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> i dont get how interest can be negative - i get paid money for borrowing?! Yes, that is how negative interest works. I should have qualified that, though, w
by Amezarak 11y ago
> i dont get how interest can be negative - i get paid money for borrowing?!
Yes, that is how negative interest works.
I should have qualified that, though, with "real interest rates", meaning that inflation is accounted for. Rates in the US at least are nominally not negative. But the net effect is the same: a borrower with a negative real interest rate is being paid to hold your money. This implies that investors are looking for very safe places to keep their money, so much so that knowing you're going to lose a little bit is OK.
- jcranmer 11y agoAt times during the Great Recession, nominal interest rates on US (and German) bonds did actually go negative for brief periods of time.