Currently there is a lot of talk about negative interest rate and possibly US would be adopting that. Denmark was the first country in the world which has "successfully" applied negative interest rate. How do Danish banks make their money there?
A lot of people in finance in US say that negative interest rate would not work in US and would cause a collapse of the banking sector. Given that we are currently in one of the biggest bond bubble in history, is an alternative other than negative interest rate possible because any rise in interest rate would cause a massive debt sell off. The last time FED tried to raise the interest rate by .25% the markets dropped by 20%. So i am trying to understand if we are in trouble, because if the interest rate is increased, we are looking at a deep recession but if the interest rates go negative we are looking at stagflation. Have I understood this right?