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What all those nations that implemented the NIRP are unwilling to do is to face the truth, that debt is a poison that needs to be removed from the system because it is a cancer.
This negative interest rates fever is all part of the currency war. Japan's move yesterday means China will have to respond, which means more chaos internationally. This all should make our US dollar more valuable, as long as America does not follow the negative interest rate move.
If America follows the world into NIRP, choosing the currency war, then the world as we know will evaporate, currencies all melting, until, on the other side of the meltdown, will be gold backed currencies again.
Nothing creates the expectation of higher future prices like the certainty of higher future wages. You can drive inflation with the minimum wage law. Increasing wages = new unleveraged income = the opportunity to take on more debt.
And NIRP is deflation. It is un-printing money. Back in 2009 when someone explained to me what a liquidity trap was I said we were in one. I was wrong, we had a commodities bubble that could be blown. It has been blown. Is there another bubble that can be blown? I don't see one. Does anyone else see one?
Negative interest rates, The central banks are getting close to the end of what they can do. You want inflation? Drive it with wages.
It's not news, it's well known. In fact up until the FED raised rate this year, US banks are not accepting large deposits. It has to do with regulations here, too costly.
And NIRP is deflation. It is un-printing money. Back in 2009 when someone explained to me what a liquidity trap was I said we were in one. I was wrong, we had a commodities bubble that could be blown. It has been blown. Is there another bubble that can be blown? I don't see one. Does anyone else see one?
Hell, even healthcare could conceivably qualify...
So take your pick
Cars, the consumers are maxed out.
Student loans, well maybe, but... How much can they take on, we need trillions of dollars of new debt?
Housing 2.0 It is popping, or close to it.
Tech 2.0 If the Plunge protection team decides to blow a bubble there I wouldn't bet against it. On its own? Do we believe there is real growth possible somewhere?
Junk Bonds I remember them from the 1980's. Who would be stupid enough to do it again. But then there is housing bubble 2.0 for your answer. (But this time it is different.)
They may get another bubble. But I don't think so.
Yeah but there is a difference between Japan and these countries.
These are, compared to Japan, economically very small countries.
Massive inflow of investment gave them no choice.
They can't afford to pay any interest.
SNB literally warned them not to bring any money there
This is how crazy it's out there now.
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