# Negative interest rates and the price of silver



## sideKahr (Oct 15, 2014)

Some folks have been asking how low the price of silver could fall. The Bank of Canada has just warned that they will introduce negative interest rates next year. If it spreads to the US, that would signal the bottom in precious metals prices, in my opinion.

Canada Just Warned That Negative Interest Rates Are Coming | Zero Hedge


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## LONE WOLF (Dec 12, 2014)

SideKahr are saying you think silver is about as low as its going to go?


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## sideKahr (Oct 15, 2014)

LONE WOLF said:


> SideKahr are saying you think silver is about as low as its going to go?


Yes, within about six months I believe it will turn up. One can never buy the exact bottom, of course, but this is close enough for me, and I will be buying the metal and the mines, on the dips, for the next year or so.


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## Ralph Rotten (Jun 25, 2014)

The bottom is essentially the minimum price that they can refine the metal for. However, part of the reason that silver is low right now is that the major producers of silver recently invested in new equipment that made silver mining and refining much more profitable and easy (which actually lowers the floor a little.) They can only go so low, and that is whatever they are spending to pull the stuff outta the ground.

But I think sidekahr is right, mebbe another year before it starts going back up. Buy, buy, buy. It may take a few years, but precious metals will go back up. Usually right after a warble in the stock market or the tech indistry, and people will turn to tangible investments. When they do, silver will hit $40 -$50 next peak.


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## Smitty901 (Nov 16, 2012)

When A country goes to negative rates they have serious problems. Regardless of silver prices.


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## 8301 (Nov 29, 2014)

I'm not really up to speed in "Negative Interest Rates" but if the government requires banks to keep a set percentage of deposits in cash (for emergencies) and then the government requires negative interest rates on those deposits isn't that just another form of taxation? Is the negative interest penalty imposed on the account holders funds or is the bank instead taxed separately hurting the bank's profits?


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## sideKahr (Oct 15, 2014)

The way I understand it is: the negative interest rate is imposed on the account holders, the purpose being to decrease funds held in safe bank accounts and increase investment in the stock market. As far as the reserve requirements being taxed, I don't know. If they are, I'm sure the banks will find a way to recover it. They never lose. The system is labyrinthine.


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## budgetprepp-n (Apr 7, 2013)

Ralph Rotten said:


> The bottom is essentially the minimum price that they can refine the metal for. However, part of the reason that silver is low right now is that the major producers of silver recently invested in new equipment that made silver mining and refining much more profitable and easy (which actually lowers the floor a little.) They can only go so low, and that is whatever they are spending to pull the stuff outta the ground.
> 
> But I think sidekahr is right, mebbe another year before it starts going back up. Buy, buy, buy. It may take a few years, but precious metals will go back up. Usually right after a warble in the stock market or the tech indistry, and people will turn to tangible investments. When they do, silver will hit $40 -$50 next peak.


I agree with you 100% unless TSHTF then it will soar upwards sooner.


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## budgetprepp-n (Apr 7, 2013)

Smitty901 said:


> When A country goes to negative rates they have serious problems. Regardless of silver prices.


Yes that's right and it will happen here maybe sooner than you think. Lets see if the fed raises the interest rate
that would be the first step towards negative interest rates.They would use the blow back to then lower the rate all 
the way to negative rates..


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## budgetprepp-n (Apr 7, 2013)

FoolAmI said:


> I'm not really up to speed in "Negative Interest Rates" but if the government requires banks to keep a set percentage of deposits in cash (for emergencies) and then the government requires negative interest rates on those deposits isn't that just another form of taxation? Is the negative interest penalty imposed on the account holders funds or is the bank instead taxed separately hurting the bank's profits?


This man just rang the bell,,, Someone get him a stuffed toy
Excellent way of putting it


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## hunter00 (Dec 9, 2015)

The new finance minister in the Liberal gov of Canada just mentioned that yesterday.Neg interest rates are 1 tool that's in his box to use if needed.

hunter


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## Montana Rancher (Mar 4, 2013)

Ok, for the Newbs to prepping, silver and gold are not a prep.

It is a chance to save excess wealth into the future, and IMO I am saving it or my children.

