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38 Replies
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Contributor ○○

Re: Negattive Interest Rate Environment

Could you imagine it being cheaper to keep your money in a shoe box in your closet that in a bank account? 

Capital
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Participant ○

Re: Negattive Interest Rate Environment

Seek out alternative investments.

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Explorer ○○

Re: Negattive Interest Rate Environment

To me, the most important question is how long TIAA could honor it's guaranteed 3.00% rate on its TIAA Traditional RA account in a negative interest rate environment. That said, the mention of "negative interest rates" makes me even more grateful to be a TIAA Traditional participant. 

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Contributor ○○

Re: Negattive Interest Rate Environment

"Imagine a mortgage that pays you the interest, not the other way around." FRANKFURT, Germany (AP)

Never happen here. On paper maybe interest can turn negative, bit banks will always charge interest on loans and more than a few will not use banks with an interest charge. It is only a theoretical possibility in the USA

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Explorer ○○

Re: Negattive Interest Rate Environment

Never say never.

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Explorer ○○

Re: Negattive Interest Rate Environment

Remember reading that worldwide there are $25-$30 TRILLION Dollars of negative interest rate loans. This can not end well.

Regards,

Lamar

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Explorer ○○

Re: Negattive Interest Rate Environment

I witnessed hearing our president speaking about how he admired European nations for leading the way with negative interest ratees. He blamed our independent Federal Reserve for letting them get ahead of us. "Our credit is best; our rates should be lower than theirs."  This would be dreadful in my opinion. Negative interest rates are harmful. But our president likes them. If he is reelected and is able to get his new Fed Reserve chairman,  don't be surprised to see negative interest rates in America.

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Contributor ○○

Re: Negattive Interest Rate Environment


@youth wrote:

Seek out alternative investments.


https://www.horseproperties.net/

Capital
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Participant ○

Re: Negattive Interest Rate Environment

Negative interest rates is around the corner.

Gabe

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Valued Contributor

Re: Negattive Interest Rate Environment


@youth wrote:

Negative interest rates is around the corner.

Gabe


Not going to happen here. FOMC is unanimously against it. negative interest rates destroy banking system because bank reserves decline to dangerous levels which lower liquidity and savers wind up paying banks to hold their money. EU banks are under capitalized because of negative rates. German central bank reported that after negative rates went into effect 60% of German banks charged customers to leave money at the bank.

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Contributor ○○○

Re: Negattive Interest Rate Environment


@Retired1809 wrote:

I witnessed hearing our president speaking about how he admired European nations for leading the way with negative interest ratees. He blamed our independent Federal Reserve for letting them get ahead of us. "Our credit is best; our rates should be lower than theirs."  This would be dreadful in my opinion. Negative interest rates are harmful. But our president likes them. If he is reelected and is able to get his new Fed Reserve chairman,  don't be surprised to see negative interest rates in America.


I witnessed him saying (yesterday and today) that he wanted the Fed to lower interest rates more AND he wanted the Fed to stimulate the economy.

Today, the 30 year Treasury rate is 1.5%, the 10 year rate is 0.9%, the 5 year rate is at 0.5%, while the Fed Fund rate is 1.1%, with a target of 1.0% to 1.25%.  My guess he is looking for the Fed to target the Fund rate at 0-0.25%, as it was during the 8 years of the Obama administration.

With inflation currently running in the 2-3% range, we already have negative REAL interest rates!  I agree with Intruder that we will never have negative NOMINAL interest rates.

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Participant ○

Re: Negattive Interest Rate Environment

Well, we live in extraordinary times and anything can happen.  Yes, I believe negative is not the way to go......but as was stated by another poster..."never say never".

 

Gabe

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Participant ○○○

Re: Negattive Interest Rate Environment


@youth wrote:

Seek out alternative investments.


How about gambling or bet on horse racing? Let us go to Lexington or Louisville.

I thought TIAA is a Kamadhenu,  'miraculous "cow of plenty"' (Kamadhenu is the mother of other cattle and gives health, wealth, happiness and growth in the life). No?

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Participant ○

Re: Negattive Interest Rate Environment


@ECEPROF wrote:

@youth wrote:

Seek out alternative investments.


How about gambling or bet on horse racing? Let us go to Lexington or Louisville.

I thought TIAA is a Kamadhenu,  'miraculous "cow of plenty"' (Kamadhenu is the mother of other cattle and gives health, wealth, happiness and growth in the life). No?


Betting is a fool's game.  Ownership is what you want to strive for!

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Participant ○○○

Re: Negattive Interest Rate Environment


@youth wrote:

@ECEPROF wrote:

@youth wrote:

Seek out alternative investments.


How about gambling or bet on horse racing? Let us go to Lexington or Louisville.

I thought TIAA is a Kamadhenu,  'miraculous "cow of plenty"' (Kamadhenu is the mother of other cattle and gives health, wealth, happiness and growth in the life). No?


Betting is a fool's game.  Ownership is what you want to strive for!


I already know that one because I never went to Keenland. I have driven through that road to Versailles, KY en route to Louisville and Elizabethtown.

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Valued Contributor

Re: Negattive Interest Rate Environment

Schwab thinks that the next 3-mo T-Bill auction on Monday, March 23 may produce negative rate - that is, 3-mo T-Bill may be sold at a slight premium instead of discount from par.

YBB
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Participant ○○○

Re: Negative Interest Rate Environment


@yogibearbull wrote:

Schwab thinks that the next 3-mo T-Bill auction on Monday, March 23 may produce negative rate - that is, 3-mo T-Bill may be sold at a slight premium instead of discount from par.


shock.jpg

Vanguard shows a -0.031 indicative yield for 3 & 6 month T-Bill.

vg_tbill.JPG

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Contributor ○○○

Re: Negattive Interest Rate Environment


@yogibearbull wrote:

Schwab thinks that the next 3-mo T-Bill auction on Monday, March 23 may produce negative rate - that is, 3-mo T-Bill may be sold at a slight premium instead of discount from par.


Twill be interesting.  I'm not sure why anyone would want to buy a 3 or 6 month T-bill, sending $1008 or $1016 into the Treasury and getting a guaranteed $1000 back later this year!  Put it into a Mason jar underneath your front porch!

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Participant ○○

Re: Negattive Interest Rate Environment


@ElLobo wrote:

@yogibearbull wrote:

Schwab thinks that the next 3-mo T-Bill auction on Monday, March 23 may produce negative rate - that is, 3-mo T-Bill may be sold at a slight premium instead of discount from par.


Twill be interesting.  I'm not sure why anyone would want to buy a 3 or 6 month T-bill, sending $1008 or $1016 into the Treasury and getting a guaranteed $1000 back later this year!  Put it into a Mason jar underneath your front porch!


I agree that an individual investor with limited funds may not want it (unless selling before maturity for profit is a consideration).  When it comes to much larger investment entities, it might be relatively attractive for them since a Mason jar underneath their front porch is not an option.

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