WHAT WILL HAPPEN IF YOUR COUNTRY ADOPTS ZERO (OR EVEN NEGATIVE) INTEREST RATE?

image source: monexnews.com

There's a high correlation between inflation and interest rate. Let me explain you, the more people spend their money, the higher inflation goes. Increasing interest rate will be done to control inflation. All in all, people's spending power will lead to a scarcity when producers can't fulfil the demand. That's why inflation rises and so does interest rate.

We all know that investing in financial asset has a better return (and better risk of course) when the rate is high. The question is, what will happen if your country adopt zero or even negative interest rate? 

First, deflation! 

Deflation is considered as a reduction of the supply of money in an economy, and therefore a reduction of economic activity, which is often part of an intentional government plan to reduce prices (Cambridge). Deflation is bad as hell to me.

Deflation indicates a lack of economic growth. Economic growth shows us that consumer prices fall. The condition can be worse, guys. You can imagine, as a consumer, I might delay my purchase, expecting the prices fall further. I'm afraid that cheap price affects the labour market. As I said earlier, deflation means low economic growth. Low economic growth causes low production and finally affect the labour market.

Cutting interest rate?

Well, I can't say, by reducing interest rate is the best way to solve the problem. Lowering interest rate means reducing the opportunity to add my bank balance. In a country with zero or negative interest rate, I would just withdraw all my money if I were you.

In investor's point of view, clearly, low rate means low return. Investor absolutely won't buy any financial asset for low return. They tend to hold their money. As a result, government will spend more money to trigger the market's pruchasing power. It is known as quantitative easing. Quantitative easing is usually comitted to trigger productivity. With increasing productivity, there will be a hope for a country's economic to grow well.

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2015 In Review

Thank god, it is 2016! No need to chit-chat, let's get the 2015 reviewed!

surce: Telegraph.co.uk

It's too bad to know that Syrian civil war and the refugee crisis is still ongoing. It's sad to hear that they were evicted from their own homeland. Well, the Yemeni Civil War also gave contribution to the crisis. For god's sake, 2015 was a terrorist year.

The aviation world was in deep grief, too. Two airlines incident means 2015 wasn't the good year, for sure.

May peace be upon us this year. Aamiin.

January - Charlie Hebdo shooting in France. It was shocking as the shooters killed 11 people.

February - Taiwanese TransAsia GE 235 crashed in Taipei killing 43 people on board. You can watch the footage here: https://www.youtube.com/watch?v=GSbQ3TyaXvc

March - Lee Kuan Yiew, the first Prime Minister of Singapore, the true Singapore hero, died at the age of 91.

source: channelnewsasia.com

March - Germanwings Flight 9525, a low-cost carrier owned by Lufthansa, crashed in Alps French. 

The news was really shocking since I learnt that the crash was caused by the co-pilot's suicidal tendency.

April - Nepal Earthquake killed over 9000 people. The earthquake caused an avalanches on Mount Everest and devastated some UNESCO World Heritage sites.

source: ibtimes.co.uk

June - Government Debt Crisis lead Greece to bail out referendum. The only condition to describe this bailout condition is, the day when you can't withdraw your money though you have money in bulk.

September - Chile Earthquake caused 13 people died.

November - Terrorist attacked Paris which caused 130 people killed. The attacked was so horrible, it occured when France football team beat Germany 2-0.

December - The Fed finally raised the interest rate for the first time since 2008 financial crisis.

December - Massive fire broke out at Dubai Address Hotel right before new years eve.

source: reuters.com

April - 60th Asia-Africa Conference was held for five days (21-25) with 109 Asian and African countries, 16 observer countries and 25 international organizations as delegations.

June - C-130 Hercules aircraft Crashed somewhere near a residence in Medan. All people on board and 22 people on ground got killed. I can't just imagine it; I lie in my bed when suddenly an aircraft crashed my house.

June - INA's Forest Fire. For over four months the haze had polluted several countries in ASEAN, including Brunei, Indonesia (Sumatra and Kalimantan), Malaysia, Singapore, southern Thailand, and Vietnam, Cambodia and the Philippines.

December - Setya Novanto resigned as House of Representatives (DPR) speaker due to a breach

of the House Ethics Code related to Freeport scandal.

source: aws-dist.brta.in

#lovewins.... (ah, forget it!)

SPORT

FIFA Corruption case was booming in 2015 when FBI arrested seven FIFA Officials in a hotel in Zurich. 

Chen Long won the All England Super Series after defeating Jan O Jorgensen in Men's Single while 

Carolina Marin won her first superseries in Women's Single.

Mayweather vs Pacquaio ("the Fight of the Century") at the MGM Grand Arena in Las Vegas. Mayweather won this contest.

source: en.wikipedia.org

Chelsea claimed their victory over Tottenham on Capital One Cup. Chelsea completed their 2014/2015 season after sealing Premier League title.

source: dailymail.uk

Arsenal won FA Cup after destroying Aston Villa 4-0.

Community Shield: Arsenal 1-0 Chelsea. In this match, Petr Cech made his competitive debut.

Bayern Munich won 2014/2015 Bundesliga

Wolfsburg won DFB pokal for the first time after beating Borussia Dortmund.

Wolfsburg won German Super Cup on penalty shoot-out against Bayern Munich.

Barcelona won 2014/2015 La Liga, Copa Del Rey, UEFA Champions League (won 3-1 against Juventus), and Fifa Club World Cup. What he hell? What a great team!

source: sports.yahoo.com

Juventus won 2014/2015 Serie A & Coppa Italia after defeating Lazio.

PSV Eindhoven won Eredivisie 2014/2015.

Chile sealed  COPA AMERICA 2015 after defeating Argentina.

source: ca2015.com

African Nation Cup: Ivory Coast won penalty shoot-out against Ghana

Asia Cup 2015 final: Australia vs South Korea. Australia won the match 2-1 and secured the title for the first time.

USA won FIFA Women's World Cup 2015 by devastating Japan 5-2.

source: globalnews.ca

International Champions Cup took place in three different countries with the result, PSG won their first title (USA venue) and Real Madrid won their third title (Australia and China venue).

SEA GAMES 2015 was held in Singapore. Thailand was the overall champions and the host successfully reached the second position (best performance).

Jorge Lorenzo won MOTO GP Series 2015 with only five points gap.

source: foxsports.com

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