Negative Interest Rates foster The Phenomenon of Zombie Corporations - Economic Collapse

The bankers control the governments of the world and are cheapening the cost of money by enticing people to go deeper in debt: The rich always seek clever ways to suck more wealth through bondage to their debt: Proverbs 22:7 : The rich ruleth over the poor; And the borrower is servant to the lender. Welcome to The Atlantis Report . With Negative Interest Rates , Credit is extremely cheap and in some cases you are even paid to take it (if banks acquiesce to the negative interest rates set by the central bank). Second, because negative interest rates weaken banks by destroying operating margins, they will try to avoid capital losses by extending credit to ailing or even insolvent borrowers. Moreover, negative interest rates kill the incentives to invest in productivity-enhancing technologies by supporting industry leaders, which usually pay lower premiums for loans. As very low or negative rates naturally favour dominant firms, competition is strangled, leading to a fall in overall investment. As a result, productivity growth starts to stall leading to stagnation in the overall economy. This crucial but perverse mechanism has yet to be broadly understood. The backward economic logic of negative interest rates also corrupts the role of time-preference. Normally, time depreciates physical products and introduces risk to financial transactions. When you have money and lend it to someone, you tend to demand a premium which represents compensation for the fact that you have to postpone your own current consumption and the very real risk of not getting your money back should the borrower become insolvent. This discounting is at the heart of every economic transaction. Why would anyone want to lend if they need to pay the borrower? This is the absurdity already observed in global bond markets, but it is likely to be much more damaging in the economic interactions of everyday life. This is because negative interest rates fly in the face of both economic logic and our innate human sense of rightness. If we must pay to deposit money and to lend, but receive money if we borrow, our economic thinking corrupts. If such perversion continues long enough, it is likely to have far-reaching social and economic ramifications, which we can only guess at the moment. So, what negative rates do is seriously impair the profitability of the banking sector, foster the creation of “undead” companies, kill productivity growth and deform financial relationships. They may be the single most destructive form of monetary policy ever invented. Now, with both the departing and next leadership of the ECB advocating for negative interest rates, we should fear for the future of Europe. The banking sector of Europe is already weak, but likely to get weaker due to the approaching recession. European economic turmoil will likely be exacerbated by significant numbers of zombie companies unable to cope with the recession, and the malign incentives associated with negative interest rate structures. All this, because central banks, and especially the ECB, are unable to admit that their monetary policy experiment has failed. They have become a massive liability for the global economy. If central bankers cannot admit their failures, and “face the music”, it’s time for them to go. I’ve never heard of a consumer getting a negative rate loan. Only banks. This doesn't damage the bankers profit margin. They are paid to borrow money printed from thin air (which the tax payer now owes to the central bankers) and they lend it to corporations at a low interest rate; they now get paid twice, Am I missing something ! I see how this keeps zombie corporations in existence, but what it mainly does is transfer the ownership of everything (buildings, real estate, publicly traded business, private businesses, vehicles, intellectual property, and debt) away from the average person and into the hands of the wealthy, in particular, it transfers wealth into the hands of the banks. And the citizens have to pay the principal back to their governments. The banks aren’t losing this game, the little guy is. Negative interest rates are required for socialist/communist constructs. Folks, it is part of the grand plan. They aren't in place to stoke demand; They are slyly inserted as a yoke on the system to choke whats left of capitalism, coercing the system to central planned communism. If USA goes down there, it is game, set, and match. Think of the smile on Soros's face! What the central banks are doing is performing a Ponzi scheme of historic proportions... we are witnessing the death twitches. As far as I’m concerned they should all be with Bernie Madoff.









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