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Interest Rates Cannot Rise - Here's Why
Submitted by Thad Beversdorf via First Rebuttal blog,
I wrote an article recently over at Voices of Liberty that lays out the very dire picture for those of us who have yet to retire. The gist of the article is that the Fed has effectively robbed the retired class of any hope for having enough of a nest egg to live off through the end of their lives if they want to retire at 65.
Some may argue well this past 10 years has just been an anomaly of low interest rates but they will come back i.e. normalize to higher levels here in the next couple years. Well let me show you why that is simply wrong.
Here is why interest rates will be perpetually low for the rest of our lives, why the inflation calculation has been changed to a dynamic formula (meaning they now change the inputs each quarter) and why those of us yet to retire are screwed.
What I have laid out here is a green line that represents our total debt as a percentage of GDP. The purple line is the historic 10 yr Treasury Note rate which we are using as a proxy for the average interest rate on total debt (AIR). And the blue line is the interest payment on our total debt as a percentage of GDP (again using the 10 yr rate as a proxy for average interest rate on total debt) let’s call it DSGDP.
Do note that total debt as a percentage of GDP (green line) recently exceeded 100%. Also note that as the green line increases the spread between the purple and blue lines gets smaller. This is really just an algebraic principle. Historically the blue line is essentially a fixed rate (within a range) and so as the green line moves up the purple line (AIR) must move down so the DSGDP stays within the fixed range. As total debt became a higher percentage of GDP the average interest rate on debt must move down toward that 2.5% line that we’ve held for 15 years. As the total debt to GDP moves above 100% we should start to see the average interest rate on total debt (the purple line) move below 2.5% in order to keep the DSGDP around the 2.5% 15 year average. As a side, I did regress these relationships and found both statistical significance and good explanatory properties.
Now even the CBO is forecasting debt to GDP to continue rising for as far as the eye can see and so there must be a negative slope on interest rates. If average interest rates on debt were to move back to let’s say the 20 yr average of 7.5% our interest payments would take up 7.5% to 10% of our GDP. And that is something we simply cannot afford. The most our average interest on total debt can move in the near term is to around 4% which would take us to the high end of the historic DSGDP range. Fortunately I suppose that would also crush what little demand is left in the economy and so there is much incentive to do so. In 5 or 10 years time total debt will be sufficiently more than GDP that even 4% will be unsustainably high.
You will see from the chart above we’ve had a fairly steady decline in interest rates since the late 1970′s about the same time that total debt began rising as a percentage of GDP. The inverse relationship between these two metrics is not coincidence, but of necessity. So you start to understand that interest rates are locked into a very low range forever or at least until total debt gets paid down, which none of us expect to ever happen. So with total debt greater than GDP and rising it’s SOL for future retirees and all other savers. Next stop will be negative interest rates which of course will need to be monetized. In chess they have a term called Zugzwang; a situation in which no matter what move you make you will be worse off than you are currently. I believe we may be in a Zugzwang now.
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It's over there, behind the screen.
I never expected to retire anyways.
My grandfather and father were carried out of work feet first, even though they could have confortably
retired.Even the myth of a retirement really wasn't true, I remember pensioners being screwed back
in the 60's and 70's via inflation.
Cutting back on work is prudent, but complete retirement tends to atrophy brain and body as I've seen firsthand. It's unfortunate that most boomers will have to work till they drop just to keep a roof over their heads.
On the bright side, there could be many temporary jobs tossing bodies on the ebola death carts. No bennies and absolutely no overtime, but a nice quiet work environment.
Yes, retirement kills many people very quickly.
I have never understood the people who need to go to work in order to have their minds and/or bodies occupied. I have so much shit to do that I barely have time to go to work. I just need the $$.
You cannot pay back debt with GDP. Only income and profits after taxes can do so. That metric is obsolete and is hidng how bad things really are.
Also the low rates today mean that projects that are less efficient in terms of return go forward, reducing our overall economic effectiveness.
We need rates to rise, and if the Fed were to take off their boot upon the throats of American savers, millions of people would decide at what rates they will invest their dollars and businesses would decide what rates they would pay to go forward with projects.
The only real losers will be governments, who will once again that there is actually a cost to their never ending spending programs, which offer no return on investment.
You cannot pay back debt at all.
All you ever do is move it between the public and private sectors. Total debt (public + private), never decreases[1]. It's an exponentially increasing curve with a .97 p value.
http://research.stlouisfed.org/fred2/series/TCMDO
[1] The *one* time that the curve did break the exponential trend you got a financial meltdown that panicked the entire world.
Wait, don't tell me, I know it, No, I got it, you are talking about.....
No, really, I got it...
You are talking about the Free Market.....
That has not been seen for decades....
I foresee a lot of homeless and hungry 70+ year olds living in fema caves if this is true. There are not enough Walmart greeter jobs for every wanna-be retiree.
Walmart can always offer 10 hours a week to 3 elderly people instead of 29 hours to one elderly person.
It'll make the employment numbers look better ;)
Skipjack - A return to border houses with rooms to rent. Don't think they'll be starving but steak and lobster won't be on the menu, at least for those not already financially secure as in $1.5M or above.
How about the return of the doss house.
Just stringa thick rope across the room ,and the peeps sleep folded over it.
Its a boarding house, as in room and board; board being a plate of food served on a wooden table. When people stretched waaaaay across the table for salt of something else it was a called a boarding house reach. Actually lobster may be on the menu in seacoast New England as lobstah is quite the bahgain these days.
I think they will be more of the flophouse variety
Your wrong. The only reason rates have stayed this low is we have been buying our own bonds with printed money. This works fine until one of 2 things happens. Either you want to buy something abroad using currency that isnt worth a damn and they say no(unfortunatley we dont manufacture shit anymore) or Someone calls your bluff and demands payment. My suggestion to the world, is the same story as ever, the first guy to cash out is the best off
disagree
interest rates have been in a 30 year downtrend
until the debt overhang dealt with (default or pay down) interest rates will be low
Endeavor to perservere
back when indians were hard to sneak up on......
A non-issue as economics is an evolving 'science', just need to adjust the formula and GDP magically doubles. It's so easy that medieval alchemists would turn green with envy.
Lies, damn lies, and statistics...
exactly....and in turn interest rate expectations would double, which is why the article is correct in it's original assumption that rates cannot rise.
eg. just add hookers and blow. incredible, no?:
Drugs and prostitution add £10bn to UK economy
www.ft.com/intl/cms/s/2/65704ba0-e730-11e3-88be-00144feabdc0.html#axzz3I...
