Negative Interest Rates: Backwards Dealings
Here’s an article from the NY Times about the effects of negative interest rates. According to the article, negative interest rates have been affecting European and Asian countries as of late. A quote that struck me from the article:
“The effects have been mixed: Negative rates on foreign debt have helped keep a wide range of interest rates in the United States unusually low, which translates into good deals for borrowers and bad for ones for lenders, including major banks, whose profit margins have been compressed. For older people trying to live on their bond investments, low rates result in paltry income and painful choices.”
Also, I’m not excited to learn that the United States has said they would use negative interest rates in a time of economic turmoil. Let’s hope it doesn’t come to that.