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
I don't think I agree with this. If the $100 is printed and we now owe $102 to the fed, then we have even more money printed to pay our debts back and this cycle repeats. Yes debt forever increases (and at a faster rate than the money supply), but all of this printing leads to inflation (dollar becomes cheaper and it takes more of them to buy the same good)...It's only if we stop printing that we would start to have deflation and economic collapse.
Please tell me if I'm wrong or missing something.
Found a quote from that article that i like
Innovators are eager to try new ideas, to the point where their venturesomeness almost becomes an obsession. Innovators interest in new ideas leads them out of a local circle of peers and into social relationships more cosmopolite than normal. Usually, innovators have substantial financial resources, and the ability to understand and apply complex technical knowledge. While others may consider the innovator to be rash or daring, it is the hazardous risk-taking that is of salient value to this type of individual.