Quote of the Day: Negative Deposit Rates Represents Savings Confiscation

“Negative deposit rates” means that the banks will charge the customer for saving money and placing it in the bank.  According to Keynesian theory (if there really is such a thing) government needs to spur “aggregate demand” in order to stimulate the economy to increased production.  Keynes had no respect for savings…only spending.  He called the consequences of savings to be a “paradox of thrift” in that if we all save instead of spend, then the economy will go into a death spiral.  He was completely ignorant of capital theory, which explains that REAL capital, not paper money capital, comes from deferring spending ON CONSUMER GOODS in order to increase spending ON CAPITAL GOODS.  The money that we save is not destroyed.  It goes into the lendable funds market to finance long term capital investment that will pay future dividends, both literally and figuratively, ensuring MORE goods in the future.

It is a mark of the fanaticism and desperation of the Keynesians that they would resort to threats of money confiscation in order to prevent people from saving and force them to spend in the present.  This is shear and utter madness…some might say it is theft on a vast scale, perpetrated by government fanatics

(all caps original)

 

This is from Professor Patrick Barron at the Mises Canada responding to the ECB’s proposal to impose negative deposit rates. The above tersely dispels the myth of the alleged virtues of spending over savings which bubble worshipers promote.

And as one would note, governments around the world have been forcing a 'reverse Robin Hood' redistribution of plundering the Main Street in favor of the Wall Streets of the world through a variety of financial repression policies such as blowing bubbles, bank deposit haircut, negative deposit rates and more…