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"It also allows for a true negative inflation rate. Imagine being unable to remove your cash from an account that earns negative interest." Negative inflati

• imtringued 5y ago
  From a consumer point of view it is a win, but you have to earn the money in the first place and that means over time your employer will have to cut your wages in nominal terms, because your real wage is going up year by year. Employers would demand deflation adjusted wages or just fire their overpaid employees. Deflation is also a win for people who have inherited their wealth a long time ago, because they have to do absolutely nothing to protect their wealth. It's basically rent seeking but this time it is with money. There is another problem, the real value of debt grows over time, which makes it harder to repay debts. However, I will admit one thing, occasional deflation spikes are not a bad thing, if they are followed by inflation that meets the 2% target.
• Infernal 5y ago
  I believe this was just a typo, or a braino - from the context I assume the author meant a "true negative interest rate".
  • lozf 5y ago
    Right, a case of use it (potentially only at approved retailers / service providers) or lose it (your stash depletes as you "save" it).
    • reedjosh 5y ago
      And there's no reason unspent money couldn't just become a tax. So, a negative interest rate from your perspective, but a revenue stream to govs. At that point, good luck ever having enough sovereignty to retire unless the Gov sanctions it.