Could interest rates really go to zero?
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2222 points
readytoretire answered one year ago …
Could they. Yes. Will they. No. They are currently at 1%. The Fed is due to meet within a month and I think they will drop the rate some then. But I don't think they want to allow it to go to 0 like Japan. I think they will say that until the market rates come down, they don't need to drop it that low.
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546 points
warren answered one year ago …
The already are on real money, gold and silver! In addition to dollars being really worthless the low interest rates are what will help drive the dollar lower as fast as it went up, roughly.
Warren,
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989 points
rvilmur answered one year ago …
They already have for a short period 3 month T-Bills had a slight negative interest rate.
After the stock market crash in Japan due to an extreme real estate bubble (sound familiar) the Japanese kept interest rates at 0% for many years to try to get their system going again. It didn't work because the banks were sitting on and not acknowledging a huge amount of bad mortgage paper. It was if you don't admit it the problem isn't there which may be peculiar to the Japanese. Since their capital was locked up in bad mortgages, they had no money to lend to get the economy going again. The Japanese government didn't dump money into its economy like ours is doing now. The whole thing took more than 15 years to resolve.
731 points
thinker70 answered one year ago …
As Warren has pointed out, EFFECTIVELY interest rates are ALREADY at ZERO because they are below the rate of inflation, which by the way is probably DOUBLE or even triple the governments lying statistics that exclude food and fuel!
What the Fed with governments collusion is really doing is trying to push on a string, the problem originated with too much DEBT that under the fractional reserve, central bamking, fiat currency system is e-x-p-a-n-d-e-d with each new loan.
The trillions now being ADDED to the system simply DILUTES the value of existing dollars, adds to the debt load that has to be paid back with interest, thereby generating even MORE INFLATION! The simple fact is the SYSTEM is badly flawed, and as the Japaneese experience demonstrates, once the FED has exhausted its ammunition of interest rate cuts as an inducement to borrow, (GO FURTHER INTO DEBT) then hyperinflation stands in the wings. The only SAFE haven is hard assets like gold and silver that have maintained purchasing power for 5000 years.
The problem is
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