Negative interest rates: The logical absurdity
from CFA Institute's Enterprising Investor
It is not uncommon for the word “absurd” or its derivatives to accompany discussions of negative nominal interest rates. A healthy proportion of financial opinion makers describe the phenomenon as a fundamental violation of the first principles of finance. Not that a financial background is required to conclude as much. Explaining the concept to the layperson produces a raised eyebrow and crinkled forehead: It just does not feel right.
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