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I'm not saying it should be completely unhinged, but something like a -1% interest rate, is that so much more shocking than a +1% interest rate? I don't think s
by pishpash 7y ago
I'm not saying it should be completely unhinged, but something like a -1% interest rate, is that so much more shocking than a +1% interest rate? I don't think so. People can deal with airline miles, hotel points, credit card rewards rationally; heck some are even paid in stocks or options which are much more volatile and uncertain. They seem to do fine.
- PopePompus 7y agoThere is a huge psychological difference between 1% and -1% interest. People do not react logically to loss (https://en.wikipedia.org/wiki/Loss_aversion https://en.wikipedia.org/wiki/Loss_aversion). Even though regular bank accounts have provided negative real interest for years, once they actually switch to explicitly "paying" negative interest, accounts will empty fast.
- ericd 7y agoExcept no one in a stable developed economy equates those loyalty programs and how those systems operate with how their nation’s currency operates, or should operate. Are you not annoyed at all the random games those companies play with those point systems? I don’t value those points highly at all because of the frequent devaluations they go through. I would not want the same fate for my currency. Are you willing to subject everything you’ve ever worked for to that kind of thing? And one of the key reasons for maintaining a positive interest rate on lending is to encourage sound investment decisions by the capitalists borrowing it. Low interest rates beget more and more speculative investments, and more and more of those will go bad. And then you get a debt crisis.
- petre 7y agoGood luck with your pension fund then.