I may not be an expert, but......

[rich_jacko]

......how exactly does taking away all profitability from it encourage lending to increase?

Or have I got this wrong, and the real plan is to persuade all those of us with savings to decide it's simply not worth having them any more and blow the whole lot on the high street?

---

In other news, I think *fingers crossed* that I might be over the worst of the lurg now. I still feel crappy; just nowhere near as crappy as I have done since Sunday. I've made it into work every day this week, but today was the first day when I actually knew as soon as I woke up that I was going to manage it.

Thank you to everyone who posted get well comments to my last entry!

Comments

[vampyrefate.livejournal.com]

You don't get negative rates.

The money supply is worked on the idea that tomorrow's money is cheaper than todays - hence if you want me to give you tomorrow's money, I charge you interest. Deflation is where tomorrow's money is worth more than todays - so you want to hide it under the floorboards and not spend it, as things will be cheaper next week.

We already have this idea in the tech markets - a brand new graphics card costs 500, a few months later its 250.

Of course, if we have general deflation then wages go down too (why should your employer pay you more when everything is getting cheaper?). Japan had it for years, and 'the man' DOES NOT KNOW how to get out of it once you're in it.