01/12/2016 - Unintended Consequences Of Negative Interest Rates: Receive Payment As Late As Possible To Avoid Negative Interest Rates!
A government agency in Zug Switzerland wants to be paid as late as possible to avoid having to pay negative interest rates on the payments it receives .. Mish Shedlock*: “I will gladly receive on Tuesday what you may wish to pay today. Is a fine for bill prepayment the next logical step? Think about that for a second. Rather than getting individuals and corporations to spend (the desired central bank action), negative interest rates (not yet tried at the consumer level) just might get everyone to pay their bills early. Going one step further, if lending rates are low enough, people could borrow money at negative rates and park it under their mattress or in safe deposit boxes and make money by borrowing. Please take the money! Just promise to pay me back whenever. More realistically, negative interest rates on consumer deposits will cause a run on the banks.”
