What do we have after "637 interest rate cuts and $12.7 trillion in Quantitative Easing by Central Bankers of the world for the past eight years?" Weak economic growth and investors starting to rebel against all this quantitative easing. In other words, absolutely nothing! Now, these same Central Bankers want to institute a world-wide monetary policy of "negative interest rates." That is, you deposit $100 in your bank account and after one year, your bank gives you back $98. What? Yes, you read that correctly. See, all those QEs have not stipulated consumption spending or business investment. So, these Central Bankers want to try the next great monetary experiment with "negative interest rates." What is their rationale? Well, if you are not earning any interest on those deposits, you will spend those deposits, which will stimulate the economy through personal consumption expenditures. No, it will not stimulate the world economies, because individuals and firms will perceive a "NIRP" as another round of abject monetary failure by Central Bankers.
According to Bank of America, this has been the results of all this Central Bank quantitative easing:
- 637 interest rate cuts over the past eight years
- $12.3 trillion of asset purchases by global central banks in the past 8
years
- $8.3 trillon of global government debt currently yielding 0%
or less
- 489 million people currently living in countries with
official negative rates policies (i.e. Japan, Eurozone, Switzerland, Sweden,
Denmark)-0.92%, the most negative yield in the world (2-year Swiss government
bond).
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