Financial Times/Karsten Junius/12-9-2019
“[C]entral banks have underestimated the political lower bound, under which public support erodes. At this point, pension funds and households might not withdraw cash from their commercial banks but rather their political support for their central bank.”
USAGOLD note: This article covers a forgotten aspect of negative yields from the saver’s point of view – eroding support for institutions that reward debt and spending over saving and frugality. Where the latter seems to be the cultural bias, the article concludes in a circular fashion, that central banks have simply failed to communicate their desire for citizens to save less and consume more. Forget the fact that considerable life savings do not get you very far in terms of income in this yield environment. A seven-figure savings account today barely draws a poverty-level income.
