I see Denmark's central bank reduced interest rates to minus 0.2% yesterday.

Things are starting to get tough.

So let me get this straight, I DON'T borrow any money from them and they pay me interest ?

Is that how it works ?

You deposit money with them, and they effectively deduct bank charges from it so at the end of the year you have less than you started with.

If you leave it there long enough, you will end up with as much money to fund your retirement as the average pensioner.

Oh thats just like my NatWest pension fund these last ten years then ?

Ah, that'll be why all these banks that I don't have an account with keep emailing me asking me to check my details.
They want to give me some interest on the money I haven't borrowed.

Did Dally say Denmark ... or Nigeria?

Denmark: www.nationalbanken.dk/DNUK/Press ... 216563.pdf

Denmark: www.nationalbanken.dk/DNUK/Press ... 216563.pdf

Yes this happens, its not as uncommon as you think.

You are basically paying for the convenience of 'safety', ie they won't lose as much as your alternatives to investment will. In reality it just means you are getting a very low nominal rate of interest where expected inflation is higher, so you expect that inflation will have more than eroded the value of your interest so in real terms you get less than you started with.

The UK government issued a load of bonds a week or so back with negative real interest rate which means the bond holders are paying the UK government for the privilege of lending to them. Makes a bit of a mockery of the whole 'wanting to cut borrowing' agenda.

I saw Germany had done this last week but had not realised we were able to do the same. If we can then we should take up as much of this money is available and use it to kick start the economy and to stop sacking people!

Even France and Holland have negative rates for short term bonds.

Today we issued £900m of bonds due to be redeemed in 2050 at a real interest rate of 0.11%. Thats £900m borrowed over 38 years at 0.11% interest.

Given the recent arrival of severe Child Tax Credit cuts I expect it won't be long before we see growing civil unrest spilling over into violence. I was staggered to discover I'm losing the best part of three hundred quid off our total income per month. My colleagues at work are in a similar (or worse) position. Many are living way beyond their means paying the mortgage and little else (I don't know many who aren't either living off an overdraft, credit card or both) The wife and I discussed the possibility of her packing in her part-time job but after taking advice we'd only be £10 quid better off. So she is effectively working twenty hours a week for nothing.

I mean, things were bad in the eighties. Inflation was through the roof and it was a genuine struggle to pay the mortgage and such. But you could still fill up the car at a reasonable price, water, gas and electricity were comparatively cheap and you could usually look forward to periodic (even annual) pay rises!

Considering we were the "sick man of Europe" things weren't THAT bad. Right now they might as well turn off the country's life support. Worse still - there are bigger cuts on the way.

Child and Working Tax credits are virtually non-existant and certainly not claimable at all by the vast majority of employed people this year, the cuts to that service have certainly been massive, hopefully with a minute number of claimants remaining they might be able to sort the office out in Preston now.