Central Banks Have Signed Their Death Warrants

Daily Reckoning ^ | February 22, 2016 | David Stockman

[TigerLikesRooster]

Central Banks Have Signed Their Death Warrants

During the past year U.S. consumption spending for health care rose by 5%. Spending at restaurants and bars were up by 9%, while spending for gasoline and other energy products was down by 22%.

This was Mr. Market at work--millions of households reallocating their spending in response to relative price changes. It had nothing to do with a macroeconomic abstraction called "weak demand".

Actually, the medical care component of the CPI rose 3.3% last year. Housing and shelter were up by 3.2%, while gasoline prices were down by 7.3%. It all added up to a 1.34% annual change in the overall CPI index by the sheer coincidence of BLS's arbitrary weightings of the index components.

Again, it had nothing to do with the pace of total consumption expenditures or any other measurement of "aggregate demand."

/snip

Ultimately, the central bankers will go for the real thing--NIRP for real people who are trying to save a nest egg. To be sure, a pipe-smoking economist will say there's no appreciable difference between positive 30 basis points and negative 30 basis points on a CD.

But there is. And the great political inflection point will come when policy elites try to pull that stunt on real people. NIRP will be the flashing neon lights announcing that the government is confiscating the people's savings and wealth.

When they actually try to impose NIRP on their own people and not just the commercial banks, the central banks will be signing their political death warrants. That day can come none too soon.

[crusher2013]

The law of unintended consequences reigns here.

People might like not having to pay sales and other taxes. Especially if the economy is bad and many people are poor.

[TigerLikesRooster]

Yeah, that is exactly where it is heading to. People will just find the way to bypass the system entirely.

[VerySadAmerican]

How low do you think silver will go in the next few months? At what point should I buy, in your opinion.

[RockyTx]

cashless society might work in a place
like Sweden, where many people are not criminals

where I live,
my guess is that 80% of small business would disappear
without cash...
do politicians really want that?

[Hostage]

Yes, cashless is what they need for their NIRP plan = confiscate wealth.

[lucky american]

About 8 years ago.

[Candor7]

Generally silver can be annually low in the Spring ( April -May) but thats not always the case:

http://deviantinvestor.com/4330/4330/

Check out the historical and current data on , my favorite is KITCO:

http://www.kitco.com/charts/livesilver.html

My fav. store for silver purchase is this one, they ship it to your door, and you can buy bricks as well as coins:

https://www.store.firstmajestic.com/product/list/category/14

I think that silver is going to $30 an ounce or more, it is just a matter of time.

Make sure you have a place to sell your silver , I use kitco,in Montreal but they have many other offices.

[r_barton]

Since 2008, Central Banks have pumped $12.5 Trillion dollars into the world’s economy, trying to boost it. Of that, the U.S. Treasury has pumped in $4.5 Trillion dollars.

All of that and the world’s economy is still a smoking ruin.

[VerySadAmerican]

I’ve got a bunch. I’m trying to decide if it’s going to go much lower before I buy some more.

[TigerLikesRooster]

All that money did little to raise disposable income of ordinary people, which is essential for economic recovery.

We are just propping up financial markets teetering on the brink.

[GOPJ]

Thanks for the ping.

[Axenolith]

What people aught to be doing is demand that a 500 and 1000 dollar bills be created. Boo freakin hoo if the government thinks it facilitates crime, if that’s the case make penalties harsher or legalize something. The monetary system isn’t created for the convenience of our damn servants, it’s created for OUR convenience...