ultra low / negative interest rates in Germany

[Lang]

QE has also increased bank deposits, not just reserves, because the Fed bought a lot of government bonds and mortgage-backed securities from pension funds and other investors.

Can you provide a reference regarding this?

Yeah. For example:

http://libertystreeteconomics.newyorkfe ... rowth.html

[economicsjunkie]

QE has also increased bank deposits, not just reserves, because the Fed bought a lot of government bonds and mortgage-backed securities from pension funds and other investors.

Can you provide a reference regarding this?

Yeah. For example:

http://libertystreeteconomics.newyorkfe ... rowth.html

Thanks!

[economicsjunkie]

QE has also increased bank deposits, not just reserves, because the Fed bought a lot of government bonds and mortgage-backed securities from pension funds and other investors.

Can you provide a reference regarding this?

Yeah. For example:

http://libertystreeteconomics.newyorkfe ... rowth.html

OK, I've read it. I'm going to literally quote your article to emphasize where it makes exactly my point:

"In this post, we show that we can attribute most, but not all, of the recent high money growth rate of M1 to low current interest rates as well as the growth in bank reserves that has resulted from the Fed’s asset purchase programs."

They explain how the increase in bank reserves may have contributed to an increase in bank deposits, but suggest the Fed's asset purchases under QE have no other direct effect than to increase bank reserves.

[Lang]

Well, yes, but there are indirect effects.

[economicsjunkie]

http://mishtalk.com/2016/02/22/safes-so ... ive-rates/

'“I am a bit worried about what will happen next,” said Kazuo Matsumoto, a customer at one of the Shimachu stores in Tokyo. While he didn’t buy a safe, the 64-year-old said he might turn some of his cash into gold and keep it inside a safe-deposit box he rents.'

Someone's got the right idea ...

[economicsjunkie]

More evidence that gold responds well to deflation:

http://mishtalk.com/2016/03/04/demand-o ... old-trust/

"One of the biggest factors behind gold’s rise has been negative rates. The Bank of Japan last month joined a growing number of central banks, including the Swiss National Bank and the European Central Bank, when it introduced negative interest rates in an effort to spur consumer spending. Sweden’s central bank said on Thursday it was moving interest rates further into negative territory, and warned it could cut again. Canadian officials are also weighing cutting borrowing costs below zero."