Japan cuts interest rates to below zero

[itsybitsy]

http://news.sky.com/story/1632170/will- ... -rate-work

https://www.boj.or.jp/en/announcements/ ... 60129b.pdf

Today the Bank of Japan surprised pretty much everyone by cutting interest rates below zero.

The full details of the move can be found in the useful primer on the BoJ website (link above!) but the brief gist is as follows: new deposits held at the central bank itself will now face a 0.1% charge (that, after all, is what a negative interest rate is), the BoJ will not increase its quantitative easing programme, and it now expects it to take even longer to get inflation up to its 2% target.

[Briggs 2.0]

So, in very simple terms, this is a government-funded discount so lenders can lend money for less, so people who couldn't/shouldn't borrow can now borrow and those that could borrow but wouldn't borrow can now borrow more, for less.

New BMWs and over-priced houses all round!

[jansman]

That is the f***** up world we live in.

[redskies]

So, in very simple terms, this is a government-funded discount so lenders can lend money for less, so people who couldn't/shouldn't borrow can now borrow and those that could borrow but wouldn't borrow can now borrow more, for less.

New BMWs and over-priced houses all round!

Hang on, that's the beginning of a story I've heard before. I'm fairly sure the ending goes something like this ...



and the irresponsible lenders and borrowers contributed to the circumstances that caused the economy to tank and banks to fail, but it was ok, because the government used the publics tax money to shore up the irresponsible lenders, the irresponsible borrowers, well, no one cared what happened to them, and as for everyone else, well they kept paying, and paying and paying. Except for Iceland.

[Briggs 2.0]

So, in very simple terms, this is a government-funded discount so lenders can lend money for less, so people who couldn't/shouldn't borrow can now borrow and those that could borrow but wouldn't borrow can now borrow more, for less.

New BMWs and over-priced houses all round!

Hang on, that's the beginning of a story I've heard before. I'm fairly sure the ending goes something like this ...



and the irresponsible lenders and borrowers contributed to the circumstances that caused the economy to tank and banks to fail, but it was ok, because the government used the publics tax money to shore up the irresponsible lenders, the irresponsible borrowers, well, no one cared what happened to them, and as for everyone else, well they kept paying, and paying and paying. Except for Iceland.

That's about it, but hey, according to the advert I just watched, there's no need worry, you can get a new Mercedes A Class for £279 a month.

[redskies]

So, in very simple terms, this is a government-funded discount so lenders can lend money for less, so people who couldn't/shouldn't borrow can now borrow and those that could borrow but wouldn't borrow can now borrow more, for less.

New BMWs and over-priced houses all round!

Hang on, that's the beginning of a story I've heard before. I'm fairly sure the ending goes something like this ...



and the irresponsible lenders and borrowers contributed to the circumstances that caused the economy to tank and banks to fail, but it was ok, because the government used the publics tax money to shore up the irresponsible lenders, the irresponsible borrowers, well, no one cared what happened to them, and as for everyone else, well they kept paying, and paying and paying. Except for Iceland.

That's about it, but hey, according to the advert I just watched, there's no need worry, you can get a new Mercedes A Class for £279 a month.

I'll stick to shanks pony or the cheap and cheerful family car. Given that we live in one of the ... lumpier bits of the UK, cycling is right out!

[Mortblanc]

Folks this is not a "free loan" situation.

It is a fee charged on deposits, investments and savings.

It is to encourage people to take money out of savings and spend it because it is costing them to have it in savings.

Japan has always prided itself and been held up as an example to the world for the high rate of savings in their society. Too much of it keeps money out of circulation and stagnates purchasing of consumer goods.

[Catweazle]

It apples to corporate money and is designed to encourage corporations to either lend or invest their money, and thus stimulate the economy.

[nickdutch]

Fun times ahead. Crazy yes, but also fun. More entertainment on the news channels as left and right score points off eachother. and what happens over there may very well happen over here.

[grandad]

Negative interest rates will be in uk very soon.I cashed out my ISA over 12 months ago and bought pm which will over the long term always increase in value.