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Negative interest rates are thinkable

It is interesting to watch how ‘way out’  ideologically suspect ideas can be introduced into public consciousness when events exhaust every other conventional option.  Willem Buiter could not be described as a Green dreamer as those of us who advocate demurrage or ‘rusting money’ as a possible option to address financial stagnation are labelled.  He is careful to qualify his writing though.  Heaven’s forbid he actually advocates these ideas because he thinks the current money system is inherently faulty!  Not all all, it’s purely for symmetry – to metaphorically adjust a tilting work of art..

“It may also help that I am not advocating permanently negative nominal or real interest rates on currency or anything else. The purpose of the exercise is to describe three ways to eliminate an asymmetry in the ability of the monetary authority’s ability to set the short-term risk-free nominal interest rate. Adoption of any of these proposals makes negative nominal interest rates possible.”

Read the full article here.  We think this topic will run and run.

Posted in Money Systems, News.

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Continuing the Discussion

  1. Money Reform Monitor – Smart Taxes Network linked to this post on February 19, 2010

    […] we think we will do the same for Money Reform. Willem Buiter broke the ice with his musings on negative interest. This new article from the Times On Line suggests that Japan is actually thinking of putting some […]