Think the world can’t get any more backward?
Central bankers around the world are pushing deeper into the once-unthinkable world of negative interest rates — essentially charging customers to hold their cash. Denmark set negative interest rates as early as 2012, followed by the ECB in 2014. Since then, they’ve been joined by Switzerland and Sweden. In Asia, the Bank of Japan announced a negative interest rate policy in January this year. Hungary became the first emerging market to experiment with negative rates, taking the plunge in March. With more of the world’s central banks joining in, and rates pushing further below zero,
In Denmark: Some mortgage holders are the envy of home owners around the world. With negative interest rates, they’re actually receiving interest payments from the banks they initially borrowed from.
In Switzerland: Few banks are dealing with negative interest rates by passing them on to their customers, but Alternative Bank Schweiz in Switzerland is bucking the trend, and charging clients to hold their deposits.
Imagine being paid money to take $200,000 from the bank and spend it. To a rabbit, this is wise economic policy.
When rabbits see a world of contracting resources, and they notice certain people hording resources for themselves, they naturally think the best strategy is to punish people for holding on to resources, and reward them for spending everything they have, and then borrowing more and putting it into the system too.
This is the byproduct of an instinctual perception which arises in the brain, when it is exposed to extended periods of free resource availability. The brain molds its entire perception of reality around those conditions it has observed. Suddenly, free resources and the pleasures their brains have observed are linked, like gravity and the inevitable fall one experiences when jumping off a high platform.
If the good times begin to stop, the problem is the change in psychology produced by the sudden lack of free resources, so the best strategy is to restore the free resources by whatever means possible, so the happy, spendthrift psychology will return, and so will the economic good times.
We know there are deeper natural laws at play which the rabbit hasn’t noticed. It is like a person thinking that just as a crashing plane hits the ground they will jump up, and then they will land on the ground softly and survive while everyone else dies. It isn’t going to work. But the rabbit can’t understand that. Their brain literally lacks the circuitry.
[…] Negative Rates Begin To Be Employed […]
On another topic, it’s started . . . CDC reports first Zika case in gay couple.
I think this is one if the key vectors for this behavior evolving. I.e. convincing the group to force everybody else within the group to pool their resources “(and distribute them) evenly” and then join in to, what is comparatively, a veritable feast. Anybody below average has a good chance of being better off utilizing that strategy.
Once that quality has been selected for it is only a short step further to introducing additional hardship (in whatever form, up to and including, opening the gate for invaders) into the group to strengthen group cohesion and possibly gain some residual compassion along the way from the defensive contraction an external threat brings with it.
It’s funny about lacking the circuitry. A few rabbity people I work with at some point figure out that I have some preps for catastrophic events, and there’s always the “well now I know where to go when something bad happens!” line.
I love the looks on their face when I say, “Anything I give to someone else is less for my family, and if they don’t have enough they die. That means that I treat any moochers as lethal threats to my family.
“If you want to commit suicide, I would suggest gassing yourself with your car. It’s a lot less painful than what I’ll do to you when you show up on my doorstep.”
They can’t conceive of the idea that limited resources means people dying (even though that’s what makes the catastrophes they are thinking of catastrophes), but for some reason they get the idea of a “greedy” person murdering them, so that tactic works.
For me, this negative interest rate insanity, is proof of the pudding for r/K.
The ability to string together cause and effect on the most primitive level should insure no one ever thinks this is a good idea.
There is an obvious lack.