Negative interest rates are pretty cool and all. However I want to see even more fiat accounting innovation.
We aren't using the whole complex plane here people! Imaginary interest rates are the next big thing, you heard it here first .
Next step will be directly confiscating money from accounts: -10% interest means your money at banks get a hair cut by 10%
Obviously, if they print more money, there will be more deflation (more money means more debt, thus more austerity and less spending), a low inflation rate will make banks keep printing until they bought every assets out there
How do you figure if more money is printed that leads to deflation?
FED print 100 dollar, and bought 100 dollar worth of government bonds, and then government have 100 dollar to spend. However, they must make back that 100 dollar plus interest, means the total money in the society will lose $2 when they return that 102 dollar to central bank. So, for each 100 dollar FED print and retrieve, the society as a whole will lose 2 dollar, a temporary stimulation is followed by a even deeper deflation due to less money to spend in future
Even there is no interest charged, this temporary stimulation will increase the incoming and spending of the society for a while, but when it stopped, people are staying at a much higher living cost of everything, with same amount of money in society, thus quickly fall back into recession
The only way out of this deflation spiral is to expand the debt forever exponentially, but then the ballooning interest cost will cut more and more into the income and eventually income will start to shrink no matter how much more debt is raised