Basically, Draghi’s proposal means that if the ECB decided to adopt this unorthodox measure, holders of euros will have to pay the banks to store them and will not earn any interest. Theoretically, such a measure is a last-ditch attempt to stimulate the holders of capital to spend it. Practically, negative interest rates will destroy capital formation and force the savers to look for other currencies and shun the European banking system.
Despite Draghi’s admission that the negative rates are “medium or long term” options, the fact that the ECB is ready to punish Europeans and foreign holders of euros for saving and deferring consumption is outright scary. The ECB head admitted that he is aware of the possible “unintended consequences” of negative rates, but insisted that there has been “ample internal discussion of nonstandard measures” and that the ECB “is technically ready for negative deposit rates”.
The timing of this completely mad idea happens to be during the Bilderberg meeting in England. Or is it just a coincidence??