Italy to boost GDP figures with drugs and prostitutionhttp://www.telegraph.co.uk/news/worldnews/europe/italy/10853756/Italy-to...
Glad I'm an old man and already retired.
"Fuck you", from someone on the bottom of the pyramid scheme.. And have an A1 day :)
Keep working onestep. I want my social security check on time every month. On the other hand, it doesn't matter what you do because my check is just part of the deficit. No one worked to create wealth to pay me or any of the other entitlements. The money is created out of nothing. Each time I get a gov check the money in my IRA is worth less. The money in my IRA was created out of nothing and payed to me as a reward for my efforts. I was screwed while I was still working just like you and most people are every day. You don't have to retire to join the club, we are all in it already, it's just not the club we want to be in.
With respect, but older folks won't fair well in the coming neo-con dictatorship or ponzie-collapse.
I hope you have your "gold, guns, grub, and ground" already.
An American, not US subject.
Yes, yes, yes and yes.
FW
Well then lets kill whomever created that Green Line
checkmate
Inflation Rotation: Getting Nowhere Faster
Business Card. God helps those who help themselves, and so does labor.
Question: Which individual do you choose to pull out of the rip current?
Back of an Envelope. Gather some envelopes. Draw a hysteresis loop on each. Suspend them in a manner that creates supply and return.
Question: Where is the gravitational field, magnetic field, double-sided mirror, and how is gravity adjusted?
If you look in small community newspapers, you will see critters waking up, but still incapable of accepting responsibility, because their own participation has been normalized to seek a scapegoat first, with early childhood education, superstition and propaganda.
America has been propping up European banks since its inception, addressing the symptoms of natural resource exploitation, with natural resource exploitation. The one and only change is global communication, which is rapidly becoming fascist itself.
Big city critters run away from the outcomes of their habits, returning to the small community, only to seek answers from the big city, and the system discharges, as you should expect, but that energy doesn’t disappear.
The big city cannot feed itself, and so pits small communities against each other, with BigAg. Trading surplus for a toilet paper intermediate is one thing; impoverishing your community with RE inflation is another.
America is better at exploiting nature with derivative science than any other nation in History, which is self-adjusting if you move forward.
Big city voters don’t blaze a trail to the future. They show up when all the work is done, impatient, looking for entertainment, which attracts the loan sharks who buy their votes with growing access to credit of increasing maturity, squaring the circle with diminishing returns on evacuating labor hunted accordingly.
Financial control increases with leverage, and the system chokes itself.
The more time you spend in the loop, the more your future will be controlled by the past, debating until it’s far too late, when someone has to be thrown under the bus, repeating the process. Critters with falling standards for self crave to belong, so the odd one out is obvious.
The problemsolution of a dc economy is that everything must be working to identify what is not working, when it stops working, and the monkeys are always throwing wrenches into the equipment, based upon future probability extrapolated from the past. And the apes are more than happy to inflate money on the resulting economic activity of creating artificial scarcity, until all the monkeys have bankrupted themselves.
The critters jump the safeties and blow out their own processor, because they do not understand the closed system in which they dwell, shrinking it to avoid reality beyond themselves. That is History of, by and for passive aggressives, agreeing to hide from themselves, assuming that everyone else is likewise blinded.
Everyone makes mistakes, but not everyone repeats the process expecting a different outcome. Drive up the price of gold, copper, whatever, for banksters owning all the mines, all the paper, and most of the physical, as you like. Empire always begins by cornering itself, hoping you will follow, and tl:dr does, every time, attempting to short the short.
You want to be at the implicit multiplexer hub, where you have many good options, which means that you want to be building a gate, instead of traveling in a hysteresis loop looking for the best of bad options, spending your time at an increasing purchasing power loss, buying the time of others at an arbitrage disadvantage.
You want a closet full of solutions, skill, instead of a closet full of secrets, anxiety, or be born well in a game of last to lose, in which the only secret is that everyone loses, sooner or later, one way or the other.
Labor loses the empire game every time, from beginning to end. Inflation in the global city you can have, but inflating rents in the small community is self-destructive. Allowing critters in London to manage the small community with remote control is pretty stupid, but that is empire, where nothing is an emergency and everyone is a firefighter.
Why can’t a peer pressure group, whether Church, State, University or Bank, tell you whether the furnace it is trying to control is on?
Public education doesn’t produce juvenile behavior by accident. You can only rent what appears to be a life in a wage and price control empire, which can wipe you out for non-compliance at will. Houses, cars, furniture, equipment and tools are a dime a dozen, if you see the empire for what it is.
The ‘Market’ is a rigged lottery, and only your own can throw you under the bus. Who competes to pretend to be in control of an automated machine producing debt with arbitrary technology is irrelevant. Turn the needle into a circuit, for economic mobility, and everything else will take care of itself.
So, the central banks don’t think money laundering to drive up global city real estate prices is the problem, but rather that it’s the solution, which is why they are bankrolling slumlords in small communities. The critters are always surprised to find out that their Federal Land Bank is the slumlord of slumlords. All is well; just ask Bank of England.
"Zugzwang" = punish savers, retirees, and future generations at all costs!
The banks must be saved!
Why oh why did I not take the blue pill????
:(
This may only be true if the current, status quo system doesn't collapse. All bets are off if the reset button gets hit...or some black swan event changes everything...
http://olduvai.ca
The green line should really be titled the "Percentage of GDP claimed by the banksters."
Can't wait until the blue line starts rising, rising like Godzilla from the depths.
An American, not US subject.
"Guillotine the Fed!"
Don't pension funds assume 8% returns? Guess pension funds will blow up eventually, that should be bullish for stocks.
7.5% on 15 trillion is 1.125 trillion. This is a lot more than 7.5% of the US budget
Yep. Simple really. Japan public debt/gdp topped 100% in the late 90s. Japan 10y yield broke 2% to the downside around the same time. Market forces have very little to do with gubbermint interest rates paid in countries that control/issue/borrow in their own currency.
Nah. it's BS. We will just debase the dollar, inflate the GDP via debased dollars and voila!, debt to GDP comes down and interst rates go up. Get it?!
All that is is necessary is impoverishing the people!
Problem solved. Now, where is my six-pack?
Ah, always the missing six-pack! Just buy brew by the quart bottle (VERY AMERICAN as no other country has that put up). Have a pint with a friend and you'll have managed your Ps and Qs just fine. If you brew your own you can be a revolutionary and not pay taxes to the System AND recycle bottles in a wonderfully direct manner. Maybe ZH should be a craft beer chat room. WB7 posters would make it very hip.
