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/biz/ - Business & Finance

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15567258 No.15567258 [Reply] [Original]

Whats wrong with negative interest rate? Isnt free money to borrow money good for us plebs?

>> No.15567273
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15567273

>>15567258
Why the hell do that, when you can stake ALGO. No middle man either...

>> No.15567539

>>15567258
During recessions, you're supposed to be able to cut rates so that the lower lending costs convince people on the fence to start spending (and banks to start lending). That's supposed to make them more mild.

However with current interest rates, there's really no way they can cut any more. No one knows for sure, but beyond -0.5%/-1.5%/-2.5% banks and consumers will just store cash themselves or flee to alternatives like gold and BTC. That means the next dip in the business cycle will cause a recession with no lube.