European Central Bank Introduces The Negative Interest Rate

399px-Logo_European_Central_Bank.svgThings just keep getting rougher for average citizens in Europe. Some have faced government seizure of accounts to help fund government operations and requirements that they explain withdrawals to their banks. Now, the European Central Bank (ECB) is imposing a negative interest rate on banks for their deposits. So, you can keep your money under your mattress or put it in a bank where the bank will use it to earn money while charging you for the pleasure. This is of course the central bank which directly relates to individual banks as opposed to individual depositors. Those banks will now pay to park their money and those costs will be passed along to depositors. Banks are likely going to try to hide the fact that the interest rate is now negative through fees and other measures.

The ECB cut the rate on its deposit facility for banks from 0 percent to minus 0.10 percent. It also cut its main interest rate to from 0.25 percent to 0.15 percent as well as cutting the rate on its marginal lending facility by 35 basis points to 0.4 percent from 0.75 percent.

It is an interesting situation where banks will now be treated as solely a safe place for holding your money but you will pay for the service as a fee. Much like the airlines where aspects of what was once viewed as the basic service are being converted into fees, banks will now be treated as akin to a safety deposit box. However, unlike airlines or safety deposit boxes, the banks are making money off the deposits. It is a fundamental change in function of banks.

I have long been critical of the tax increases and measures in Europe that will likely have displacement impacts on investments and movement of citizens and businesses. In this case, I would expect people to look for alternatives from Internet banks to foreign banks.

361 thoughts on “European Central Bank Introduces The Negative Interest Rate”

  1. It’s amazing how intelligent minds have been duped by the denial wing of the oil industry

  2. David: Nobody is seriously proposing eliminating fossil fuels from the economy cold-turkey. All the proposals call for reductions over time. Trains would be an important travel and shipping component in a eco-friendly economy.

    Gas should cost more to reflect the true economic costs of its use, from extraction to deleterious health and environmental effects. Higher gas prices has worked well in Europe, which has developed better transit systems and more fuel efficient autos. Eliminate the oil welfare, aka subsidies at the least.

    Your wrong about the last ten years of data. Recent data shows that CO2 is spiking above 400ppm and an increase in ocean acidity, along with rising sea levels. Once again, you’ve turned data interpretation into a gymnastics routine.

    Also, the overwhelmingly vast majority of scientists believe the data supporting the anthropogenic causes of climate change (that means caused by humans, Jim). It doesn’t surprise me that you would not believe the evidence. We’ve seen time and again on this site that you refuse to believe the truth when it’s obvious to everyone else. Then again, your hoping for magic buttons to make the poor disappear.

    The only way you would believe in global warming is if Jesus came down and told you (if does come appear, I have no doubt that you’ll be the first person he looks up). But what if gods sending us a message through melting ice caps and disintegrating polar ice fields, among the many other signals. Wouldn’t you hate to find yourself standing before Him, trying to explain why you ignored all his signals?

    1. RTC wrote: “… the overwhelmingly vast majority of scientists believe the data supporting the anthropogenic causes of climate change … It doesn’t surprise me that you would not believe the evidence.”

      Why are you making climatology into a religion?

      Facts are facts. We all accept the facts. When people start talking about “believing the data” (what they really mean is believing the interpretation of the data), that is when we have a problem. It means that we have moved from doing real science to arguments based upon the dogma and declarations made from that authority. Such is indistinguishable from most religious systems.

      The real case here is that you “believe” authorities who have been proven to lie with the data to make their case. Others remain skeptical, and skepticism is the foundation for good science.

  3. DDT? You gotta be kidding me. DDT is not only harmful to humans but devastating to wildlife. You know what works better than DDT? Nuclear bombs, but for some reason, people don’t take mosquitoes that seriously.

    Debts will rise and debts will fall. Clinton and Dole demonstrated how easy it is to tackle a problem once the commitment is made. The rise in global temperatures will continue drifting for several centuries and will affect species worldwide; it’s much more serious than debt and deficits; they won’t jeopardize the survival of our species.

    But you’re right Jimmy, no sense discussing this with a closed mind. You been told to ignore the evidence and you won’t believe until the truth until a member of the Carlyle Groups security team boots their boots on your face and forces you back from the compound.