Nowadays they do them new fangled Growler type thingies
don't worry. all this printed money will end when a new enrgy source is unvieled that is clean cheapand easily transported causing a boom in desalination and hydroponics, everyone can sto worrying about the climate and fracking. there will be high rise buildingsgleaming in ultraclean cities throughout the world and the clean air water and abundant fresh produce will cure many diseases and make people happier healthier and more genial so crime will all but disappear and war a thing of the past, most people will just work 12-15 hrs a week and live comfortably with their families. much of agriculture will change to less land based means and the land will be converted to parks and wilderness areas for recreation with manmade lakes and resorts widely available and inexpensive. just need a new source of power. the E T's are evaluating wether we are of high enough caliber to let us use it or if we need to be removed from this planet and a new species installed. try to impress them and act nice ok.
i thought i was out there.
At least Enloe Creek's proposal is more feasible than the garbage Keynesian experiment we are currently stuck under today.
hydroponics is nearly a closed system and requires only water input to replace what's lost to evaporation after the initialset-up. You can minimise this loss by making sure sunlight does not hit your water. You don't want sunlight hitting the water and causing alge growth anyway, since the alge takes nutrients from the water which is needed by the plants
hydroponics uses much LESS water than traditional farming techniques.
I am building little hydroponics systems in my "lab" during what little down-time I have, hoping to scale up to a full acre system in a few years.
Well, you still need to supply nutrients, and the energy to run the pumps/lights, so it's not as closed as more traditional soil-based techniques, though it does use less water, as you say.
don't worry. all this printed money will end when a new enrgy source is unvieled that is clean cheapand easily transported causing a boom in desalination and hydroponics, everyone can sto worrying about the climate and fracking. there will be high rise buildingsgleaming in ultraclean cities throughout the world and the clean air water and abundant fresh produce will cure many diseases and make people happier healthier and more genial so crime will all but disappear and war a thing of the past, most people will just work 12-15 hrs a week and live comfortably with their families. much of agriculture will change to less land based means and the land will be converted to parks and wilderness areas for recreation with manmade lakes and resorts widely available and inexpensive. just need a new source of power. the E T's are evaluating wether we are of high enough caliber to let us use it or if we need to be removed from this planet and a new species installed. try to impress them and act nice ok.
i'm losing it. I thought i already said i thought i was out there
PS: "we've always been at war w East-Asia".
"You will see from the chart above we’ve had a fairly steady decline in interest rates since the late 1970?s about the same time that total debt began rising as a percentage of GDP. "
Being that interest rates to a borrower should go up as he borrows more and more, and interest rates should go up as demand for the available loan-money goes up, the above quote actually says that the fix has been in from at least the early 70s.
An American, not US subject.
"The problem with mines and minefields is that they don't care who they kill."
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”
— U.S. President Abraham Lincoln, Nov. 21, 1864
(letter to Col. William F. Elkins)
Capitalism is reaching its theoretical end as foreseen by Abraham Lincoln. Contiguous with this apotheosis is a passing to fascism/socialism/communism.
That is what is coming next, as Lenin understood.
"Fascism is capitalism in decay"
"The goal of socialism is communism."
The truth of the situation is as follows:
Capitalism is a punishment from God and is an economic system based on the worship of money in displacement of Our Lord:
Matthew 6:24
"No man can serve two masters. For either he will hate the one, and love the other: or he will sustain the one, and despise the other. You cannot serve God and mammon."
(Indeed, Hilaire Belloc argues that the advent of Capitalism was not a natural evolution that can be traced to the rise of industrialism, but more to the dissolution of monasteries in England.)
Socialism/communism are based on the worship of human power in the displacement of God the Father:
Psalms 65:7
"Who by his power ruleth for ever"
"The State is the Divine Idea as it exists on earth." - Georges Hegel.
Only when the mass of manind turn back to God, will we have happiness, stability and prosperity. Then we won't vainly look to central banks heads or utopian dictators to look after us, but God our Father:
Matthew 6:33-35
"Be not solicitous therefore, saying, What shall we eat: or what shall we drink, or wherewith shall we be clothed? For after all these things do the heathens seek. For your Father knoweth that you have need of all these things. Seek ye therefore first the kingdom of God, and his justice, and all these things shall be added unto you."
God bless all!
Google-ism?
"Thou shalt not suffer more than two quotes per post."
Lincoln knew because he worked for the corporatists and nascent banksters. He turned on them, and got his head blown off.
An American, not US subject.
And who was Lincolns Treasury Secretary?
Salmon Portland Chase
And what is he famous for?
The establishment of a national banking system and the issue of paper currency.
Oops, duplicate.
Available/Leasing: Will sub-divide and/or build to suit.
Contact whoever may still be left in the rental office, or the local bank.
The love of money is the root of all evil Saul/Paul
Sorry...
Jesus is a capitalist.
Ever read the "Parable of the Talents"?
Who is the master who condemns His wicked servant for not investing?
Oh I am more aware that God is not money. And I realize that storing treasures here is not according to His will.
But Capitalists serve a purpose. We provide. We produce. We sow and then reap. We have the FAITH and act upon it when we venture our Capital to that which is productive.
Understand that I do not place my faith in Gold and Silver. I certainly do not place my faith in Governments and thier corrupted currency.
Besides as Haggai 2:8 says, the Gold belongs to Yahweh God. I am just a caretaker, a faithful steward. I know my place.
You had best read the book instead of cherry picking it to promote an agenda.
TT,
Whatever, man. Paul, the great marketer of Christianity, did say that. But, in the end, whether Jesus was a capitalist or not really isn't relevant. Most everyone worship something more than Jesus.
I already made some inquiries for some part time employment after 65.
ISIS is going to need some land mine detectors to clean up their new neighborhood.
Easy work good pay and the separation benefits...
I might have to nap between virgins tho.
Lot of moving parts not addressed in this missive not the least reason being deficits do matter. In short one simple look at Japan and Europe shows that if all that is created is a debt regime then growth will stall and in the case of Europe and Japan they will enter an outright depression.
Also not mentioned is the "burden" of reserve currency status. The world demands dollars and will trade actual goods to get them.
Another problem not mentioned is how Wall Street is a debt machine. They finance equity abroad but not at home other than through carry trades which are designed to weaken the dollar and cause inflation.
So why is none of this happening right now? As I've said before an energy boom inside the USA is inflationary. Also the USA did get downgraded because of the Government shutdown which introduces carry in the yield curve and I think has really helped Wall Street boom here.