It is not a "stock" that you can buy today and sell tomorrow, it is a parachute for future generations.

So here is the caviat,

It if does apply to this generation and this monetary system, I am the next world bank!


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## cdell (Feb 27, 2014)

It's amazing how when the conservatives were in power the budget got balanced and we even had a surplus. The liberals get in and they have admitted one month in that they are gonna blow past their $10 billion projected deficeit and we are talking possible negative interest rates as a "tool in th toolbox".


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## Montana Rancher (Mar 4, 2013)

cdell said:


> It's amazing how when the conservatives were in power the budget got balanced and we even had a surplus. The liberals get in and they have admitted one month in that they are gonna blow past their $10 billion projected deficeit and we are talking possible negative interest rates as a "tool in th toolbox".


Sorry to burst you bubble but the excessive government spending started under Ronald Regan, His tax policy reduced the taxable income but also closed loop holes and the result was at least a doubling of tax revenues (theft) from the american people. Taking your argument forward, the country actually had a budget surplus when Clinton was in office according to the CBO.

Of course every presidency has the control over the statistics and it wasn't really true although more true for Clinton than for Bush not because Clinton actually did anything but because of the DOT.COM bubble.


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## 8301 (Nov 29, 2014)

sideKahr said:


> The way I understand it is: the negative interest rate is imposed on the account holders, the purpose being to decrease funds held in safe bank accounts and increase investment in the stock market. As far as the reserve requirements being taxed, I don't know. If they are, I'm sure the banks will find a way to recover it. They never lose. The system is labyrinthine.


A little additional research shows that governments impose negative interest rates in an effort force the banks to make more loans reducing the funds they have on hand. This is in an effort to make borrowing easier to help raise the velocity of money. In countries that have tried negative interest rates (Denmark and Sweden) the results have been mixed but generally poor.

And in the long term the banks may be pushed to making higher risk loans and we all know what happens when the banks get into high risk loans.

Still, since banks are required to keep a set percentage in cash (limited in what they can loan out) then they are being taxed on these funds they can't loan out by law. Pretty messed up situation.


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## Denton (Sep 18, 2012)

The negative interest rates will be imposed by the Fed, and not the government. The Fed is a private bank.

Then again, who drives the train. As most of us know, it isn't the citizenry who drives it.


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## 8301 (Nov 29, 2014)

A good article on negative interest rates.
Less Than Zero - Bloomberg QuickTake


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## 7052 (Jul 1, 2014)

Montana Rancher said:


> Ok, for the Newbs to prepping, silver and gold are not a prep.


I disagree. The silver I have purchased *IS* a prep. It is purchased with the hope of using it for currency/trade after SHTF and a reasonable enough time has past that trading posts start being set-up again.

If that never happens, *then* it becomes a parachute.


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## paraquack (Mar 1, 2013)

So "negative interest rate", does that mean the banks will pay *me* to take their money?


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## azrancher (Dec 14, 2014)

paraquack said:


> So "negative interest rate", does that mean the banks will pay *me* to take their money?


No that means they will take your money to make room for next generation of fake Federal Reserve notes...

*Rancher*


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## budgetprepp-n (Apr 7, 2013)

Egyas said:


> I disagree. The silver I have purchased *IS* a prep. It is purchased with the hope of using it for currency/trade after SHTF and a reasonable enough time has past that trading posts start being set-up again.
> 
> If that never happens, *then* it becomes a parachute.


I have spent a long time putting stuff back just for trading (and I got a lot of stuff) And I will take silver in trade
from day one.


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## alterego (Jan 27, 2013)

Wed Nov 4, 2015 | 12:30 PM EST

Fed would consider negative rates if economy soured - Yellen
If you do some research you will find Janet Yellen has made two separate statements regarding negative interest once in early September and then again in late November.

The world economy is in major recession and they need to increase exchange velocity.

It won't be enough.


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## 8301 (Nov 29, 2014)

paraquack said:


> So "negative interest rate", does that mean the banks will pay *me* to take their money?


In the countries currently using "negative interest rate" the banks are eating the "tax" for most accounts only charging the fee on the largest accounts. 
stupid I know


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