Interest rates throughout much of the world, especially in Europe and particularly Germany, have gone negative. You read that right! Lenders, instead of collecting interest on money they lend, PAY borrowers to borrow! Given that scenario, is it no wonder the world has gone bonkers borrowing money?
Let me first say there is no record in the entire world history of economics where interest rates have gone negative, until now. The distortions in our economic system are like none ever seen before!
Why would anyone lend money, only to guarantee a loss of the original capital? Well, the main lenders in this case are the banking cartels, in particular the central banks. Since they create money from nothing, it’s really not a loss to them. For the rest of the folks who want to lend money and expect a normal return on our lending, just forget it! You will not get a return! Take your money and just put it under the mattress. At least it will all still be there when you get it later!
There is no good outcome of having negative interest rates. With this situation, money is basically free. And if it is free, it has no value. Are the central banking cartels finally admitting that the dollars, euros, and yen they have been printing non-stop for nearly a decade really have no value? Are they finally telling us the truth that the paper garbage monopoly currency we all pretended was money is really worth nothing?
What Negative Interest Rates Mean To You:
If money has no value, why would you save it? Why retain something that has no value, and will actually go lower in its purchasing power?
The minute you get cash, spend it on something real, something you can touch! Preferably something that will retain value over time.
From an investment standpoint, investors will be borrowing free money in unlimited quantities to buy up real stuff like houses, buildings, corporate assets (aka: stock market), and precious metals. Anything REAL investors can obtain with this fake, free currency will be bought. When this much demand exists for that real stuff, the prices will similarly be bid higher.
We see real estate at record highs yet again, as the flood of fake worthless currency bids the prices up. We see the stock market at record valuations. And finally, we are seeing precious metals like gold and silver start to rocket in price, as gold has now exceeded $1500/oz. Personally, I am staying away from overpriced real estate, and the overpriced stock market. I view these as dangerous now!
To me, gold and silver appear to be still very underpriced, and we don’t have to borrow to buy them!
As mentioned earlier, these economic distortions are unprecedented. This has never happened in history. When the adjustment back to normal happens, it will likely be very disruptive. What we are talking about here is essentially the collapse of the US Dollar. Don’t be caught unprepared!