Why do you think central banks may turn their deposit rates negative?
Why, because the QEs of the central banks to stimulate economic growth is not working and will not work. The QEs are fueling bond, stock and real estate prices in the US in the hope of stimulating economic growth (coming from whom?) whilst at the same time eroding the middle class’ wealth like never before! Why? Because there is high unemployment and thus no wage increases and because the strongly reduced purchasing power (just check how expensive everything has become next to ever increasing premiums) of the middle class.
The middle class continues to lose purchasing power
Middle class incomes have shrunk 8.5% since 2000, after enjoying mostly steady growth during the previous decade. According to the US Census Bureau in 2011, the average income for the middle 60% of households stood at $53,042, down from $58,009 in 2000. If you barely have the money to pay for all your monthly bills how for heaven sake can people save and benefit from higher equity, bond and real estate prices in order to contribute to growth! It is just not going to happen hence why only the top 10% of the population, who earn ample money to pay for the cost of their primary living needs, is benefitting from the QE measures.
The surreal and the real economy
We are facing two economies: A phantom, surreal economy represented by super-inflated and unrealistic asset valuations, only supported by Monopoly (fake) money and the real economy with un-repayable debts, high unemployment, reducing productivity, a breakdown of Government and growing dissatisfaction with politicians, the imbalance of taxes raised and the way they are spent, the entitlement society and the rip-off world we are living in! At one stage these two economies have to come together, and guess which one will have the most gravity?
What is outrageous is that some banks state that in case of IOER “they would be forced to start charging depositors”
Anyway it clear the central banks are so desperate that the purpose of their QE, stimulating growth, is not working, in fact QE is now deflationary instead of inflationary because of the decreasing velocity of money, that they are even thinking of charging banks interest for their overnight deposits. As if banks suddenly are going to lend money even if don’t believe in the economic viability of doing so.