35 ms·
"Were interest rates negative enough for long enough, specialist security firms would emerge that would build vaults to store cash" I see this speculation from
by kbart 11y ago
"Were interest rates negative enough for long enough, specialist security firms would emerge that would build vaults to store cash"
I see this speculation from time to time, but no data to back it up. I wonder, who benefits from such rumors? To my limited understanding in economics, negative interest rate is to encourage lending vs hoarding, so while money is moving, you don't actually "lose" them?
- redwood 11y agoThe idea is that just as you're supposed to want to lend... you might also choose to stockpile cash. Both strategies potentially mitigate the negative interest. In tho regime, banks pay the central banks less in the future for money they take on loan now. The common sense assumption is that this means money will be worth more in the future. Therefore you may want to invest in cash. At a point, this makes cash like gold traditionally and hence stockpiling aka fort Knox. But that's why you can go negative...you just cant go negative enough such that folks start stockpiling. Iraw expensive to stockpile