The Bank of England (BoE) is exploring negative interest rates now and in response Sterling weakened sharply.

The pound dropped 0.7% against the dollar after the central bank’s plans “to explore how a negative Bank Rate could be implemented effectively, should the outlook for inflation and output warrant it at some point,” were revealed.

While the negative rates are being considered, the key interest rate at 0.1% and the QE program remained unchanged on Thursday. Petr Krpata, a currency strategist at ING said,

“There was some expectation that one or two dovish members would vote for an increase in QE, but instead the BoE surprised people by revealing that they’ve been discussing negative rates.”

The UK is currently grappling with a resurgence in virus infections and fresh social restrictions to counter them. There are also fears that unemployment could spike when the government withdraws support for wages next month. Adding to this is Prime Minister Boris Johnson’s threats to redraw his Brexit deal with the EU.

The same day, the Bank of Japan and the Federal Reserve also kept the rates unchanged at -0.1% and 0%-0.25% respectively.

This path to sub-zero rates has been already taken by some European peers and of course the BOJ, which means customers are charged for their deposits in banks.

In response to BoE contemplating negative rates, Jeff Booth, the author of the book “Price of Tomorrow,” called fiat currencies and economies “a giant Ponzi scheme.” He also said we should expect more banks to announce sub-zero rates.

Earlier this week, he had called Bitcoin “a “must” Not just for your wealth but as a lifeboat.”

Booth fired up his Twitter by explaining how central banks are exponentially adding more debt to escape the massive debt problem. Before the COVID-19 pandemic, the debt was $250 trillion on a global economy of $80 trillion, out of which $185 trillion has been added in the last 20 years only.

“The unwind in whatever form it takes is going to be brutal,” and in that case, the world has only two choices either default through hyperinflation or default though a deflationary depression and the latter one will include the collapse of the banking system, he said.

And all of it because “an economic system (is) trying to fight gravity and catching all of us in its vortex,” said Booth.

The post BoE Explores Negative Rates; Bitcoin Is A 'Must' Because Fiat is a 'Giant Ponzi Scheme' first appeared on BitcoinExchangeGuide.

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