Quote from: jabo38 on February 17, 2015, 03:34:38 PM

Quote from: Possum577 on February 16, 2015, 04:42:15 AM

http://finance.yahoo.com/news/banks-in-europe-are-charging-to-hold-deposits--could-it-happen-here-195532627.html

YES!

The linked article talks about how a bank in Denmark is charging its customers for the privilege of holding their savings, negative interest rates. The bank doesn't pay you for your savings on deposit but you pay the bank to hold your savings secure because the market alternatives are so risky. The article speculates (very broadly) that it could happen in the US...it likely won't, but if it did guess what would provide a good alternative to traditional savings?

You guessed it...the almighty B-T-C...what an interesting turn for bitcoin that would be.

Can't this trigger a run on the banks? Why pay them to store my money when I can just hide it under my mattress?

That is the beginning of a deflationary spiral -- why spend today when your money can buy more tomorrow?
This might sound great for savers but in reality it wrecks economies. Because spending is the origin of wages, nobody gets paid if nobody spends and ultimately unemployment increases, and well it is a spiral so the negative effects are self-reinforcing.

A zero- or negative- interest rate policy is meant to encourage spending. Why save your money if it will buy less tomorrow? However, this can have unintended consequences, not least of which is a large amount of inflation-- why sell your stuff for a low price when people want to get rid of their money at any price?