I think, perhaps, he is referring to "effective" rates. Real inflation, not the government figure, is running around 6%. So if you, for example, have borrowed at a fixed rate of say 3.75%, you can consider that you have an effective rate of about -2.25%. You'll be paying off your loan with dollars that are declining in buying power by greater than 3.75% per year. But of course you need your income to keep pace with real inflation for this to feel like much of an advantage. As we know, inflation favors those in debt at fixed rates. The loans are paid back with dollars that have less buying power than the dollars borrowed.
They always do that. Any Fed income that exceeds operating costs is transferred back to the Treasury. Usually it is around 90% of Fed income that goes back to Treasury.
Yes, I know real rates are negative and you don't need inflation of 6% for that. There was no mention of anything "real" in either the post or the link.
My partner and I had a business in Switzerland and actually operate in a negative interest rate environment. While we had a Swiss corporation because it was foreign owned (the two of us) in banking maters it was treated as an alien corporation. We needed to keep a modest amount of CH on hand for payroll and operating expenses and on those funds we paid 2% per annum as a negative rate. The Swiss had a very good reason for doing it. The could not stand any further appreciation in the currency. Exports were plunging and they needed to cool off the rampant speculation by Soros and the like. To a degree it worked but the scale of Switzerland made it easier. The UK in the 90's did not have the option as a major financial center. Zurich, contrary to poulr belief is not a major financial center.
http://www.mybudget360.com/negative...ce-sheet-part-time-us-employment-record-high/ http://finance.fortune.cnn.com/2013/01/25/alan-blinder-interest-rates/ And so on
You're confounding a great many things here. Yes, real rates have been negative for a while, as the first link mentions. On the other hand, nominal short rate (FedFunds target), which the second link talks about, is not negative and isn't going to go negative.