As the economy deteriorates further Canadians are sitting on a pile of cash. Stock portfolios are holding a record $75 billion in cash.
How do you get people spending and investing again?
Well, you could try negative interest rates.
That kinda worked in the EU. Denmark has driven down their currency which has helped exports. Of course the flip side of negative rates is the risk of housing and stock bubbles.
But how would negative rates most likely affect Canadian consumers? Higher fees.
“What you might see happening is a negative interest rate masquerading as higher fees,” Milevsky said. “No bank in their right mind would tell a consumer, give us your hundred dollars and we’ll give you 95. That will never happen.”
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