    1. RTC – DDT is used here regularly because we have a West Nile problem. And I would not believe anything that came out of the mouths of the apologists for Michael Mann and his merry band of climate hoaxers. When Mann releases his data to the public for verification, then I will start to listen. Until then, it is all smoke and mirrors. Right now all data interpretation is based on Mann’s fraudulent data so there is nothing to go by.

  4. RTC,
    Oh, the children! If you were really concerned with world and children you would be marching to release the ban on use of DDT. Instead you put your efforts into something you can’t prove, and have know idea if it is true, if it is even a problem. But like I said before, there is no sense in discussing this since there is no chance I could ever change your mind. As nick said, to each his own.

  5. RTC, The way I see it, a movement of any sort could not have a worse spokesman than Al Gore. I also see more urgent wars to wage for our grandchildren. First on my list, not keep saddling them w/ oppressive deficits and debt. RTC, we all have our own priorities and philosophy. Fiscal responsibility is mine. Climate change is yours. To each their own.

  6. Nick: It’s important not to get caught up in personalities when discussing something like climate change. Gore isn’t my ideal spokesman, but he brought this issue to the forefront for many people who otherwise would not have given it a second thought.

    I believe in giving credit where credit is due. Gore has become a lightning rod for the denial industry because of his flaws are so easy to exploit. That doesn’t change the validity of the data or the seriousness of the implications of global warming.

    This is a battle that we, the people, must wage for our grandchildren, because if we don’t, it will be too late for their children.

  7. Jim: LOL. Literally. LOL

    “You really show no education beyond what you have been told.”

    The very same could said for you. In fact, you really show no education, more like indoctrination,

    Chinese wages are increasing, but not because of their use of fossil fuels. Chinese society is emerging out of the dark ages of Maoism and becoming more affluent. In response, the Chinese government has raised the minimum wage several times. First, to forestall unrest, second to promote consumption within their own borders; they can see the day when they are the consumers as well as the producers.

    Furthermore, Jimmyboy, the costs of importation are rising, which as you point out, is leading to a reinvigoration of sorts for domestic manufacturing (we need more autocad degrees, in case your still looking for a career). But none of that is going to happen fast enough to slow the damaging effects of human impact on global warming. We need action now if we’re going to limit the most damaging effects of global warming. Assuming the 22 stands for your age, your grandchildren are facing a very bleak future. And that’s going to cause your children a great deal of heartache.

  8. “What’s the worst can happen if we’re wrong” are the exact words used by John “Man up” Kerry. That’s a helluva philosophy. That was the same philosophy used for Eugenics.

  9. Paulette,
    Playing the uncertainty principle card and Annie can only sit a do name calling. You believers are all racists since the regs you want to impose will hurt the poor more than the rich. I figure I would try to play the racist card before you do. This is why it is pointless to argue with the liberal “Imagine” mind. Puallette, if you really believe in the uncertainty principal, how do you get up in the morning since anything you do could end causing your death. As Al Gore showed us, the g.w. alarmists are all about money and controlling us.

    RTC,
    You really show no education beyond what you have been told. If you thought a little about world economies, you would see that manufacturing will be coming back to the U.S. as china becomes richer, through the use of fossil fuels their wages will increase and as the cost of fuel rises, shipping will start to become an obstacle that U.S. companies will not be willing to pay. This is already starting to happen. The jobs that will be in jeopardy in the future will be ones where you sit at a computer since they can be anywhere. As for run away g.w. what is your proof? You have none.

  10. Paulette, very interesting and alarming, but it won’t mean a thing to the deniers, the flat earthers of modern times.

  11. Persona: I have degrees in horticulture and ecology, bub. Maybe you should look it plant respiration.

    Schulte: The only conspiracy going on is in the denial industry.

  12. My question to anyone who doubts the validity of human actions contributing to climate change is this: If you doubters/deniers are correct, the biggest tragedy would be the money wasted on cleaning up our air. If we (those who see a direct correlation) are correct and governments do not put forth a “moon shot” effort, we as a civilization are actually sunk.

    Would you believe Dr. Gavin Schmidt, Climatologist, NASA, discussing the Intergovernmental Panel on Climate Change’s 5th Report?

