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: Interest Rate Fixed Mortgage article/idUKLH15490720090617 and the answer is basically that Handelsbanken has excess cash and no idéa where to put it.
But that can be interpreted as: we have banks that have bad loans and banks that have cash but cannot come up with any reasonable safe investment than to lend it to Riksbanken.
There is bad investment you can make or not make. Where is the good investment?
Nice article. I wrote an article on Seeking Alpha about negative interest rates, as well, about a month ago.
article/141588-negative-interest-rates-can-solve-our-unsolvable-problem-of-debt-load
I don't really understand why people get so bent out of shape about this subject. I don't see it as any different than a reverse inflation. The system thrives on a mild currency loss, and however that can be obtained seems logical. I'm not advocating that ethically, just trying to imagine solutions to this current unethical mess we're in.
Hmmmmm…. and here I thought it was the Swedish model of handling this crisis that we all had to follow. Ah well, there goes another Euro-Lazy-Socialist theory out the window…
Now, how about microcredits for the Western world? Do we qualify yet as Third World nations?
Vinny G.
Mankiw and Buiter didn't exactly discuss negative interest on reserves, they proposed negative interest on currency, which isn't really technically feasible. Negative interest on reserves is feasible and I have advocated it for the Fed since last fall. In case anyone is interested, here is a post from my blog, which I entered after a long email back and forth with Mankiw on the idea.