Comments on: What is a negative interest rate?? http://porch-dog.com/?p=1777 Intellectualism flies out the window and lands on the porch. Thu, 02 Sep 2010 21:17:42 -0400 hourly 1 http://wordpress.org/?v=3.0 By: J http://porch-dog.com/?p=1777&cpage=1#comment-2446 J Mon, 22 Jun 2009 19:05:28 +0000 http://porch-dog.com/?p=1777#comment-2446 For clarification one: In one sense, it would be theft, however, like I said, the government gets to pick what is legal tender and what is not so one 'could' argue that deleting some of your money holdings is perfectly legal. I think it would definitely be a major legal battle not to mention political suicide! (Of course I am sure many thought the same about warrant-less wire taps) I would not want to call it a "tax" because that is a transfer of funds from you to the government and that is really not what is happening, unless the government had one big bonfire! Clarification Two:Nothing keeps the citizens from doing this which is why I don't think it will never work given the openness of the economy today. All this policy would do would kill the Yen as a currency and I am not sure that would help a deflationary cycle (it is a remedy for a hyper-inflationary cycle, though). So in the end I think this is a theoretical construct created in a "lab" and can never actually exist outside a mathematical model. For clarification one: In one sense, it would be theft, however, like I said, the government gets to pick what is legal tender and what is not so one ‘could’ argue that deleting some of your money holdings is perfectly legal. I think it would definitely be a major legal battle not to mention political suicide! (Of course I am sure many thought the same about warrant-less wire taps) I would not want to call it a “tax” because that is a transfer of funds from you to the government and that is really not what is happening, unless the government had one big bonfire!

Clarification Two:Nothing keeps the citizens from doing this which is why I don’t think it will never work given the openness of the economy today. All this policy would do would kill the Yen as a currency and I am not sure that would help a deflationary cycle (it is a remedy for a hyper-inflationary cycle, though).

So in the end I think this is a theoretical construct created in a “lab” and can never actually exist outside a mathematical model.

]]> By: Big Dog http://porch-dog.com/?p=1777&cpage=1#comment-2445 Big Dog Mon, 22 Jun 2009 18:54:14 +0000 http://porch-dog.com/?p=1777#comment-2445 yikes. Thanks for answering this but now for a few clarifications. 1) Isn't deleting funds from someone's bank account just theft? (or we do we interpret it as some sort of x% flat tax?) and 2) as you implied at the end of the post, what would prevent Japanese citizens from _right now_ transferring all their money to...euros...on the chance that Japan will go cashless but before the financial markets have adjusted conversion rates (which they would do, I presume, after Japan makes the official statement that this is something they _will_ try)? yikes. Thanks for answering this but now for a few clarifications. 1) Isn’t deleting funds from someone’s bank account just theft? (or we do we interpret it as some sort of x% flat tax?) and 2) as you implied at the end of the post, what would prevent Japanese citizens from _right now_ transferring all their money to…euros…on the chance that Japan will go cashless but before the financial markets have adjusted conversion rates (which they would do, I presume, after Japan makes the official statement that this is something they _will_ try)?

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