Negative and zero interest rate policy (NIRP and ZIRP) are becoming a new global norm. Endless printing of paper money is said to make economies stronger, while everyday individuals are seeing their savings worth less and less. These policies were traditionally viewed as last ditch, temporary measures to save economies, but are now increasingly being praised with smooth talk from central banks and policymakers as the answer to the world’s problems, paving the way for the next global downturn–possibly even a major economic meltdown.
Sticks and Stones May Break My Bones But Words Make It Less Painful
In George Orwell’s classic dystopian novel 1984, the political language called Newspeak existed “not only to provide a medium of expression for the world-view and mental habits proper to the devotees of Ingsoc [the novel’s dystopian political system], but to make all other modes of thought impossible.” Politicians today employ the same techniques.
Euphemism is designed to make unpalatable realities sound inoffensive or even pleasant. Economic terms like “quantitative easing” and “NIRP” don’t sound particularly threatening or bad. The underlying realities successfully obfuscated, however, and central bankers are able to proceed with impunity in economic activity extremely damaging to the finances of the hardworking individuals they govern.
NIRP and ZIRP
NIRP and ZIRP are acronyms for “negative interest rate policy” and “zero interest rate policy” respectively. The acronyms themselves take some of the punch away from the not-so-wonderful meanings, but the expanded terminologies are also misleading. A negative interest rate is commonly known in the real world as a “fee.” If interest is a payment one receives for lending money to another person,