Negative interest rates, Deflation, Crash, Reset! Now emerging!
We now have seven (7) nations which have engineered negative interest rates (i.e., Sweden, Denmark, Netherlands, Germany, Finland, Austria, and Switzerland). This situation is unprecedented and reveals the deflationary nature of today’s markets. Why are so many investors choosing a negative interest rate when pure CASH (or gold) would be much superior. It all relates to the emotion called FEAR. Investors (the big boys) are fearful of losing all their principle and a Sovereign Bond is currently viewed (by the big boys) as superior to cash or gold. Gold is generally viewed negatively by many as they (the big boys) ASSUME that our elite Authorities will manage the system so that a serious collapse is avoided. The rush for gold and silver, however, will eventually emerge when the FEAR index grows exponentially! As of today, the FEAR index is only around 50%!
Stephan Ingves of the Swedish Riksbank is a typical Keynesian policymaker. He is so fearful of deflation that he has increased QE and lowered his repo rate to – 0.25%! What emotion is this guy revealing???
Cyber money (now some 96% of all monetary deposits) can be confiscated by the authorities if a bank goes insolvent. Our markets now function mostly with cyber currencies and virtual financial instruments. These type of instruments lend themselves to confiscation when our major markets start to collapse/crash (with insolvencies emerging)! Cash deposits (of cyber currencies) could also be confiscated by the system (via a Bail-In procedure) so that insolvencies are diminished. Yes, we are heading into a huge deflationary CRASH in the very near future (some time in 2015). All the signs are now present. Sweden just increased their QE operations to $30 billion and lowered their repo rate to minus 0.25%. Japan is operating on the emotion of FEAR and so is the Eurozone! This is a clear sign that deflation is seriously feared by our Central Bankers. The Keynesian economic model is in serious trouble! The END GAME is nye!
The Keynesian Economic Model depends totally upon DEBT and INFLATION! This model is now mostly defunct and obsolete for promoting economic growth going forward! We now need a NEW MODEL!
Deflation is anathema for the Keynesian economic model. As consumers we all like deflation (lower prices). But our Central Bankers and our corporate investors (the big boys) need INFLATION if they are to repay their debts. We now have three Central Banks pursuing QE to the maximum so that inflation will hopefully re-emerge. These Central Banks are: Japan, Sweden, and the Eurozone. All our Keynesian policy makers are dreadfully fearful of any type of systemic deflationary trend. Their model can not survive with any type of systemic DEFLATION as a continuing trend. Yet the markets are living with huge FEAR (as most realize that the Keynesian model is likely to collapse rather soon)! And FEAR (this emotion) is producing a lack of risk taking and this leads to systemic DEFLATION.
The DEFLATION index is growing and this trend will continue going forward IMO!
Our negative interest rates and growing FEAR is creating a market environment where a huge stock market CRASH is brewing. I sense that this CRASH of our stock and/or bond markets could start very soon (possibly between now and the end of April). I also sense that our real estate markets have peaked and are now in a serious declining trend. This is ominous for our Keynesian policymakers and our mortgage lenders. A declining real estate market means deflating VALUES. Deflating values means lender insolvencies down the road. Lender insolvencies mean collapse and bankruptcy! The entire House of Cards is now starting to crumble. The momentum is growing as the Snowball of Deflation gathers steam!
The coming ride is DOWN! This will likely be evident later in 2015! Many sense this reality NOW!
Our policymakers will soon discover that all their QE and stimulative programs will be like ‘pushing on a string’. The market is rejecting RISK and this means that we will soon experience a huge market CRASH. With today’s interconnected cyber markets operating with ALGOS (algorithms) as the means for setting our prices, we could witness another silent FLASH CRASH within our computer screens in the very near future. A flash crash could spread to the global markets rather quickly as all our markets today are interconnected and interlinked. Watch the markets for signs of this coming stock/bond market collapse/crash. My sense is that we are only days or weeks from the beginning of the END (of the Keynesian economic model). I am: https://kingdomecon.wordpress.com.
The coming FLASH CRASH will be a silent crash within our computer screens!
P.S. After the crash we will most likely witness an attempt at a RESET of the entire global monetary system. This, however, could take years and we may want to think in terms of a NEW SYSTEM…going forward!