Negative interest rates are a curious contemporary phenomenon.
OK, I understand the motivation now. I was thinking in traditional (pre-2008) terms. IMO of the two factors you list, #1 is the biggest reason for the ultra-low interest rates we are seeing now. The way to fix that, IMO, is for central banks to stop pumping money into the economy via quantitative easing, etc. If there really is a global capital glut (and I suspect that there is), holders of that private money will respond to the cessation of central bank easy money policies by making that money available via interest-paying loans.
Yes, but there is also money -- cash -- that just sits in a safe-deposit box or under a mattress. Or think about gold bars.
If interest rates are allowed (by central banks) to raise to healthy positive levels, holding money under a mattress will become prohibitively expensive in terms of a lost opportunity cost. IMO the solution to the "idle money" problem is positive interest rates of the type we saw prior to the economic downturn of 2008.
Governments get addicted to very cheap money (aka ultra-low interest rates). Going back to "normal" interest rates will provoke withdrawal pains and some governments (e.g. Japan) are not in a shape to even survive that.
I posted a stupid question a couple of weeks ago and got some good feedback.
@ChristianKl suggested that I start building a model of hypercapitalism for people to play with. I have the first one ready! It isn't quite to the point where people can start submitting bots to play in the economy, but I think it shows that the idea is worth more thought.
Analysis:
http://www.hypercapital.info/news/2015/4/19/a-published-model-of-hypercapitalism
Runnable Code - fork it and mess around with it:
http://runnable.com/VTBkszswv6lIdEFR/hypercapitalism-sample-economy-for-node-js-and-hello-world
I'd love some more feedback and opinions.
A couple of other things for context:
hypercapital.info - all about hypercapitalism
Overcoming bias about our money
Information Theory and the Economy