“Stop Being So Negative”: Putting It All Together
Putting it all together
Considering:
1) governments are unable to eliminate deficits
2) global government debt is increasing exponentially
3) 0% interest rates are allowing governments to borrow more to pay off old loans and fund deficits
4) Global growth is declining despite money printing and bailouts And, we’ve saved the latest and greatest fact for last: as stunning as 0% interest rates sound, the mathematically-challenged-fantasyland called Europe has just one upped everyone by introducing NEGATIVE INTEREST RATES.
As of writing, over 25% of all bonds issued by European governments has a guaranteed negative return for investors.
Germany can borrow money for 5 years at an interest rate of NEGATIVE 0.10%. Yes, instead of Germany paying you interest when you lend them money, you have to pay them interest.
These same negative interest rate conditions exist across many of the Eurozone countries, as well as Denmark, Sweden and Switzerland.
Since the majority of the investment industry unequivocally supports world central banks, it has convinced itself that negative interest rates are actually good for the worldís economy and it will help the world along its sunny path to economic freedom.
Call us dumbstruck, dumbfounded or just plain dumb. But, our every analysis of these policy moves always brings us to the same conclusion ñ thereís a pretty big adjustment in financial markets on the horizon.
6 years ago, we were told that bailing out the banks and auto companies would save the world.
As this worked so well, we were next told that the world needed 0% interest rates. As this worked so well, we were next told we needed money printing.
As this worked so well, we were next told that Ireland, Portugal, Spain, Italy, and Greece needed a bailout.
As this worked so well, next the IMF issued a report recommending a Global Wealth Tax of 10% be applied to help governments resolve their debt problems.
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