We Have Bizarre Theory About Negative Int. Rates

This week, Bloomberg ran an article arguing negative interest rates aren't so strange—presuming you thought they were to begin with. The piece leans heavily on the “savings glut” theory, claiming the supply of savings (deposits at banks, etc.) far outstrips banks' demand for short term funding, making it totally commonplace supply-and-demand logic that rates would be negative. Not that different from commodity markets like pork bellies or wheat. Hey, depositors demand a place to put money and if banks don't need the money, they won't pay. Boom. Pure and simple. Basic Econ 101. Except.