These certainly are in interesting times.
I am completely baffled by some of the events taking place. The banker driven world certainly has gone mad. At this point, I am very thankful to be involved in cryptocurrency and have a bunch of my holding in that.
We are seeing actions taking place that are going to make crypto explode at some point. The writing is already on the wall.
I read over the weekend how Denmark is offering mortgages at a negative interest rate. That means that you owe less the more time goes by. Instead of it adding to the total, the interest rate actually subtracts from it. Take out $200K and pay back $190K (fees excluded).
This is what is making sense to people these days.
The IMF even issued a paper how negative interest rates are a valid approach to prevent recession on a temporary basis. Quantitative Easing was suppose to be the same way and here we are, ten years later.
This is being taken to heart in many countries in Europe. They are now offering negative interest rates on their bonds. Of course, this is something that the United States loves since the rates were pushed down of late in ways the Fed never imagined.
A 10 year note is now paying 1.6%. This seems awful until you consider the German 10 year is at -.5%. Sweden and Switzerland are both negative.
Compared to these, 1.6% seems like a windfall return.
The problem is we are operating in a world where cash is being phased out. Low interest rates destroys savers. This is why retirees around the world are getting hammered. The idea was to save for retirement and live on the return on the principle accumulated. When that is next to nothing, a lot of pain sets in.
Economies around the world are set on perpetual growth. This is what happens when corporatocracy takes over. Nothing else matters but growth and the bottom line. The banking industry is going to do all it can to keep this going.
Countries where there is little cash have the opportunity to force spending. This is done by making saving very unattractive. Here is where we see the negative interest rates come in. Open up an account and put in $200. Leave it there a year, go back, and find you have $196.
Without an alternative, what is one going to do? Where is one going to park some money to keep it safe?
This is a world we are living in. Depending upon the country, there is a good chance most asset classes, due to cheap debt, are overheated. They are bubbles waiting to burst. Hence, this might not be the safest place for people.
I am not a gold bug simply because the history of that shows there are long stretches where it does nothing. That said, we are at a good time for that since a hedge is needed and it serves as that. I understand, with all that is taking place, why gold is starting to run. If the nutinesss keeps up, I would expect it to continue.
At the same time, I expect cryptocurrency will be aided by all of this. While there are still only a small number of people involved, proportionately speaking, it also serves as a hedge. The value is derived from something other than a nationalistic tie that is a mirage anyway. People are going to lose faith in fiat as confidence in governments collapses.
Overall, it appears the answer from the establishment to any problem is debt. Need to keep an economy growing, issue more debt. A recession on the horizon and what to avoid it, throw out more debt. In a recession and need to turn it around, you guessed it, more debt.
Cryptocurrency's greatest ally might be the broken and, often, corrupt system we are operating under. Here in the United States, we have a front row seat since this is a country firmly under the bankers control. It is probably why it is lagging so far behind other parts of the world in the crypto/blockchain world.
We presently have Venezuela, China, Argentina, Iran, and Britain under heavy duress for various reasons. The confidence in many parts of the system is collapsing. Many of these areas are already turning to cryptocurrency (Bitcoin mostly).
This is very good news.
Bitcoin was created as a result of the last financial crisis. It was meant to get people away from the vulnerability of what that system became. Sadly, nothing changed and we still have the same issues as a decade ago.
Perhaps it will take another collapse but people are learning: there is another alternative to what is out there.
The nuttier the banks get, the more it has to help cryptocurrency in general.
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