r/PeterExplainsTheJoke • u/Melodic_Judge_129 • 9h ago

Meme needing explanation Petah?

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u/gicjos 6h ago

Nope, still not bad enough, that's how bad deflation is. But it does seems to be going this way

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u/ChocolateNo3010 6h ago

Would we see negative interest rates if this happpened? Among other things?

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u/BigWhiteDog 5h ago

<negative interest rates How does that work? I've heard the term but don't understand how that would work.

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u/echoshatter 5h ago

There's a penalty for hanging on to money. Banks would essentially be fined for not loaning money out, so the net result is insanely low-to-zero interest for borrowers.

The problem is, of course, if the downturn is that bad, you have to weigh having money in reserve that takes a penalty versus loaning it out and losing it all.

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u/BigWhiteDog 5h ago

Ah, ok. Thanks