Discover and read the best of Twitter Threads about #nirp
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Eric, we've been through a decade of easy money, finance centric solutions of 2008 which was the key to the deindustrialization of the west. Now to some extent is better and to some is worse.(/)
The better part is that goods producing companies have NEVER returned to the blind trust in the banking system they had before. Less leverage, and slamming the door in bank salesmen's faces helped. (/)
Agreed. The singular advantage of money as a near-universally acceptable, reliable medium of exchange is that it breaks the need to know and trust counterparts all along the chain of trade & production. 1/x
This not only expands -and hence enriches- the network of exchange (think Adam Smith or “I, Pencil”) but removes node-occupying middlemen and toll-exactors. Efficiency increases, but transparency and fairness, too. 2/x
Once we have #CBDC-s -coupled to #Agenda2030 #IoT tracking of ‘#carbon’, meat protein, ‘circular economy’, low food miles, etc, we will have subjected ourselves to an intrusive, permanent rationing where a tax collector, a camp guard, and a Levitican Inquisitor...
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Thanks to @GeoffCutmore & @cnbcKaren for this morning's chat on #SquawkBox.
I did TRY to find something positive to say - honest, folks!
Following are the notes I sent the team before the show:-
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I did TRY to find something positive to say - honest, folks!
Following are the notes I sent the team before the show:-
🧵1/x
Ok. So here goes...
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Something I've mentioned on here: the enormous scale of Europe's energy problem runs into the €trillions. The #AmpelDesGrauens "Doppel-Wums" -'bazooka' - relief package is €200bln & doubts are *already* being voiced whether will suffice.
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THREAD: Me, after having correctly predicted that this was what they were aiming at. #CBDC is #NIRP for the masses plus end of deposit insurance schemes.(/) @Halsrethink @nglinsman @jeuasommenulle @AlessandroPonz4 @amlivemon @chigrl @DiMartinoBooth
But, there is a scary thing. as of now, deposit insurance is 100 K EUR per head per bank. covering the first 3k though #CBDC is so measly that it's ominous.(/)
My original post ( ) surmised negative rates on CBDC, making it not a currency, but I thought the maximum allowable before paying #NIRP would either have been zero or 100 k per head. (/)
THREAD: the article is a fair depiction but needs a local like me to fill the blanks. on.wsj.com/36jgtIP (/)
@nglinsman @amlivemon @DukeMarcude @eshow1969 @chigrl
@nglinsman @amlivemon @DukeMarcude @eshow1969 @chigrl
There is a reference to #NIRP, which is killing the #EU private sector, but I already wrote extensively on that. What caught my eye was: "The oversize exposure of banks to small businesses is part of Europe’s economic fabric. (/)
"Companies with fewer than 250 employees account for 99.8% of all firms and two-thirds of all private-sector jobs in the European Union, according to the European Commission. Small businesses in the U.S. also have economic weight, but they tend to be bigger."(/)
THREAD: THAT is the Mother's milk this political generation has been raised on. For them, "Price" is not something born out of an heuristics no participant needs to know much for it to work. (/) @nglinsman @amlivemon @Halsrethink @bondstrategist @jeuasommenulle
Hence authorities' daft approach to market rules, for which look no further than #NIRP: Their beloved "professional" money is buying something that would have had my illiterate grandmother grab her shotgun. (/)
Yet, the main culprit of that is not the political class. It's the Central Bank, which abetting the loss of power of savers in favor of authorities and banks, and adding NIRP, excised the continuous test policy had to pass. (/)
Negative Interest Rates #NIRP do more harm to #Centralbanks than they do good
Times are changing with hard cash to online digital payments
The world has been forced to adapt to new methods of online payment like #Debitcards , #creditcard and #mobilewallet payments
Times are changing with hard cash to online digital payments
The world has been forced to adapt to new methods of online payment like #Debitcards , #creditcard and #mobilewallet payments
Few use cash and the global elites are using negative interest rates to do the same thing as inflation make money disappear
The U.S. discontinued the use of large-denomination bills in the late 1960s. Until 1969, $500, $1,000, $5,000 and even $10,000 bills were issued and today
The U.S. discontinued the use of large-denomination bills in the late 1960s. Until 1969, $500, $1,000, $5,000 and even $10,000 bills were issued and today
the largest bill is a $100 bill, but it has lost 80% of its purchasing power since 1968
Europe has ended the 500 euro note and today the largest note in euros is 200 euros. Existing 500 euro notes will still be legal tender, but new ones will not be produced.
Europe has ended the 500 euro note and today the largest note in euros is 200 euros. Existing 500 euro notes will still be legal tender, but new ones will not be produced.
A very interesting @WSJ article over the weekend regarding how #European governments that have railed against U.S. big #tech companies over privacy concerns are now embracing these same companies’ #coronavirus contact tracing #technologies.
This gets to a longtime argument we’ve made about @ecb policy and the role of #innovation in spurring greater #growth in the region: blackrockblog.com/2019/07/25/bol…
Essentially, it has long been our view that negative interest rates (#NIRP) are counterproductive and what’s needed is #equity investment in innovation, #technology, and 21st century #infrastructure.
Proposition: #Banks won't rally because rates -long & short- are too low; #Japan is our marker, banks there falling while US/#EZ rose pre-#GFC, not gaining afterward; Also v-a-v EZ peers, #US bank returns were anomalous, ergo can't be repeated. 1/x
Response: Banks make money by increasing charges in the absence of NIM
NB: When long rates are artificially suppressed & flattened to/thru 0%, opportunity cost vanishes and demand for money -as a savings medium, not a transactional tool - RISES 2/x
NB: When long rates are artificially suppressed & flattened to/thru 0%, opportunity cost vanishes and demand for money -as a savings medium, not a transactional tool - RISES 2/x
It wasn’t low rates per se that held #Japan banks back, post 1989, but scattered failures and an heroic amount of write-offs and restructurings of their toxic, bubble-era legacy - something which helped the country’s eventual, creditable real per capita GDP recovery. 3/x
"Theory tells us why Japan didn't inflate" Really? News to most! But two things may explain it - business made a big shift from heavily indebted to positive cash, mirrored by the state's plunge into the red, intermediated by the BOJ... 1/x
In effect, corporate debt was slowly washed to the government whose IOUs were bought by the #centralbank. Reserves issued v these offset bank deposit liabilities to the now flush businesses happy to hold them because #NIRP destroyed transaction/savings balance differences 2/x
Meanwhile, much of #Japan's newly created money was swapped up and used to finance speculative purchases elsewhere in the world - as shown for Grand Cayman 3/x
Not to root for state or CB intervention, with #coronavirus, its inevitability must be faced. So how to make it the least damaging and not allow it to become entrenched in the system and lead to another decade of distortion & waste like post-#GFC? 1/x
Problem is to try to avoid the failure of otw viable firms because of disruptions due to the global health emergency - & also to spare their employees from ruin. Flooding money into financial markets is NOT the answer, #JayPowell! Blind fiscal expansion, neither, #DonaldTrump 2/x
Here's the kernel of an idea. Finmarkets are desperate for 'safe assets'. nominal yields are trifling; real ones negative. S-o-o, launch a special series of #Treasury bonds to sate the market's hunger & halt the potentially disastrous collapse in yields. 3/x
As we continue detailing our key themes for the year, we’d note that in our view: 5) #fiscal policy is a right-tail #risk (not left-tail) in 2020; and 6) the negative #bond yields in #Europe and Japan may well turn to negative returns by year end.
While a thoroughly divided #government in the U.S. during an #election year is quite likely to limit the possibility of additional #fiscal spend here, the story in #Europe is a bit different.
