Negative Interest Rates Destroying the World Economy
QUESTION: Mr. Armstrong, I think I am starting to see the light you have been shining. Negative interest rates really are completely insane. I also now see that months after you wrote about central banks were trapped, others are not just starting to entertain the idea. Is this distinct difference in your views that eventually become adopted with time because you were a hedge fund manager?
Just curious;
Bob
ANSWER: I believe the answer is rather simple. How can anyone pretend to be analysts if they have never traded? It would be like a man writing a book explaining how it feels to give birth. You cannot analyze what you have never done. It is just impossible. Those who cannot teach and those who can just do. Negative interest rates are fueling deflation. People have less income to spend so how is this beneficial? The Fed always needed 2% inflation. The father of negative interest rates is Larry Summers. He teaches or has been in government. He is not a trader and is clueless about how markets functions. I warned that this idea of negative interest rates was very dangerous.
Yes, I have warned that the central banks are trapped. Their QE policies have totally failed. They have lost all ability to manage the economy even in theory. They have bought the bonds and are unable to ever sell them. If they reverse their policy, government debt explodes, if the refuse to reverse this policy of negative interest rates they will see a massive capital flight from government to the private sector once the MAJORITY realize they are incapable of any control. They played a very dangerous game and have lost. It appears we are facing the collapse of Social Security which began August 14th, 1935 (1935.619). We will probably see the end of this program 2021.772 (October 9th, 2021), or about 89 weeks into the next business cycle.
We have government addicted to borrowing and if rates rise, then will go bust. We have debt which is unsustainable the further you move away from the United States which is the core economy. Unfunded pensions destroyed the Roman Empire. We are collapsing in the very same manner and for the very same reason.
Posted Apr 17, 2016 by Martin Armstrong
QUESTION: Mr. Armstrong, I think I am starting to see the light you have been shining. Negative interest rates really are completely insane. I also now see that months after you wrote about central banks were trapped, others are not just starting to entertain the idea. Is this distinct difference in your views that eventually become adopted with time because you were a hedge fund manager?
Just curious;
Bob
ANSWER: I believe the answer is rather simple. How can anyone pretend to be analysts if they have never traded? It would be like a man writing a book explaining how it feels to give birth. You cannot analyze what you have never done. It is just impossible. Those who cannot teach and those who can just do. Negative interest rates are fueling deflation. People have less income to spend so how is this beneficial? The Fed always needed 2% inflation. The father of negative interest rates is Larry Summers. He teaches or has been in government. He is not a trader and is clueless about how markets functions. I warned that this idea of negative interest rates was very dangerous.
Yes, I have warned that the central banks are trapped. Their QE policies have totally failed. They have lost all ability to manage the economy even in theory. They have bought the bonds and are unable to ever sell them. If they reverse their policy, government debt explodes, if the refuse to reverse this policy of negative interest rates they will see a massive capital flight from government to the private sector once the MAJORITY realize they are incapable of any control. They played a very dangerous game and have lost. It appears we are facing the collapse of Social Security which began August 14th, 1935 (1935.619). We will probably see the end of this program 2021.772 (October 9th, 2021), or about 89 weeks into the next business cycle.
We have government addicted to borrowing and if rates rise, then will go bust. We have debt which is unsustainable the further you move away from the United States which is the core economy. Unfunded pensions destroyed the Roman Empire. We are collapsing in the very same manner and for the very same reason.
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