The other side of the coin however is a combination of falling demand due to a lack of recovery and the fact that the Federal Government subsidises many things. Nuclear power, space travel, auto production, loan production...all of this creates demand where there isn't any and has given rise to outright price collapses now.
With so much debt I find it difficult to believe that more Detroits aren't coming.
Patience.
I keep watching for municipal underfunded pension obligation news stories. They'll be popping up for the next 10 years or so.
Pretty much every city in California is in that state. What I'm watching for is actual benefit cuts happening, that'll be a sure sign the end is near.
Tax payers are the assured answer. These crooks will steal every penny to get what they want. That is how they get out of it. Bankrupt 80% of people, 19% kicked in the nuts. .999% spit on and the last percentile run everything. Fuck you CUNT Hillary
This explains why the Fed will never willingly increase interest rates, but ultimately the market will force them upwards in a major way. You can only print for so long, then at some point the people finally realize all that printing leads to inflation, at which point inflation kicks in. When inflation kicks in, interest rates automatically go up via the market itself, and from that point on Fed printing no longer works it's magic.
To hear all these people say the that rates will never rise in our lifetime and the fed will buoy this bubble indefinitely, is essentially the same mantra you hear during every bubble, that 'this time it's different'. Nope, get ready for real inflation, people, and get ready for much higher interest rates.
Except there is no "market" any more, it's all fiat now. And getting more so. Don't underestimate the power of propaganda and a command economy.
Repost, stupid maintenance mode.
Actually, the 10 Yr interest rate is about to explode upward as will the rates of other treasuries according to this EWT analysis...
http://www.globaldeflationnews.com/10-yr-treasury-index-yieldelliott-wav...
As will the dollar after a brief correction...
http://www.globaldeflationnews.com/u-s-dollar-indexelliott-wave-update-f...
If interest rates do not rise then western capitalism becomes a lot like its sharia model; where interest rates on lending are forbidden.
Imagine, not only has the West copied the Sauds in terms of Oil energy policy but also in terms of financial shenaniganning!
Next, we will all be invited to enter the harem and janisserie world of the Ottoman bureaucratic model.
When we go back to Constantinople and it becomes Istanbul !
If I remember right Lauren B sang that in "the Big Sleep" !
I agree they are not going to let interest rates rise....that means they are going to be printing much more paper money to buy all the debt...but what keeps me drinking more than I should..is why in the hell is gold and silver dropping when everyone knows that the paper money is going to the moon and then some....many trillions a year of additional paper money..did someone find a mine of trillions of tons of gold or something....that is the only reason why gold and silver should be going down....
in general and right or wrong, there are more gold being mined today than people want. gold needs to go below current levels and shut down some of these mines that are not generating any profit or income before you see gold rocket back and those who want gold should be celebrating these "low" prices.
Sorry, but you are wrong. You are making the logical, although incorrect, assumption that if the price of gold is going down it must be because supply is greater than demand (Econ 101). In a normal universe that would be the case. However, in the totally warped psycho bank/fed.gov universe in which we currently exist, the price of gold is being set in the completely manipulated Comex paper market in which there are 90X more paper gold, than real gold. Real physical gold is actually in short supply. A very detailed analysis on physical gold done by the Sprott Group, determined that there was a "shortage" of some 2,000 tons of physical gold last year (I won't go into the details here, go to their website if you want to look at results). So, what we have are parallel markets, one paper one physical, where the price of the physical is being set by the paper, resulting in the 2,000 tons physical shortfall, which had to be filled in by gold from Western central banks. This, obviously, cannot continue for much longer. The question is; how long? Or rather; how much physical gold is left in Western Central Banks? I suspect, not much.
If they sell paper gold to drive the price down, who is on the other end of the trade buying paper gold? Even if the buyer accepts that they'll never take delivery, but fiat instead, are they buyers betting the gold will go up in dollar terms?
that's easy - the same people that bought then sold and bought it again a second ago.... that made .50c on that trade and lost it back a second later - the same stupid dance.
If Western Central Banks are no longer holding gold or not much and assuming it went East as in Asian buyers then why this?
http://business.financialpost.com/2014/11/04/golds-last-pillar-of-suppor...
when will the east stop buying? when they have all the gold and you everyone for that matter that holds gold has every single ounce?
Gold had it chance to go blow by 2k and to finity but spending 2k an ounce for a door stop which most people don't even take delivery is kinda expensive which by the way was the reason it went to 1900 an ounce - by paper not through physical delivery get it right.
I hold a few ounces myself, physically - but I can't be buying something that's just gonna sit there for me while I wait for it to go to infinity so I can buy a loaf of bread - fuck that shit. I'm not that crazy like most of you are.
If Western Central Banks are no longer holding gold or not much and assuming it went East as in Asian buyers then why this?
http://business.financialpost.com/2014/11/04/golds-last-pillar-of-suppor...
when will the east stop buying? when they have all the gold and you everyone for that matter that holds gold has every single ounce?
Gold had it chance to go blow by 2k and to finity but spending 2k an ounce for a door stop which most people don't even take delivery is kinda expensive which by the way was the reason it went to 1900 an ounce - by paper not through physical delivery get it right.
I hold a few ounces myself, physically - but I can't be buying something that's just gonna sit there for me while I wait for it to go to infinity so I can buy a loaf of bread - fuck that shit. I'm not that crazy like most of you are.
If Western Central Banks are no longer holding gold or not much and assuming it went East as in Asian buyers then why this?
http://business.financialpost.com/2014/11/04/golds-last-pillar-of-suppor...
when will the east stop buying? when they have all the gold and you everyone for that matter that holds gold has every single ounce?
Gold had it chance to go blow by 2k and to finity but spending 2k an ounce for a door stop which most people don't even take delivery is kinda expensive which by the way was the reason it went to 1900 an ounce - by paper not through physical delivery get it right.
I hold a few ounces myself, physically - but I can't be buying something that's just gonna sit there for me while I wait for it to go to infinity so I can buy a loaf of bread - fuck that shit. I'm not that crazy like most of you are.
If Western Central Banks are no longer holding gold or not much and assuming it went East as in Asian buyers then why this?
http://business.financialpost.com/2014/11/04/golds-last-pillar-of-suppor...
when will the east stop buying? when they have all the gold and you everyone for that matter that holds gold has every single ounce?
Gold had it chance to go blow by 2k and to finity but spending 2k an ounce for a door stop which most people don't even take delivery is kinda expensive which by the way was the reason it went to 1900 an ounce - by paper not through physical delivery get it right.
