Not one to exaggerate (?), I put this snippet before you now, to provide forensic evidence of the topic I talked about today - negative interest rates. Apparently a small Swiss bank, Alternative Bank Schweis (on the German side, I'm guessing) will be charging depositors 0.125% to hold money in a current account; anyone with CHF100,00 will be charged 0.75%. Apparently the bank funds "ethical projects", so maybe it is relying on the "ethics" (and wealth) of its customers... On the one hand, this is a non-story, who cares (apart from depositors?); however, in a few months it could become mainstream - i.e. negative interest rates could start to be the norm.
Why do I think this is worth mentioning? Well, after 6 years of 0.5% interest rates, and listening to Willem Buiter at the Royal Academy last year telling us that central banks are the "last man standing", then watching the Chancellor get creamed when he suggested cutting a mere £12 billion from a £130 billion welfare budget... I have the distinct feeling that not many options are left.
On the basis that you have exams to take, and grades to achieve, I don't recommend you explore this in detail, but anyone who faces an interview at university for a place, or just wants to be one step ahead, this is a very interesting development. It is not isolated, it is part of a creeping advance of weird monetary policy - "normal" because it just extends the idea of cutting rates, but also "weird" because the implications are really profound.
You'll have to catch me on a quiet day if you want me to explain this; otherwise just read some of the material that is decidedly non-mainstream to get a better understanding of what is coming in this supposedly "strong recovery" we are experiencing.
Blog resource for 6th Form, with contributions from teachers and students.
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