{"id":27812,"date":"2019-12-31T05:07:09","date_gmt":"2019-12-31T13:07:09","guid":{"rendered":"https:\/\/goldco.com\/?p=27812"},"modified":"2022-12-28T08:05:58","modified_gmt":"2022-12-28T16:05:58","slug":"negative-rates-coming-soon-bank-near","status":"publish","type":"post","link":"https:\/\/goldco.com\/negative-rates-coming-soon-bank-near\/","title":{"rendered":"Negative Rates: Coming Soon to a Bank Near You?"},"content":{"rendered":"<p>At the beginning of the year, the Federal Reserve was expected to hike interest rates at least twice. Instead, it cut rates three times. What should we expect in 2020?<\/p>\n<p>With numerous analysts and strategists warning about the likelihood of a major stock market crash in 2020, it\u2019s all but guaranteed that the Fed will have to drop rates even further than they already are. But in 2008 the Fed was stymied by the zero lower bound, unwilling to drop interest rates into negative territory.<\/p>\n<p>The Bank of Japan and the European Central Bank saw zero as a challenge rather than a boundary, and boldly pushed their negative interest rates into negative territory. Banks tried to eat the cost of those negative interest rates as long as they could, but eventually they had to pass that cost on to their depositors.<\/p>\n<p>Most banks tried to shield smaller depositors from negative interest rates, confining those negative rates to investors with more than \u20ac100,000 in deposits. But a number of German banks have begun <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2019-12-03\/german-banks-open-floodgates-to-negative-rates-for-all-savers\" target=\"_blank\" rel=\"noopener noreferrer\">charging negative rates to all of their savings account customers<\/a>. That\u2019s bound to end in disaster.<\/p>\n<p>Negative interest rates disincentivize saving, encouraging depositors to pull their money out of banks. But the more money depositors pull from banks, the weaker the bank gets. Loans have to be called in, assets have to be sold, and the bank shrinks in size. The lower negative interest rates get, the worse that situation becomes.<\/p>\n<p>While this problem is so far confined mostly to Europe, is it only a matter of time before it comes to the US too? With the Fed\u2019s balance sheet already at near record levels over $4 trillion, there isn\u2019t much headroom for the Fed to expand with more quantitative easing. Negative rates may be the only tool the Fed has left at its disposal to combat another stock market crash or financial crisis. Are you prepared for that?<\/p>\n<p>For decades ordinary Americans have treated their <a href=\"https:\/\/goldco.com\/as-safe-as-money-in-the-bank-is-it-really\/\">money in the bank as though it\u2019s absolutely safe<\/a>. But what will they do when putting money in the bank ends up actively losing them money each and every day?<\/p>\n<p>If you\u2019re worried about your savings withering away due to negative interest rates, it\u2019s time to invest in assets that can bring you a positive return. One of the best of those is gold, which holds its value against inflation better than any other asset. Over the past 20 years gold has far outperformed stock markets, and unlike money sitting in a bank, it won\u2019t lose value with negative interest rates. So if you want to protect your assets against the onslaught of negative interest rates, look to <a href=\"https:\/\/goldco.com\/gold-ira\/\" target=\"_blank\" rel=\"noopener noreferrer\">investing in gold<\/a> for the protection you need.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>At the beginning of the year, the Federal Reserve was expected to hike interest rates at least twice. Instead, it cut rates three times. What should we expect in 2020? With numerous analysts and strategists warning about the likelihood of a major stock market crash in 2020, it\u2019s all but guaranteed that the Fed will [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":32546,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[209],"tags":[],"class_list":["post-27812","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-precious-metals"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.0 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Negative Rates: Coming Soon to a Bank Near You? &#8211; Goldco<\/title>\n<meta name=\"description\" content=\"While the problem of negative rates discentivizing savings and weakening banks is limited to Europe, is it only a matter of time before it comes to the US?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/goldco.com\/negative-rates-coming-soon-bank-near\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Negative Rates: Coming Soon to a Bank Near You? &#8211; Goldco\" \/>\n<meta property=\"og:description\" content=\"While the problem of negative rates discentivizing savings and weakening banks is limited to Europe, is it only a matter of time before it comes to the US?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/goldco.com\/negative-rates-coming-soon-bank-near\/\" \/>\n<meta property=\"og:site_name\" content=\"Goldco\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/goldcopreciousmetals\" \/>\n<meta property=\"article:published_time\" content=\"2019-12-31T13:07:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-28T16:05:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/goldco.com\/wp-content\/uploads\/2020\/04\/Negative-Chart-855x570-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"855\" \/>\n\t<meta property=\"og:image:height\" content=\"570\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Paul-Martin Foss\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:description\" content=\"While the problem of negative rates discentivizing savings and weakening banks is limited to Europe, is it only a matter of time before it comes to the US?\" \/>\n<meta name=\"twitter:creator\" content=\"@GoldcoPM\" \/>\n<meta name=\"twitter:site\" content=\"@GoldcoPM\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Paul-Martin Foss\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/goldco.com\/negative-rates-coming-soon-bank-near\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/goldco.com\/negative-rates-coming-soon-bank-near\/\"},\"author\":{\"name\":\"Paul-Martin Foss\",\"@id\":\"https:\/\/goldco.com\/#\/schema\/person\/58e0d6d6a6a1f8500ce9a0d8e83c1ada\"},\"headline\":\"Negative Rates: Coming Soon to a Bank Near You?\",\"datePublished\":\"2019-12-31T13:07:09+00:00\",\"dateModified\":\"2022-12-28T16:05:58+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/goldco.com\/negative-rates-coming-soon-bank-near\/\"},\"wordCount\":465,\"publisher\":{\"@id\":\"https:\/\/goldco.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/goldco.com\/negative-rates-coming-soon-bank-near\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/goldco.com\/wp-content\/uploads\/2020\/04\/Negative-Chart-855x570-1.jpg\",\"articleSection\":[\"Precious Metals\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/goldco.com\/negative-rates-coming-soon-bank-near\/\",\"url\":\"https:\/\/goldco.com\/negative-rates-coming-soon-bank-near\/\",\"name\":\"Negative Rates: Coming Soon to a Bank Near You? 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