I hold a few ounces myself, physically - but I can't be buying something that's just gonna sit there for me while I wait for it to go to infinity so I can buy a loaf of bread - fuck that shit. I'm not that crazy like most of you are.
Yes, stock up. There will be a shortage.
I would guess the only dangerous bet would be how far Ag regains its old traditional ratio of about 15:1 vs Au.
Paper "money" (currency) doesn't have to become hyper-inflationary to reduce bank debt. All the Fed has to do is "buy up" the debt being held by the banks with "credits" to the banks FED account. No new currency entering the economy, no perception of inflation, debt "adjusted" out of the system. As to government debt, same song, second verse, snce "money" provided/loaned by the FED to the Gov, doesn't necessarily enter the economy either.
Or didn't y'all know that the FED chairpersons are imbued with "powers" and a magic wand to go with them?
The various central banks can suppress PMs for much longer than we can think is realistic.
However, the fact they are stocking PMs shows they consider PMs Real Money.
I'd like to see a line for total interest paid on UST debt verses total US tax revenues... Watch as the spread narrows.
Great read. Very sobering.
This page tells you how much the U.S. Treasury paid in interest on the debt, this year and the last 25years. http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm
If the Fed were to raise Real Interest Rate by just 1%, it would double these payments.
Protect yourself... http://goo.gl/RST8ca
The only way total debt can be decreased is if the Federal Reserve Discharges the debt and issues a 1099 to the Govt, then the Govt will owe money to itself and the debt is essentially extinguished, the net effect on the economy will be a rise in interest rates, inflation in food and gas, but all that "bad stuff" will be off-set with a lower tax burden, taxes could drop 20% say across the board, and some taxes almost completely eliminated, I think thats a fair trade-off.
The Federal Reserve can solve all the economic problems of the USA, simply by writing off all outstanding debt.
The Federal Reserve loses nothing of any tangible value by doing this, and it would simply be letting the lead out of the balloon in a sustainable way.
Lets be honest about it, all this debt is just "funny money" anyway, its not "real" there is no "real" danger its simply an accounting problem , a flaw in the design of the system.
The flaw can be corrected by simply discharging all outstanding debt every 20 years or so. . .
The only reason NOT to do this is if you are the one in charge and you want to enslave a country with fraudulent loans. . . You can not have an economic recovery unless A LOT OF DEBT gets discharged, thats just the way it is, no ands-ifs-or-buts, You WILL NOT have any REAL RECOVERY until debts go poof or some kind of systemic default happens (something obviously has to give).
The best solution is and always will be to simply . . . destroy the debt itself, just erase it from all the ledgers and the problem is ACTUALLY GONE!; just rinse and repeat every decade or so... it is more than likely SUSTAINABLE to do this and almost no one gets hurt because taxes are not needed under such a system,you could wipe out all taxes and no longer collect any by simply erasing the debt every 10 ~ 20 years.
The transaction will work out as follows:
Step 1
Make it illegal to issue a tax return in which the government owes you more than 10,000$ in credits for the years of the planned reset.
Step 2
Federal Reserve extinguishes all public debt and issues all debtors a 1099 for debt forgiveness.
Step 3
Governments Debt is Extinguished, and Federal Reserve issues government a 1099 for debt forgiveness, Government offsets its previous debt with the asset (the 1099) that it owes to itself now in the form of a tax credit (in reverse).
Step 4
Government Issues Federal Reserve a "Tax Credit" for the amount discharged (with a cap of 10,000$ or w.e).
Step 5
All public debtors issued a 1099 in the mail are capped to a maximum of 10,000$ owed to the govt for the taxes on forgiven debt, for people with a net worth under 50,000$ or some fair number, the debt is structured to be payed at a tune of 200$ a month for 50 months, at which point you no longer owe anything.
Step 6
Taxes are SLASHED across the board, and perma-capped to a maximum of 20% of your income from all sources.
Step 7
Government continues to run under a deficit indefinetly funding itself with inflation at a maximum increase of spending at a rate of 3% a year.
So the govt can borrow and spend 3% more of the previous years borrowing year after year at which point debt is auto-wiped every 10 years and the system renews.
System runs forever until we can think of something better, and the people of America pay lower taxes forever, but have to deal with 3~5% inflation every year (forever) like we are dealing with already ANYWAY!
Full employment abound, champagne falling from the sky and cocaine for everyone.
Its a WIN WIN WIN LOSE , only one that losses is Federal Reserve, but we compensate them with an unlimited supply of viagra and cocaine and a free cruise to hawaii every year.
I say thats a win win win win !
sounds like a variation of the perpetual motion machine...and we all know how well those work.
What do you think Double Book Accounting is?
Whatever goes in, Comes out and Whatever Comes Out Goes in.
http://inannafilm.files.wordpress.com/2012/02/10a-ouroboros-1.jpg
The problem is instead of the money going full circle , it fills the black hole that is the coffers of the Federal Reserve never to be seen from again, causing certain death to the system on a long enough time-line.
The economy grows with the population, the money supply grows with the population (relative to govt spending).
Govt borrows money, provides a value or service to public, public gets payed to provide service to itself (funded with govt borrowing), money enters system and gets spent (trickled into economy) and allocated where people deem it needed expanding spending on NEEDED goods.
The entire point of money is to move economic energy to where the most demand is until that demand (need) is filled.
A river empties into the ocean and the ocean evaporates and creates snow on the mountains, snow which melts and empties into the river once more.
You can't have a sustainable system where all the water evaporates into outer space and everyone dies because of a drought.(what we essentially have now with fractional reserve lending)...
PS: Also I would like to add, that all debt-issued instruments will be un-affected, the only changes to the way debts are handled (from the perspective of someone who is investing in govt debt) is that there will no longer be any "long-term debt" like 30 year bonds etc.
Everything will become as simple as a "cash basis" kind of a thing, all debt will become SHORT-TERM (7 year maturity dates on instruments).
This has the added effect of keeping govt in check since its obligations will come to term SOONER rather than later, preventing debt from "ballooning" out of control.
Right now or govt acts like a crazed home owner that somehow managed to take out 100000 separate 30 year term mortgages on their house.
Imagine if instead our govt acted like a homeowner with no debt and a credit card with a 10,000 a month limit?
That would essentially be the change to the way debt is issued and I think we are better off like that.
IN TERMS OF FINANCING WARS.
Wars can be financed with "war bonds" but "war bonds" will be deemed a HIGH RISK ASSET, as if the war is "lost" the "war bonds" will essentially be non-redeemable.
All wars will be funded by a Government Owned Entity (USA WAR INC.) and "USA WAR INC." will have the ability to declare bankrupcty and its assets will be distributed to bond holders.
So say you buy 100,000$ worth of "war bonds" and we lose the war , you get an "A1-Abrams Tank" in the mail to compensate for your "loss" on the bonds.
All our problems can be solved by the creation of the proper instrument and / or legal fiction/entity.
At some point nobody loans the US Government any money; then the Fed is the only buyer [hello Japan]; and at that point anybody outside the US will refuse to take US Dollars for anything. The United States of Detroit - thanks for nothing President Goebbels.
www.traderzoo.mobi
Without perpetual debt monkeys spending in flawless cascade, the entire bullshit system goes down in flames. Not even NASA duck tape can keep it intact.
When I grew up, we were taught to save, invest and spend if you could purchase in cash.
Looks like ZIRP has royally fucked up the 2% growth model. What happens when they unleashed Ammesty illegals who don't spend?
Are you going to demand all Americans to allocated a spending percentage based on income level to contribute to GDP?
If so, you'll be dead by morning.
circular reasoning. actually a rather silly article.
I'm always skeptical about statements with absolutes like "always", "never" and "can not". Interest rates will rise when the Fed can no longer keep control.
And when interest rate swap derivatives blow up shadow banking.
The debt gone wild powers that be must be going stark raving mad, if not already with the Spain vote for exiting the Ezero comes next week I think, catolina?, the Swiss gold referendum, and silver flying off the shelves at a rate which will have a silver shortage the likes none have seen in the their lifetimes. As the death count goes up for bankster bodies hitting the pavement, global pandemics, and continued war; I'm glad I invested in body bags years ago! 100 bagger no pun intended!
We are seeing Japan failing. The US isn't that far behind.
Is their any collateral out in nuff nuff land which hasn't been re-hypothecated; leveraged to the hilt. Maybe this is all the bankstering nuts have left is to profit from death; human depopulation. Again invest in body bags!
What happens when the dollar reserve status and all those Benjamins come back to the US? Current thinking is that's the point where our deflation turns to inflation, right? So, interest rates will remain low despite raging inflation?
What did I miss?
You missed the blue colored benjamins that will replace the green ones 3/1...
More like the vaporized ashes.
Everytime mortgage rates get within eye shot of 5%....RE crumbles into dust.
That's not even counting the interest payments that would be required for all levels of debt servicing.
Enoy the ride into economic oblivion.
The FED has killed interest rates unless & until there is a kinetic revolution, and there are too many pussies and too much discord on policies for that kind of transformation any time soon.
Many commenting on ZH have the delusion/hope that there will be some dramatic change (eg loss of confidence in the dollar) that would trigger a selloff in USD & treasuries - that will NOT happen because there is NO other currency/asset that is "safer", and most are even WORSE than the USD - today the whole human world is in the toilet together! In fact, as other currencies worsen (eg yen, euro, ruble), people will flee to the seemingly safer USD & US Treasuries, reducing interest rates even further.
All those people who saved money in the hope that they could earn interest income from it to provide supplemental income in their retirement have been supremely fucked into an impoverished retirement by the FED, Congress, the Supreme Court, and Obama, ie your government. The ONLY options that you have to earn income from your savings are the stock market (highly rigged & volatile), and ever-higher-risk, ever-lower-yield junk debt.
Harder and harder economic times lie ahead, especially for the lower socio-economic & retired segments. Putting your dollars into shiny lead won't help you. Only torches, pitchforks & muskets can reverse the dismal & inevitable trend.
If everyone's in the shitter maybe we could just cancel it all out. LOL.
One very real possibility is that politicians worldwide collaborate to implement an "erase govt debt" event, to "relieve the burden on the common ordinary people", ie global bail-in.
What I have been saying. Mass bail ins and wealth taxes to pay down the debt. This would cause a massive deflationary event that could reset everything and give people a chance. Me think deflation the boogy man created by TPTB to keep the masses in line with their inflation strategy. Which is nothing more than a virtual guarantee of asset prices.
Perhaps off topic but wouldn't it be a grand time to add that spectacular 'gas tax' with prices in the US so low now and the election almost over?
Another in a long line of worthless articles published by zerohedge
Nobody forces you to read it.
Go back to HuffPo troll.
Remember the Fed is privately owned and not subject to any government control whatsoever. Suppose Rand Paul gets elected president. What's to prevent Janet Yellen from taking interest rates to 15% to precipitate a crisis and get rid of the interloper?
The bond market.
A nailgun...
Um, the Fed has alot less control than you think they do. The Fed exists in it's current state by permission of the government, not the other way around.
That whole lets not pay our bills worked out really good for Argentina didn't
I say lets mint the 5T coin unredeemable of course; flip it to the FED the bill is paid bitches let them explain that to their share holders and start a new banking system no more central banks.
Who says drugs cause brain damage???
The Fed rebates the vast majority of the interest back to the Treasury. No need for the coin. There is a standard formula between the Fed and treasury that works for both parties. Afterall, the Treasury could conduct the same activitiy, in this case "printing" money, in house. They simply outsouece the job to the Fed the way they hire contractors or agencies to perform other government functions.
I certainly get the reasons to own gold, but just like you should do your own research and background checks when Ceamer recommends a stock, you should do your own homework when a gold and silver salesperson tries to sell you their inventory.
just watch to see how far Japan gets with nirp and owning all of its debt itself
Just for fun consider the following possibility based on people and institutions beginning to doubt the current system will work for much longer.
It might soon become apparent the economic efficiency of credit is beginning to collapse and the additional money poured into the system coupled with lower rates can no longer drive the economy forward. When this happens we are at the end game.
At some point the return on loaning money is simply not worth the risk! Why do you want to loan money if most likely you will never be repaid or repaid with something that is totally worthless? When this happens the only safe place to store wealth will be in "tangible assets" and the only lenders will be those who print the money that nobody wants.
The collapse of credit can pose major problems such as what we saw when many sellers were forced to demand payment up front before shipping goods in 2008. Credit is the lubricant of commerce. After a major reset real money and real positive rates will return as economics demand. More on this subject below.
http://brucewilds.blogspot.com/2014/06/the-economic-efficiency-of-credit-can.html
Agreed, only in the case of a total reset will normal rates potentially return. Could be a while if the US continues to take the Japanese approach.
Hey that means if interest rates go up we die M'Fers.
Meh, when I retrie at 104 everything will be ok.
This is what I wrote about British interest rates in May:
Why are British interest rates still so low?
as long as you can still reverse mortgage your house, and banks sell life insurance policies you can borrow against, make a few payments and borrow against the collateral, the bank gets paid when you die. if you have an annuity you can sell it for cash. basically you pad your lifestyle so you can live decently up to the place where you won't really care how well you are living. then you either opt out, live with kids, or go into a medicare sponsored rest home. we all live way too long anyway.
The answer to this article is that if interest rates are not going to reflect saved labor that can be accessed later in life then the supply and demand model (value for labor) is dead. And if that’s the case, the American economy will override the banking establishment, taking with it it’s political errand boys.
If you can’t have a price for saved labor, then you don’t have an economy and if you don’t have an economy, then you don’t have Jews, i.e., the international bankers. They will be gone. Wherever.
This is much different than it’s ever been before. This is for all the marbles. They’ve built this citadel out of paper and they are going to try to make real people working real jobs work for it and like it. And it is perfectly clear people will not accept it.
This story is a plant.
Insightful JR
There's a shitload of rhetoric in this article and in the comments, but I'm gonna share a special secret with you financial genii. The game will continue until you (yes, you!) quit playing.
You’re right; the game will end when we quit playing. As in following:
The barber whispered to his customer as a young kid walked in the door: “This kid is the dumbest kid I’ve ever known. I’ll show you what I mean.”
Smiling, the barber says to the kid: “Ok, kid, which would you rather have today, this dollar or these two shiny quarters?””
The kid takes the quarters.
The barber chuckles, “See what I mean?”
Later, when the customer leaves the barbershop, he sees the little kid coming out of the ice cream store licking a big ice cream cone.
“Why,” asked the customer, “did you take the quarters instead of the dollar?”
“What?” the kid replied: “The day I do that, the game is over.”
How can that be, JR? Nevermind that when that story was likely first told, the quarters were silver- but that's technical and shit.
Maybe the kid in the story is Jamie Dimon, I dunno.
Maybe the barber and the kid are both perpetuating a Royal Scam without realizing it.
Maybe you and I are just too stupid to comprehend it all, but I doubt it.
Seems like the barber might have underestimated his younger and wiser young customer, to me.
What if the kid decides to become a long-haired, hippie-freak?
Well, let’s face it, acethinker, the people aren’t fooled.
The EBTers, the border crossers following Obama’s food stamp signs into the US, the H-1Bs taking away domestic jobs for lower wages, the welfare families taking in $61,320+ per year (2011) per household, all are licking their double dip ice cream cones.
Twenty-nine percent of Americans — about 47 percent of blacks and 48 percent of Hispanics — live in households receiving means-tested benefits (George Will).
But when the middle class can no longer pay and supply the bankers with value – and believe me the middle class knows the bankers are robbing Elm Street to enrich themselves on Wall - the game ends. And we all know how it ends.
The welfare class and the banker class lose.
One little difference, JR, I am not an acethinker, I am only a tinker.
I am at or less than the US median income of $28k per year, and I know why that is.
Poor people are not necessarily stupid. Some of us are poor because we don't want to be part of the so-called 'system'.
YaDig?
I share your sentiments, acetinker. It’s liberty that matters, above all. Thanks.
America must break the chains that bind her to materialism and debt and poverty. Rise up off her knees! Abolish the Fed. Seize back the blessings of her freedom and her opportunity. Reclaim her sovereignty. Prosperity can only be for the free. We must push aside those who have commandeered this nation’s greatness and outsourced her livelihood. America until this century was the patent king and producer of the world! – WE MUST SAVE THAT AMERICA! Not the one founded by the Fed and its parasitic financial oligarchs. The one that made possible Carl Sandberg’s Chicago.
“If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen.” – Samuel Adams
I have posted this before, and got zero response that I know of- Then these inspiring words: "Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces."
This was a French dude about AD 1522. We have known for a long time, what the problem is, but we haven't done shit about it. Is it time? His name was Etienne de la Boetie, btwNote: If you have a job, you're playing.
If you have fiat, you're playing.
If you saved any money, you're playing.
If you keep your money anywhere but a mattress, you're playing.
If you have any physical PM's (mined by big companies like Barrick, Newmont, FCX, etc.), you're playing.
If you buy anything, you're playing.
If you drive a car, you're playing.....
AND, if you did any of this, for your kids or otherwise, while accumulating debt, you are definitely playing.
So, since most of us here are players, why can't we call out the ones who only "trade" for their own interest, without regard for the general population?
This is the shit I'm pissed about, and since all money is created as debt, who is that debt owed to?
I think it's us. We are the collateral, after all.
You have forgotten DEFAULT. then Rates will rise, and it will beget defaults. then ctrl-shift-del, Bitchez!
Jubilee or Weimar
Ashes, ashes, we all fall down. Boom.
Who says this can't continue for another 100% of GDP? In the meantime, I'll enjoy the low interest rates and deflation and...... ehem....strong dollar.
Oh whatever. Interest rates aren't going to rise because there is no demand for loans. The economy is in a deleveraging mode, people are NOT looking to take on more debt. The few that ARE aren't gonna pay higher rates, and they know it. So market forces will keep rates from rising, and their precious inflation from appearing.
Until the idiots start printing with a vengeance to prevent the collapse of their asset prices. THEN they'll get what they wanted, and then some. And we'll have a couple years of hell before the whole thing implodes.
Dear Oh Whatever, as long as governments run deficits loan demand is strong. Signed, Oh so much smarter than you
anybody looking at the chart of TLT.
One problem with analyses like these is that they assume many of the conventions used in Central Banking are some inviolable rules. That is the reason why such analysts are surprised when their conclusions are proved wrong.
Interest rates can rise and do so without increasing the cost of financing government spending in excess of tax revenue. But that can be achieved only through unconventional means. The times of unconventional Central Banking have already started. All those claiming hyperinflation as the result of QE operations have been proved wrong. So the next time unconventional steps are taken and the usual suspects start crying "Hyperinflation!", they will be ignored.
So what are these unconventional steps that can be taken that can result in increase in interest rates without an increased cost of financing government "deficit" (government spending in excess of the revenues)? It is the High Value Platinum Coin Seigniorage advocated by Modern Monetary Theorists. What does that involve? It involves the treasury printing a platinum coin of arbitrarily large face value (say US$ 1 Trillion) and exchanging it with the Fed for equivalent dollars. The face value can be whatever the treasury chooses. It can even be US$ 100 trillion, if they so choose. Of course, they are likely to begin with a small number like US$ 1 trillion. Since they are exchanging an asset for dollars, it is not debt and the amount is not limited by any laws regarding debt. It doesn't violate the Congress' power of purse, since the money cannot be spent without Congressional authorisation. As the US treasury debt matures, it will be retired using the dollars acquired using this route and no new debt will be made. Since the US treasury won't be borrowing any money, interest rates will have no bearing on government.
The same "experts" who predicted high inflation/hyperinflation from QE will make the same predictions again. But fewer people will take them seriously today than did when the first round of QE was announced. There is nothing like being wrong so many times in a row to lose credibility.
The Flaw with what your concluding is Hyperinflation was twarted by competent counteractions witch we have now burned the options, other mesures are nessessary,
your goverment is a tyrant child now perpetualy in need of interventions from exausted parents!!
The Flaw with what your concluding is Hyperinflation was twarted by competent counteractions witch we have now burned the options, other mesures are nessessary,
your goverment is a tyrant child now perpetualy in need of interventions from exausted parents!!
Um, you do realize the Fed returns virtually all interest payments made to them by the Treasury? There is a very small net cost to the government to cover costs incurred by the Fed under a standard formula and seems to accomplish exactly what you are referring to without the need for minting some ridiculous coin. What you are describing is complete monetization, which is already being done but instead of costing interest the cost is in the inflation of asset or consumer prices. The deficits, government spending programs, the way structured have simply not been placed in the right hands to create substantial cpi inflation. Instead inflation has been in non cpi components most noteably asset prices. And just like if the price of sugar went parabolic, when assets go parabolic consumers/investors can buy less. In the case of assets.we are not getting less sugar for our dollar we are getting less interest or earnings. Thus the higher pe ratios are completely valid in a low rate environment. For many reasons some not even listed in this article, the author's conclusion is 100% correct.
The Fed holds only a small part of US Treasury debt. So all the interest paid doesn't come back to the treasury as income. Even if it did, the Congress needs to increase the debt ceiling if there is a need (the automatic stabilisers like federal unemployment allowance are not fixed costs) and there is a possibility of another drama next February when they may need to do it. The HVPCS route completely eliminates the need for the stupid legal requirement that requires the Congress to authorise borrowing for a spending it authorised when the taxes it authorised are not sufficient to cover. Congress authorises spending and taxes and any difference is printed by the Fed and exchanged for high value assets from the treasury. More importantly, this completely delinks the government from the Fed's interest rate policy and the Fed doesn't have to keep the interest rates low to keep borrowing affordable for the government.
The author is right, but only when one ignores other possibilities of financing government deficit than "debt".
Wow! you guys are getting good at this! tell me, what would you converge ahead of this curve?
I would have thought liquidity played a major part of the game.
My banks were offering good rates...to attract cash at a time when banks would't trust each other.
Of course since that time rates here have fallen a lot...but still better than other places...
Am currently getting...
3.4% 90 days cash deposit with NAB
2.90% with Westpac another
3.1% with National Bank 4 months at the time
Ranges are between 2.90% and 3.41%
Complex dynamic systems will befuddle all who think they can control them...since ancient Egypt till now, where human designed/evolved systems and dynamics are much more complex, and sitting on top of nature's complex systems.
Fiat currencies aren't that old, have failed many times, great powers who believed they could maintain total control everywhere, and tried, always desintegrated.....all unforseable in real time, and with consquences none in real time could predict.
History teaches us there is no such thing as a sure thing, no such thing as an infinite stable system, that power leads to its own destrurction, and that we cannot fully trust in leaders and systems....
Thus the only asset, portable, value dense, not requiring title, acceptable across all borders and cultures and all time frames is the best insurance that one must hold, if they have something to protect.
A small proportion of wealth in some form of bullion is a sensible precaution, and should not be seen as an investment as such, but as a guarantee that if the Shit really hits the fan, IT will always be purchasing power.
You can own agricultural land...but that didn't do a lot of land holders in Zimbabwe much good when their land was confiscated and given to others.
In the end there is no 100% guarateed way.
History is a fiction, it's right there in the very spelling of the word, HIS STORY.
"History teaches us there is no such thing as a sure thing...". Yet another lie.
Sure things:
1) Monica Lewinsky
2) Truth is whatever someone wants to believe. Regardless of the facts.
3) Sofia Vergara, Charlize Theron, Catherine Zeta-Jones, J Law, Beyonce, Alicia Keyes, Brooklyn Decker, Jessica Chastain, Sarah Shahi, Heather Graham, Terri Polo, and Kristen Stewart fer cryin' out loud will never be in my bed, or even take any of my calls after the restraining orders have been lifted
4) Taxes will always rise
5) You never own your own home, the domicile it sits in will always own it and lease it to you for payment of school, real estate, and borough taxes, eventually equivalent to and then exceed your original mortgage payment.
6) no one person, no matter what, can run the United States.
7) love will not stay
8) Israelis and Palestinians will spar with one another forever
9) Tofu will never find wide acceptance as a substitute for Kobe prime rib
...and I'm just getting started....
The Dollar is backed by nuclear weapons. Dare me...!
First deflation, than hyperinflation.
"Like previous hyperinflations throughout time, the actions that produce an American hyperinflation will be seen as necessary, proper, patriotic, and ethical; just as they were seen by the monetary authorities in Weimar Germany and modern Zimbabwe. Neither the German nor the Zimbabwean monetary authorities were willing to admit that there was any alternative to their inflationist policies. The same will happen in America."
http://www.zerohedge.com/news/2014-01-13/guest-post-we-will-be-told-hype...
Raising rates a point or two won't be a problem, and will make the fed look reasonable and responsible.
https://www.youtube.com/watch?v=vAFtlgJNMCo
I wonder if they were trying to ignite the conditions for a greater Europeane war with the games in the Ukraine. Seems probable since Russia reaction to the possibility of US bases along the Russian/Ukraine border would have been obvious, except Russia played it smarter than US goons.
"those of us yet to retire are screwed."
Mainly because there will be no retiring for us.
I think it depends on what you mean by "retire". If you mean to withdraw from the system, stop working for fiat, and live a self-sufficient life based on your own labor and capital, then I think retirement is in many ways easier than ever before in history. Advances in technology make subsistence farming a real possibility for many people. You need enough assets to purchase land, farm equipment, seed, stock, etc.
Many have already done this, and to the extent that we all focus our energy on ways to become independent, and to withdraw our participation/consent from the system, the better off we'll all be.
Unfortunately, most people don't have any idea what I'm talking about, and they're the ones that are going to suffer most when the system resets.