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IPFS News Link • Economy - Economics USA

Why the Global Economy Needs Open Blockchain Assets to Fight Negative Interest Rates

• Bitcoin Magazine

The United States seems to be doing fine in the aftermath of 2008's Great Recession. Despite technological change causing some workforce pain, the U.S. economy is doing well.

But other parts of the world are still feeling some nasty economic aftereffects. Some might say this is due to colorful central banking policies. One of these policies is negative interest rates imposed by various central banks around the world.

The idea of negative interest rate policy becoming normal is concerning, as this could set a dangerous precedent for the global economy. At the same time, it provides an opportunity for alternatives to thrive. Negative interest rates could actually influence enormous growth for cryptographically backed open blockchain assets.

Negative Interest Rate Problems

Sweden, Switzerland and Japan are among countries currently enforcing negative interest rate policies. Negative interest rates, which essentially charge savers a fee to put their money in a bank, are set to induce borrowing to stimulate a sagging economy. They are also a reason for central banks to print more cash, popularly known as quantitative easing.

Over time, negative interest rate policy results in bank holdings being worth less. Therefore, it is arguable that this is not really a solution, but a stopgap until something else comes along. Some have described this policy as medicine for a "weak patient." This refers to the concept that negative interest rates can't heal what has already been broken for too long.

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