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Negative interest rates are about fighting deflation; in a deflation the surrounding society needs to produce a positive real return to the holders of the most
by chvid 11y ago
Negative interest rates are about fighting deflation; in a deflation the surrounding society needs to produce a positive real return to the holders of the most riskless asset, cash. This is why it is an unhealthy state for an economy to be in. If you are cash less you can avoid this.
- duncan_bayne 11y agoBut negative interest rates destroy savings, encouraging malinvestment. I don't understand from your reply how you think saving would work in a cashless environment experiencing negative interest rates.