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This doesn’t make sense to me. The reason interest rates are negative is that the demand for USD is so high that you have to pay for the privilege of storing yo
by ryanwaggoner 6y ago
This doesn’t make sense to me. The reason interest rates are negative is that the demand for USD is so high that you have to pay for the privilege of storing your wealth in USD.
- effie 6y agoAny source for such a wild claim? Interest rates are so low because people controlling the FED decided the rates to be low. They did so, as the story goes, to stimulate the economy growth, to make banks more likely to lend and companies more likely to borrow money and use the money they have to buy things, hire people, increase production. Of course, the reality is more complicated and lot of that newly created money just pumps the stock market with little benefit to economy. One indeed has to pay banks for storing money, whether in USD or EUR, that's why big wealth managers don't keep big wealth as money but invest in diverse assets. Storing some USD is no privilege, it is a necessary liability. USD is needed for transactions, not for storing wealth.