by tonytran2015 (Melbourne, Australia).
People are surprised that central banks now charge them for keeping their money. They should not if they look back into the past and they should know how to live with negative interest rate.
1. Negative interest is not new
In agricultural economies, workers had been paid by fruits and food, which have expiry dates. The wisdom in those times was and still IS “use it up and don’t let it perish”.
Then came the concept of lending for an interest, for example “You can borrow my hammer for a week but at the end you should give me a box of nails”.
So, the concept of negative interest is not an upside down idea from central bankers, it only means that the people around you cannot use your capital for any worthwhile productive venture or are not prepared to share the benefit from that venture with you.
In my own observation, when people around you run out of business opportunities the (much hyped) share markets will have to come down to reconnect to reality. So negative interest rate may be a warning sign of a possible share market tumbling. (Form your own judgement, the opinion expressed here is NOT ANY FINANCIAL ADVICE).
2. Living with negative interest rates.
Our fore-parents already knew how to live with perishable goods without touching any cash. Their method is:
1. Barter one type of perishable goods for another type that perishes more slowly.
2. Use surplus perishable food to farm animals (chicken, pigs) and barter the grown animals for other non-perishable goodies.
3. If possible barter the animals and non-perishable goodies for low maintenance goodies such as gold and keep it.
It is your job to apply their ideas to your tough time in this modern economy.