Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Author of bestsellers "Life In The Financial Markets" and "The Energy World Is Flat" as well as "Escape From the Central Bank Trap". Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Frequent collaborator with CNBC, Bloomberg, CNN, Hedgeye, Epoch Times, Mises Institute, BBN Times, Wall Street Journal, El Español, A3 Media and 13TV. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE.
This is the US with our Federal Reserve and printed, fiat money.
Every time you see Nancy Pelosi, AOC, James Comey, etc.., just remember this is how they have power over you.
“. . . stocks in sectors that do not suffer from negative rates.”
What sectors are those?
“It’s time to go to the mattresses.”
One “investment” everyone should make is to stock up on every non-perishable item you use and could use for barter in a pinch.
That includes non-perishable food, clothing, furnishings, alcohol, tobacco, and firearms.
Get spare parts for any machines you have and need, even if you won’t need them for many years.
The great thing about this investment is that you take possession of it and do not have to depend on the stability of financial markets.
The less money you _need_ to spend in the future, the lower the impact inflation will have on your life.
A certain amount of savings should not be subject to market risk. About 2-6 months of spending, is what I have seen advised. If the banks go to negative interest rates, I would take money that should not be subject to market risk out of the bank in cash, and put it in a safe deposit box.
Who gets these negative rates?
Not the little guy, I assume.
Big financial institutions?
If there are negative federal interest rates, why can’t I take out a loan for a house and pay back less than I borrowed?
Some home loans available at 1.8%. For highly qualified folks.
Personally, I don’t see gold and silver as inflation protected. I remember when the price of gold was set by government and it could not be traded.
Craftsmen, warriors, and farmers are historically able to survive. They aren’t necessarily free, but even dictators need to eat
Wouldn’t the immediate and natural result be a huge huge run on the banks?
I mean who’s going to PAY for the inconvenience of having to deal with a financial institution when you can be financially ahead by storing your money at home in a safe (or coffee can, or mattress?)
Negative rates are the destruction of money, an economic aberration
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We seem to be living in an era of aberrations. An upside down world.
I’ve been expecting increasing interest rates and high inflation. Jimmy carters 2’nd term.
There ought to be a way for FR to get paid when infomercials like this are posted.
There ought to be a way for FR to get paid when infomercials like this are posted.
So does this mean there will be negative interest rates on loans, too?
Be nice to get paid to borrow money that I won’t spend anyhow.
As far as negative rates on savings, tie it up in a CD. The rates are fixed, even though they are practically zero.
Rates are low because elites in power can't afford to pay back debt to China if rates go up... Cryptocurrencies will destroy that power elites hold now.
https://tickertape.tdameritrade.com/market-news/negative-interest-rates-fed-powell-17690
from link:
Negative Rates Already Here, So How Should Investors React?
“Negative rates would likely be favorable to the real assets, like commodities and real estate, and would potentially help some Material sector stocks as well,” Cruz said. “It would not be beneficial to the Financial sector.”
“All your ‘safe-haven’ assets like Treasuries have little-to-no yield” in a negative interest rate situation, Cruz continued. “Even investment-grade corporates would have little-to-no yield. Your high-yielding credit would be pretty risky, so people would go into lower-risk equities, including traditional lower-risk stocks like Utilities and more defensive stocks like Consumer Staples.”
In reality, we have had negative rates for years.
With 0 to 1 percent return on a savings account and a 3% o more inflation rate, you are losing 2-3% per year in purchasing power.
They just want to increase the profit margin.
Inflation is a wealth transfer from the Middle Class to the Government and the Wealthy. Always has been so.
(from the article):" Negative rates are the destruction of money, an economic aberration based on the mistakes of many central banks and some of their economists who start from a wrong diagnosis:
the idea that economic agents do not take more credit or invest more because they choose to save too much and therefore saving must be penalized to stimulate the economy.
Excuse the bluntness, but it is a ludicrous idea."
"Inflation and growth are not low due to excess savings, but because of excess debt, perpetuating overcapacity with low rates
and high liquidity and zombifying the economy by subsidizing the low productivity and highly indebted sectors and penalizing high productivity with rising and confiscatory taxation."
"Historical evidence of negative rates shows that they do not help reduce debt, they incentivize it, they do not strengthen the credit capacity of families,
because the prices of non-replicable assets (real estate, etc.) skyrocket because of monetary excess,
and the lower cost of debt does not compensate for the greater risk."
ANSWER: " Protect your savings with gold, silver, inflation-linked instruments
and stocks in sectors that do not suffer from negative rates."
Comments Welcomed !
Get your money into something that appreciates.