“It’s a big club and you ain’t in it!”
I’m often reminded of these words, spoken by the great comedian George Carlin, when I read about the annual World Economic Forum meeting in Davos, Switzerland.
That’s where the global power elite gather to discuss the big issues of the day. The most important world leaders attend. As do the CEOs of the largest companies, leaders in the mainstream media and top academics. Central bankers attend, too, along with a wide assortment of celebrities.
Three types of meetings happen in Davos, according to the BBC:
- Public meetings, which anyone can attend.
- Closed meetings, which you can only attend by invitation.
- Secret meetings, which are unannounced. The public doesn’t know the agenda or who attends.
The biggest and most important deals take shape in these secret meetings. And this year, I think there was one secret meeting with huge historical significance.
I think world leaders decided to dramatically escalate the War on Cash, making it easier for them to impose negative interest rates.
Negative interest rates mean the lender pays the borrower for the privilege of lending him money. It’s a bizarre, upside-down concept.
Negative rates could not exist in a free market. They can only exist in an Alice in Wonderland economy created by central bankers.
Punishment Interest
Think of it as “punishment interest.”
That’s a common term in Germany for negative interest rates. I think it’s an apt description.
Punishing savers is exactly what central bankers—who are really central economic planners—would like to do. They think stinging savers with negative interest rates will encourage them to spend now. It’s effectively a tax on saving money.
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