Swedes Are Saving More Than Ever As Negative Interest Rates Fail
This article was first published by me on Talkmarkets: http://www.talkmarkets.com/content/us-markets/swedes-are-saving-more-than-ever-as-negative-interest-rates-fail?post=85446&uid=4798 Swedes are saving more than ever in their newly created (voluntary) cashless environment. That was not supposed to be how it works. They should be saving less and spending more because the banks are charging them interest. That is the goal of negative interest rates, to force people to spend more so that inflation will bump off zero. But here is the flaw in that reasoning. The fees the banks charge retail customers are like a tax. They make the Swedes feel poorer in their accounts, not richer. So the Swedes do what I predicted. They save more to make up for the shortfall. They still don't want to hide money under the mattress, risking the loss of all of it to theft! The illogical reasoning that people will spend more when you take their money away from them must have been created by peop