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13 Comments
Is this something to crow about?
- I am sure depositors arent rejoicing at the prospect of effectively no interest at all.
- Mortgage rates might edge lower but its the margin the banks are making thats left.
- Bank profitability will surely be hit.. so less of a dividend for the Govt, ACC and NZ Super.
So... depositors lose, taxpayers lose and borrowers may see some benefit, but only if banks pass it on. Oh yea.. super glad Kiwibank is ready Steve.
House buyers may think lower rates are good news too, but the house prices will just rise to balance things out. So the servicing costs on the lower interest mortgage will be about the same, but they will also need a larger deposit, for an even more over priced house.
And? They'll have a house and the stability that comes with it. Lower interest rates are the only thing that have had any meaningful impact on housing affordability in years. I'm not sure the social costs of plummeting home ownership rates should be overlooked in arguments about this sort of thing, given that meaningful intervention that will actually lower house prices seems basically impossible - but all we hear about how hard life is for *checks notes* people with spare cash.
"Any examples...to relate" ?
Please give a single example where neg OCR has EVER WORKED ?
Kiwibank (aka govt post) is like Mr Orr just promoting what govt has told them to do.
Never worked in Europe 12 years ! Never working in Japan 20+ years !
Result death to your bond market.
Also just increases the risk for savers who have no option but to look for riskier places for their money. No one wants to have their money in the bank being lent out , with the bank making money , but the person whose money it is, not making anything, or very little, and it is losing it's value due to inflation, plus house price inflation. Especially as it is still a risk having it in a bank, as no government guarantee.
I still can't quite get moving to solar over the line.
But the prospect of negative interest rates, and growing concern about share markets keeps moving me a bit closer to sinking savings into going off grid. At least there'd be some very tangible return on capital there.
Most actively-cooled EVs have bugger all battery wear. The Leaf was a bad example because it had no cooling system and ran hot from driving and stayed hot when charging. Modern EVs (even the new Nissan) have proper cooling systems that will cool and warm the battery to the optimum point depending on what you're doing.
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