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You can imagine the ad campaigns: 'We only seize five per cent a year! And on top of that you only have to give us an iPad, as well

By contrast, in the through-the-looking-glass world of negative rates lenders actually pay for the privilege of lending. Instead of banks paying us interest on any money we deposit with them — which some still do, though the rates are tiny — we would pay banks for the privilege of depositing with them. You can imagine the ad campaigns: “We only seize five per cent a year! And on top of that you only have to give us an iPad, as well.”

If you’ve got no other choices for safeguarding your money, then maybe you swallow hard and take the minus five per cent. Cash would be a better deal, so long as inflation was less than five per cent. But if you’ve got a lot of cash, you might be nervous about keeping it on hand. So even if your deposit did evaporate at five per cent a year, you still might consider that outcome better than hiring a Brinks truck.

And if the law requires you to keep deposits with banks — as many banks must do with their respective central banks — then you have no choice but to take the negative five per cent. Some people argue the Fed’s 2008 decision to pay positive interest on banks’ holdings — which only seems fair — helps explain why the U.S. recovery was slow post-2009: with its purchases of assets the Fed did dramatically expand the cash available for monetary and economic expansion but, with not many profitable opportunities available in a depressed economy, lots of banks figured risk-free holdings with the Fed were their best investment bet.