by John Rubino
Japan and Europe have been operating with negative interest rates for going on a year now, and this is what they have to show for it:
[…] For readers who aren’t completely clear about the GDP charts, they’re measuring the annual rate of change, so 0.4% means an economy is growing at a rate of less than ½ of 1%. This is about as close to zero as it’s possible to get without enduring actual shrinkage. Clearly the new-age policy mix of negative interest rates and massive central bank bond buying isn’t working.
Mainstream economists want to up the ante by lowering rates even further. But there are reasons to believe that not only won’t such a policy work but that it won’t be tried. For one thing, negative rates are already killing the banks. In Japan, for instance: