The comments are comedy. "Really Cramer ...lol. You're like the band that kept playing when the titantic went down...lmao"
Whatyathink?.....are they starting to try and sell negative interest rates to the public? From today's SMH via Bloomberg. No mention of PM's as a alternative place to invest. https://www.smh.com.au/business/ban...orrow-money-isn-t-so-bad-20190809-p52fg0.html Negative interest rates? Getting paid to borrow money isn't so bad A Danish bank is now offering mortgage bonds with a negative interest rate. So if you're willing to buy a house on borrowed money, Danish banks will pay you for your trouble. Reaction to this state of affairs - which, after all, is beneficial to borrowers, which almost all of us are at some point - has been fierce. Negative interest rates have been called idiotic, unnatural and a tax on virtue - and that's by economists. For most other people, including many in finance and investment, they're just bewildering. But zero is just a number, and a drop in rates from 5 per cent to 2 per cent is not so different from a drop of 2 per cent to -1 per cent. In reality, this is all just old-fashioned supply and demand at work. Negative interest rates - idiotic for some, bewildering for others. Creditominic Lorrimer Worldwide, there is now some $US14 trillion ($20.6 trillion) in debt with a negative yield. In Germany, the yield curve is negative, which implies that the German government can borrow money for any length of time, from 30 days to 30 years, and actually be paid to do so. So why would anyone buy German bonds? And why doesn't the German government go on a spending spree? The second question is easy to answer: The German government is fiscally responsible to a fault and cannot even be bribed into increasing its deficit. The first question has a straightforward answer, but it is not intuitive: Savers are willing to accept negative interest rates because the German government is providing them with a valuable service that they can't find elsewhere at a better price. Where to stash the cash? Think of savers as people looking for a way to decrease their spending today so that they can increase their spending tomorrow. Those with only modest savings could simply withdraw their cash and keep it under the proverbial (or literal) mattress. This not without risk, however. They could be robbed, or their house could burn down. They could install a safe to protect them from that risk, but that would cost money. For people with more money to save, of course, keeping it in a home safe is impractical. A hundred thousand dollars in a home safe is risky. A million is courting disaster. Safely keeping $US10 million in bills is just about impossible. Drug lord Pablo Escobar's accountants reportedly assumed a 10 per cent annual loss rate on his stores of physical cash. Yet there are businesses, non-profit organisations, governments and even high-net worth individuals who need or want $US10 million - or much more - in liquid assets. Some kind of financial product is their only real option. They could turn to traditional money-market funds, but that's no guarantee either. Money-market funds reinvest their holdings in assets like government bonds, and as bond yields go down around the world, they will find it increasingly difficult to pay out their yield. To make matters worse, as yields collapse, money-market funds can (and do) go bankrupt. The German government's fiscal stability means that you can be sure it will at least pay you what it promised. That sort of guarantee is not a deal investors can get anywhere else. US government bonds still offer a positive rate of return, but if you live or do business outside of America, buying US bonds exposes you to exchange-rate risk. Pablo Escobar's accountants reportedly assumed a 10 per cent annual loss rate on his stores of physical cash. Underlying all of this is demographics. For decades there have been warnings about how declining fertility rates threaten the solvency of programs like pensions: There won't be enough taxpayers, the theory goes, to fund the payments going out. What's less well understood is that this same phenomenon applies to private capital. Savers require borrowers with sufficient stability and earning capacity to pay them back. In Japan, Europe and increasingly the US, there just aren't enough low-risk borrowers to go around. This turns expectations on their head. From the dawn of the Industrial Revolution until recently, the population of Western countries had been steadily increasing. So there was always demand for more trains, more factories, more cars, more housing, more retail to serve the expanding population. By investing prudently across a diverse set of assets, financial institutions could all but guarantee savers a net positive return. That's no longer true. Even housing has proved riskier than anyone imagined. That leaves well-established Western governments as some of the world's only remaining risk-free borrowers. Yet the ranks of savers only continue to grow. Doing the lender a favour Which brings us back to Denmark. The population of Danes aged 40 to 59 is projected to decline over the next decade. Someone who purchases a house now may have real difficulty finding a qualified buyer 10 years from now. Danish mortgage laws are notoriously stringent and designed to ensure that the borrower, not the bank, bears the risk. So in a very real sense the borrower is doing the lender a favour. She is guaranteeing the savers who fund the loan that they will get paid, in exchange for an asset whose value is not at all guaranteed. There are higher return investments available, but they don't come with steadfastness of the Danish homeowner. Negative interest rates can be unsettling, and not just for savers. But they're merely reflective of the world around us. The developed world is aging, and uncertainty - whether political, economic or technological - is rising everywhere. The supply of risk-free investments is scarce, and savers will have to be willing pay for them. Karl W. Smith is a former assistant professor of economics at the University of North Carolina's school of government and founder of the blog Modeled Behavior. Bloomberg
What kind of brainiac wrote that article. 10 million wouldn't be hard to store at all. 100 million dollars will stack on a pallet. Anyone with that much money has room for 1/10 of a pallet of cash and can afford a security system. Geez.
the problem is not the money, but there are just too many with that amount of money, they will not get the gold they wanted. just too many off them will missed out they may want to consider a group-buy/hijack on some central bank gold, just like Ukraine or Brown Bottom
Well the propaganda arm has awoken: Worldwide, there is now some $US14 trillion ($20.6 trillion) in debt with a negative yield. In Germany, the yield curve is negative, which implies that the German government can borrow money for any length of time, from 30 days to 30 years, and actually be paid to do so. So why would anyone buy German bonds? And why doesn't the German government go on a spending spree? The second question is easy to answer: The German government is fiscally responsible to a fault and cannot even be bribed into increasing its deficit. The first question has a straightforward answer, but it is not intuitive: Savers are willing to accept negative interest rates because the German government is providing them with a valuable service that they can't find elsewhere at a better price. Where to stash the cash? Think of savers as people looking for a way to decrease their spending today so that they can increase their spending tomorrow. Those with only modest savings could simply withdraw their cash and keep it under the proverbial (or literal) mattress. This not without risk, however. They could be robbed, or their house could burn down. They could install a safe to protect them from that risk, but that would cost money. For people with more money to save, of course, keeping it in a home safe is impractical. A hundred thousand dollars in a home safe is risky. A million is courting disaster. Safely keeping $US10 million in bills is just about impossible. Drug lord Pablo Escobar's accountants reportedly assumed a 10 per cent annual loss rate on his stores of physical cash. Yet there are businesses, non-profit organisations, governments and even high-net worth individuals who need or want $US10 million - or much more - in liquid assets. Some kind of financial product is their only real option. They could turn to traditional money-market funds, but that's no guarantee either. Money-market funds reinvest their holdings in assets like government bonds, and as bond yields go down around the world, they will find it increasingly difficult to pay out their yield. To make matters worse, as yields collapse, money-market funds can (and do) go bankrupt. The German government's fiscal stability means that you can be sure it will at least pay you what it promised. That sort of guarantee is not a deal investors can get anywhere else. US government bonds still offer a positive rate of return, but if you live or do business outside of America, buying US bonds exposes you to exchange-rate risk. Pablo Escobar's accountants reportedly assumed a 10 per cent annual loss rate on his stores of physical cash. Underlying all of this is demographics. For decades there have been warnings about how declining fertility rates threaten the solvency of programs like pensions: There won't be enough taxpayers, the theory goes, to fund the payments going out. What's less well understood is that this same phenomenon applies to private capital. Savers require borrowers with sufficient stability and earning capacity to pay them back. In Japan, Europe and increasingly the US, there just aren't enough low-risk borrowers to go around. This turns expectations on their head. From the dawn of the Industrial Revolution until recently, the population of Western countries had been steadily increasing. So there was always demand for more trains, more factories, more cars, more housing, more retail to serve the expanding population. By investing prudently across a diverse set of assets, financial institutions could all but guarantee savers a net positive return. That's no longer true. Even housing has proved riskier than anyone imagined. That leaves well-established Western governments as some of the world's only remaining risk-free borrowers. Yet the ranks of savers only continue to grow. Doing the lender a favour Which brings us back to Denmark. The population of Danes aged 40 to 59 is projected to decline over the next decade. Someone who purchases a house now may have real difficulty finding a qualified buyer 10 years from now. Danish mortgage laws are notoriously stringent and designed to ensure that the borrower, not the bank, bears the risk. So in a very real sense the borrower is doing the lender a favour. She is guaranteeing the savers who fund the loan that they will get paid, in exchange for an asset whose value is not at all guaranteed. There are higher return investments available, but they don't come with steadfastness of the Danish homeowner. Negative interest rates can be unsettling, and not just for savers. But they're merely reflective of the world around us. The developed world is aging, and uncertainty - whether political, economic or technological - is rising everywhere. The supply of risk-free investments is scarce, and savers will have to be willing pay for them. https://www.smh.com.au/business/ban...orrow-money-isn-t-so-bad-20190809-p52fg0.html
IMO, Negative rates rates aren't so much about enticing spending with cheap (or paid) loans in the same way low interest rates try to boost spending and help the economy. Once cash and equivalents are gone then negative rates can be used to punish people for not spending. The system as it stands with all the bubbles everywhere cannot keep going, but negative rates enforced on the average Joe will kick the can down the road again, giving a few more years to buy up more of everything. If you are paying 5% deposit interest to the bank what would you want to do?? Keep giving them your deposits or take your money out? Look at the $10k cash transaction limit being brought in and the action against Perth Bullion Co. Regardless of arguments why these are happening, the effect is limiting the use of value stores outside the system. Once the negative rates come in there'll be great news on all mainstream channels and plenty of coolaid for everyone. But not long after the whole world will be like Japan where the BOJ owns most govt debt and half the stock market. Why is the Fed the biggest landlord in the world - good investments? Well yes actually, they bought the MBS market!
Around 2010, the UK tax office suggested in a White Paper that employers could pay all wages directly to the tax office, where the tax office would deduct the taxes deemed due and pass the balance to workers. This would all happen electronically of course. The bureaucrats who author such ideas just wait for the right moment to present their papers and proposals again.
It would have been even easier in the past. The US Federal Reserve used to issue $1,000, $5,000, $10,000 and even $100,000 bills in the early 1900s. Now the highest bill is $100. The USD $1000 bill was recalled in 1969. Australia issued a 1000 pound note in the early 1900s. You could imagine what that would be worth in today's terms.
Here we go. This from Zero Hedge (where you get REAL NEWS). https://www.zerohedge.com/markets/s...ges-fed-may-announce-launch-qe-just-few-hours
If they implement negative interest rates, I will pull my money from the bank! Should interest rates dip below 0.5%, I will pull my money from the bank! Why? Because many people will pull their money when rates turn negative. So, as a preventative measure it's good to pull before! The rats leave the boat before the crew Bank runs. I can smell them. Negative interest rates vs. cash payment limitations? Madness! People will turn to barter, agriculture and THEFT in no time, if things keep going on this way.
