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If you look at it in terms of purchasing power rather than on a nominal level, we've been there many times. Honestly some commenters in the Netherlands were su
by IkmoIkmo 5y ago
If you look at it in terms of purchasing power rather than on a nominal level, we've been there many times.
Honestly some commenters in the Netherlands were surprised over the past six months that people suddenly took action when their savings account went from 0% to -0.1% interest, but were entirely passive when their 0% interest account was exposed to 2% inflation for years, which has a much larger impact on purchasing power and was essentially subjecting people to negative annual returns on their purchasing power (i.e., the metric that matters).
- csomar 5y agoI think people are not that smart but also not that stupid. People are used to small amount of inflation (in Western countries) and thus already planned ahead for it. It works differently in countries with high-inflation, people take notice when prices are increasing fast. My guess is that people expected bank accounts to work as something they have, that is secure and untouchable. It's not that it can't happen (a bank can go bankrupt and the CB refuses to cover the customers) but people who haven't gone through it, believe it can never happen. Their balance being reduced tipped them off that something is not quite alright. What I'm trying to say is that people are more concerned about the bank dipping into their accounts (regardless of the amount) rather than them losing some Purchasing Power.