The Truth About Negative Interest Rates
What Are They, and Why Do They Exist?
With the economy beginning to slow and the threat of a correction on the horizon, the term “negative interest rates” is being floated more and more frequently in the U.S. media. In September of 2019, President Donald Trump called on the Federal Reserve to push interest rates so far down that they’d become negative. For the average consumer, such a move would effectively incentivize spending and penalize savings because instead of paying out interest to their customers, banks would begin charging people for the service of safeguarding their money and potentially even pay them for taking out loans. In effect, the nation’s savings accounts would begin to operate like safe deposit boxes — a change of method that would encourage unwise borrowing and spending habits. Typically, central banks try to raise interest rates before a recession hits so they can ease the burden on customers during economic low points. Personally, I take that a step further by ignoring most of the newsmaking trends entirely. Financial media is junk food for your brain. It fills up space that could be used for better things and makes you sluggish when it matters. What’s worth paying attention to isn’t what’s happening today; it’s what will happen over the course of your lifetime. If you want to succeed as an investor, it’s time to commit to looking at the big picture. When you’re ready to do that, my team and I can help you build a portfolio of properties that will earn steady income for decades. Schedule an appointment today by calling 1-800-HARTMAN or visiting JasonHartman.com/ contact. ... CONTINUED FROM COVER
In this case, rates haven’t risen fast enough, and that has moved the U.S. to the edge of uncharted territory.
Negative interest rates have already taken off in countries like Japan, Sweden, Denmark, and Switzerland, where central banks are electing to use them to stimulate the economy, push up inflation, and ward off a potential recession rather than create a backup plan for one. However, in the U.S. the concept is facing pushback, in part because it’s seen as a last-ditch effort to avoid an economic downturn.
"For mortgage rates in the U.S. to go negative, something will have to go terribly wrong with the economy," Moody’s Analytics economist Ryan Sweet told NBC.
Still, for the same article, Bank of America told NBC that negative interest rates are “a possibility,” which means savvy investors should be on guard. When interest rates go negative, investors need to save more in order to earn the same income in retirement, making the concept of wealth-creation practically moot. To learn more about negative interest rates and strategies to avoid their impact, call 1-800-HARTMAN today. We’ll be happy to match you with an expert investment counselor who can help you build and retain your wealth. Are you ready to build your fortune? It’s time you invested in real estate. Visit JasonHartman.com or call 1-800-HARTMAN today to schedule a free consultation, shop properties, sign up for events, explore thousands of investor-specific resources, and learn from Platinum Properties Investor Network Founder Jason Hartman himself about how to accumulate wealth through real estate, the world’s most stable multidimensional asset class.
–Jason Hartman
JasonHartman.com
1-800-HARTMAN
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