the banks and put it in their mattresses! that wouldn't be safe nor convenient. we have to use banks since we are stuck using fiat and knowing that we need them they can do anything they want.
that is why they are scared of bitcoin, because they know bitcoin showed people that they can not-need banks!

See.. the bankers are really intelligent. Fist they are taking steps against physical cash by cancelling the high denomination notes. Then they are forcing you to store your money in the banks, and here they are robbing the account holders by implementing a negative interest rate. I don't know why anyone would agree to a negative interest rate, when the retail inflation remains in positive.

I've reread the article and seems like you're right - it's more like a tax on a bank account, and it's for average joes instead of the corporations and ultra wealthy. Wtf are central banks smoking, do they want to get a bank run or what. This might be good for Bitcoin, but I don't expect a huge number of people to jump the Bitcoin train, most of them will stick to cash. If people are scared to lose 1% of their savings, why would they put all their savings in Bitcoin, when they will be losing/gaining a few percents of their savings multiple times per day. Besides, people don't hold money in banks because they want to invest, they do it because it's convenient and in many cases they are forced to.

i think mention of "loans" in that article was misleading because the negative rates has nothing to do with the loans you take from the banks, the way i understand it. these rates are the rates that banks pay as "profit" or interest on the money people keep with them and negative that means your balance shrinks over time.
so the effects of this on bitcoin is what @Kakmakr said above, people would start pulling out their balance from banks and look for investments. one of these investment options among many is going to be bitcoin.

Bank of England outgoing Governor just gave a speech telling central bankers the US dollar wont continue to be the reserve currency

 cnbc.  com/2019/08/23/bank-of-england-governor-mark-carney-says-trade-war-is-having-a-confidence-effect-on-business-around-the-world.html   (forum says suspicious link for some reason)


There is too much debt in the Fiat system. We are in uncharted waters after the Quantitative Easing we saw in 2009 just left a larger hole than people could ever repay.

It isn't bad for bitcoin but to say this is good, we really can't be certain how the central bankers are going to try and change the national currencies.

It is obvious they are all planning how a digital currency solution would work for THEM (probably not US)

I think Bitcoin is somewhere very deep on the list of potential investments for people who are considering new investments because of negative interest rates. The affected people probably hold bonds or some other low-yield high-security investments, and Bitcoin with its volatility is completely different from them. I think a lot of current Bitcoin traders come from penny stocks and startups, they were already used to high risks and knew how to trade in such environment.

A negative interest rate means that the central bank (and perhaps private banks) will charge negative interest. Instead of receiving money on deposits, depositors must pay regularly to keep their money with the bank.  - Source : https://www.investopedia.com/terms/n/negative-interest-rate-policy-nirp.asp

So, the direct result of this is depositors would rather look for a alternative investment option like Bitcoin, where they might see a potential profit, than having to receive no interest or profit on their investment.  

I hope more people will wake up and see that whole world is one big Financial Titanic that is going down.
We can be sure that 'big restart' will happen sooner or later, and after that crypto can be safe harbor for people.

Otherwise we can see nightmare with centralized digital state coins like China and FED are making now.

philipma, here in Brazil we have a great economist who are passionate about BTC, and they have a huge knowledge about market (he worked in a lot of countries), and I'm hearing about this some time ago

This is not going to end well, we are in a time where money is abundant, easy loans, companies that not have profits are worthing billions, and this is very bad, this is not a healthy market
We should be prepared for a crisis, and this is not conspiration, we can see in the news about US vs China, petroleum, Brexit and etc

Let's see how BTC will react to this, if people will trust in cryptos and the whole idea of decentralization instead of governments and banks