The ECB Talks Negative Interest Rates: Why You Should Be Scared
Today, the European Central Bank broke out the negative interest rate talk. This means the days of banks paying YOU to keep YOUR money are coming to a close. Instead, be ready to start paying the bank to hold your money. Scary thought. Regardless of who is paying whom, the bigger issue is what this says about the European economy.
Over the last year, things have been quiet in Europe. No major near collapses in Greece, Italy, Spain or Portugal. The general Wall Street assumption has been that things are getting better. However, if this is the case, why start talking about lowering interest rates into negative territory to force savers to spend their money and stimulate the economy? This is a very scary signal being sent by the ECB and does speak to some larger underlying issues.