Dear CIGAs,
It has been said “truth” is a funny concept. What is truth to one may not be to another because opinions vary from one person to another. “Truth” in this context consists of one’s opinion or point of view. By this definition truth can be altered, changed or even “made”. For example, the truth believed and espoused by MSNBC is far different than that of FOX News, both by the reporters themselves and by viewers. Real truth however cannot be “made”, massaged or opined as it is mathematical in origin and more an issue of black and white.
The global financial system has gone awry where economic truth must be masked and hidden to cover the reality. Somehow our central planners think if the people “believe” something …then it “is”. I am here to tell you, no it is not. A perfect example of something completely out of whack but melded into the new “normal” are negative interest rates throughout much of Europe. These negative interest rates are no longer for only short dated maturities. Rates are negative in some cases out past 7-10 years!
How can this be? Investors are willing to lock in a guaranteed loss for 10 years or more? Rates have been pushed negative of course because the central planners want people to spend their money rather than save it. You see, “velocity” has crashed because people have tightened their belts in a move toward austerity …something the sovereign treasuries and central banks cannot even spell. Please keep in mind whether it be euros, yen or dollars, the central banks have the ability to print as many of these currency units as they choose to. Negative interest rates guarantee less “units” returned upon maturity and give less than zero risk compensation to offset the “printing” that has already been promised. In essence, savers are PAYING for the privilege to lose “units” even when central banks are promising to do their best to reduce the value of these units. The madness of crowds I guess?
The post Can You Handle the Ugly Truth? appeared first on Silver For The People.