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A message on negative interest

"There is so little demand for cash you have to pay someone to look after it for you"

By Andy Davis   April 2016

©mattbuck/wikimedia commons

The financial world is becoming steadily weirder—we’ve now reached a point where in Europe and Japan the central banks have set negative interest rates. This takes us through the looking glass: there is apparently so little demand for cash that you have to pay someone to look after it for you.

Admittedly, commercial banks are being charged only fractions of 1 per cent a year on the money they deposit with their central bank, but even so, this is a very striking state of affairs. I try…

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