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Comments on: From a negative OCR to negative interest rates … http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/ The Visible Hand in Economics Mon, 04 May 2009 20:11:21 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: thai bar http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/#comment-19460 Mon, 04 May 2009 20:11:21 +0000 http://www.tvhe.co.nz/?p=3667#comment-19460 Interesting information, im new to forex trading but im trying to improve my trading skills.

]]> By: Forex Trading http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/#comment-19457 Mon, 04 May 2009 07:34:21 +0000 http://www.tvhe.co.nz/?p=3667#comment-19457 I will be linking to your site great article.

]]> By: Free Credit Report Blogg http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/#comment-19315 Fri, 24 Apr 2009 10:29:44 +0000 http://www.tvhe.co.nz/?p=3667#comment-19315 […] TVHE » From a negative OCR to negative interest rates … […]

]]> By: Matt Nolan http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/#comment-19300 Fri, 24 Apr 2009 01:15:43 +0000 http://www.tvhe.co.nz/?p=3667#comment-19300 @Miguel Sanchez

Well, they are sort of like QE – except you get some price signals.

QE is like a negative OCR in the same way that a increase in the standard OCR is like cutting the money supply …

]]> By: Miguel Sanchez http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/#comment-19299 Fri, 24 Apr 2009 01:13:35 +0000 http://www.tvhe.co.nz/?p=3667#comment-19299 @Matt Nolan
But then what do the banks buy the bonds with, since they’re presumably not attracting deposits? They’d have to get more and more of their funding from the central bank.

This is the point I was getting towards in the previous discussion: negative interest rates are doable, but only in conjunction with quantitative easing; they’re not a substitute.

]]> By: Matt Nolan http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/#comment-19293 Thu, 23 Apr 2009 23:48:48 +0000 http://www.tvhe.co.nz/?p=3667#comment-19293 @JD

But to what level – if the government dropped $100,000 into everyone’s lap, would we all keep it under our beds …

It doesn’t makes sense to say that we can’t make real interest rates negative – and if needs be we might be able to throw the money in by making nominal interest rates negative …

If that doesn’t work – the army owns helicopters, and our postal service still functions 😉

]]> By: JD http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/#comment-19292 Thu, 23 Apr 2009 23:45:19 +0000 http://www.tvhe.co.nz/?p=3667#comment-19292 I’d damn well put it under my bed.

]]> By: Rate Rates Interest Credit | World News http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/#comment-19291 Thu, 23 Apr 2009 23:42:14 +0000 http://www.tvhe.co.nz/?p=3667#comment-19291 […] households don't want to accept a negative interest rate so they buy assets driving up asset […] GilroyDispatch.com | Time to change the water district's familiar … GilroyDispatch.com – […]

]]> By: Matt Nolan http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/#comment-19289 Thu, 23 Apr 2009 22:41:15 +0000 http://www.tvhe.co.nz/?p=3667#comment-19289 @Miguel Sanchez

Exactly – they do. They buy bonds and the such, pushing up the relative price. It works in the same way as the Fed coming out and directly buying bonds – except we get some idea of the type of risk households and banks are willing to take on

]]> By: Miguel Sanchez http://www.tvhe.co.nz/2009/04/23/from-a-negative-ocr-to-negative-interest-rates/#comment-19288 Thu, 23 Apr 2009 22:32:25 +0000 http://www.tvhe.co.nz/?p=3667#comment-19288 But if households really did have “other savings vehicles that will offer a positive rate of return”, it begs the question: why wouldn’t the banks be putting their money into the same vehicles?

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