    1. The climatologist for NASA is a co-conspirator to Michael Mann and his merry profiteers. If the science is good, Mann needs to give up the data. Until that happens, nobody and that includes Dr. Gavin Schmidt, knows what is going on.

    2. Paulette wrote: “… the biggest tragedy would be the money wasted on cleaning up our air.”

      “Money wasted” is not exactly the tragedy. We are talking lost jobs, lost productivity to the economy, and probably another depression and worse. If what the climatologists are really saying was true, we would outlaw all fossil fuels immediately. Imagine a world where you cannot buy gasoline, diesel, kerosene, natural gas, or jet fuel at all. Ground all planes and prohibit all vehicles that are not solar or electrical based upon hydroelectric or nuclear. Shutdown GM, Ford, and all automobile manufacturers not building clean cars. No more trains. Can you not see the ramifications this would have on the economy? It is about a lot more than “money wasted.”

      Now cut that measure in half and say you only allow half the fossil fuels to be burned. Imagine just raising the cost of gasoline to $9 a gallon (which is the figure Obama said he wanted gasoline to cost), or let’s raise it to $20 a gallon. Do you not see how that would affect the cost of everything and lower the productivity of our economy in a drastic way?

      Now I support the idea of no pollution, regardless of whether climatologists are right. What I don’t like is all the lying and false manipulation of the data that is obvious to every scientist with half a brain who has no skin in the climatology game. Furthermore, even if the data was not falsified, it is only a correlation analysis that does not establish cause and effect. And why ignore the last ten years of data as if it has nothing to say about global climate change? There are a lot of shenanigans going on, and even though the cause is good, it is a lame and corrupt way to get there.

      I wish the conversation focused on what our proper responsibility was toward not polluting the environment. Then we could all just work together toward a pollution free community.

  13. RTC

    Persona:

    You might want to whip up a fresher batch of kool-aid. We passed 400 ppm some time ago.

    Believe it or not, plants emit carbon dioxide, too, at night. They can’t survive without oxygen, and contrary to what you’d like us to believe, they don’t do better with increased concentrations of C02.

    I think you need to read up on photosynthesis and photorespiration.

    I have no kool-aid only fact.

    Did you click the link from my previous comment and read: Global Warming a Chilling Perspective?

    It will help to alleviate your ignorance.

    http://www.geocraft.com/WVFossils/ice_ages.html

  14. Also, I might add that you wouldn’t want to live during former geologic times, when the earth was less hospitable to live.

    The key is, what were CO2 levels during the period when mankind was evolving.

    Much lower, apple grower.

    …OK, they can’t all be gems

  15. Persona:

    You might want to whip up a fresher batch of kool-aid. We passed 400 ppm some time ago.

    Believe it or not, plants emit carbon dioxide, too, at night. They can’t survive without oxygen, and contrary to what you’d like us to believe, they don’t do better with increased concentrations of C02.

  16. Bob: We could easily do the same Korea has been doing for years by imposing environmental standards on goods we that allow into the country. And do the extent that American manufacturers have been shipping jobs overseas, yes, we do have some control.

    Furthermore, by entering into pacts like the Kyoto Agreement, we can then start imposing demands on other countries,.

    Jim: I am perfectly willing to accept the fact that reducing human influence on climate change is going to cost more. Junk science is what you’re eating and you’re washing it down with the kool-aid served by by an industry that wants to maintain the staus quo at all costs. There’s no further point in debating with you because your heads stuck in the sand. You should be aware that the rise in sea level’s going to flood your stretch of beach.

    I said before on another thread that stupid people die in stupid ways, and there’s not much government can do to prevent that. Denial over climate change is an exception to that rule.

    It’s amazing that this nation launched a preemptive strike to deal with a threat that didn’t exist, yet it refuses to take preemptive measures to mitigate a threat that does.

    The way forward is to unilaterally impose the standards for GHG reduction on all goods bought and sold in the US. There’s not much of a manufacturing base left to harm – it’s all over in China. But we can rely on our technological advantages for producing goods using processes that conform to environmental standards and manufacture those goods here at home more cheaply than our competitor nations.

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