August 30, 2009

WITH EUROPE'S POPULATION PROJECTED TO FALL BY ALMOST 200 MILLION BY 2050...:

Bankers watch as Sweden goes negative (Andrew Ward in Stockholm and David Oakley in London, August 27 2009, Financial Times)

[L]ast month, the Swedish Riksbank entered uncharted territory when it became the world’s first central bank to introduce negative interest rates on bank deposits.

Risbank graphic for MarketsEven at the deepest point of Japan’s financial crisis, the country’s central bank shied away from such a measure, which is designed to encourage commercial banks to boost lending.

But, as they contemplate their exit strategies after the extraordinary measures of the past two years, central bankers will be monitoring the Swedish experiment closely.


...how would you sustain positive rates? Such a precipitous decline in the supply of people has to drive down the demand for all sorts of stuff, no? Which means demographics will drive deflation.

Posted by Orrin Judd at August 30, 2009 7:40 AM
blog comments powered by Disqus
« BONGO BACH: | Main | IT WASN'T A REPUBLICAN THAT NUKED HIROSHIMA: »