“Debt Is Good”
“Debt Is Good”
Everybodyyyy… All together nowwww…
“Debt Is Good”
“Debt Is Good”
It is not at all easy to laugh with your tongue in your cheek, or even with someone else’s tongue in your cheek. But Dmitry Orlov makes it all seem entirely possible in this beautifully rendered and timeless essay on the ‘ZIRP-NIRP Gap’.
You will enjoy it, I guarantee it. But be warned, you may accidentally bite your tongue …or whoever else’s tongue you happen to… oh, forget it.
Just read the damn thing: The Negative Interest Rate Gap
Added after publication:
Now, let’s see just how this works. I have an interest in that sort of interest, you see, not having a great deal of money of my own. I find it quite interesting.
If I were to borrow $1,000,000 at -7%pa interest, that means that the bank would be paying me $70,000 a year to hold their money, or $5,833.33 a month. I think I could live quite well on that. Bring it on. I would have to withdraw the monthly payment immediately of course in cash, or I would need to pay them a percentage back, because I would then be a depositor.
When I am ready, having accumulated enough to last me for the rest of my life, I could just give them their million dollars back. With a big thank you. Why doesn’t the world already operate like that? A much better system than we have now. Whoever dreamed that up I wonder? It must have been the twisted mind of an accountant.
Not Something Else 
I read Orlov’s post. I’d better read it again. Of course, your idea depends on whether The Powers That Be push for a cashless society (as is happening). Whose money would you be playing with then?
I’m not quite sure how to interpret your comment Bev. Maybe my attempt at mocking satire, echoing Orlov’s equally derisive take on the laughable and ludicrous situation global economics has engineered, failed to get its point across. It was he, himself used the term “Debt is good”.
There is no play money. There is no real debt (at least none that will ever be repaid). It’s all smoke and mirrors, and like he said – a house of cards. I thought his piece was brilliant and incisive. Maybe I have a warped sense of humour.
And “my idea” (I think I only expressed one idea there), which was the example of how NIRP works, with the ridiculous notion of borrowing a million dollars to obtain negative interest, was actually just a worked example of what Orlov was saying also, when he said: “But if we can borrow at, say, -5% or -7%, everything should pencil out nicely”. I think my example showed that nicely, even if it also illustrated one of those “unintended consequences” of NIRP.