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comment by mk
mk  ·  3308 days ago  ·  link  ·    ·  parent  ·  post: Tumbling Interest Rates in Europe Leaves Some Banks Owing Money on Loans to Borrowers

The point might be near where they will have little choice. It seems like they are pushing on string.





kleinbl00  ·  3308 days ago  ·  link  ·  

It's a hedge against Euro collapse. Negative interest rates are an economic tool to maintain a political alliance.

mk  ·  3308 days ago  ·  link  ·  

If, years ago, economists were asked to list precursors of a Euro collapse, the sale of negative interest bonds would likely be on the list.

kleinbl00  ·  3308 days ago  ·  link  ·  

I wonder if they'd have even thought of it. I've yet to see a single pundit go "yeah, we expected that."

Granted, I follow the rationalist macroeconomists and they would argue that "the existence of the Euro" is a precursor to a Euro collapse.