by Jeff Nielson, Sprott Money:
A normal, benchmark interest rate for a national economy is between 3 – 5%. Indeed, if we go back a little further in history , a normal rate was significantly higher than that range. This fact is mentioned because after eight years of monetary madness in the West, many (most?) people have completely forgotten what “normal” is with respect to interest rates.
The title of this article is something of a misnomer. There are, in fact, numerous big lies being disseminated concerning the Western world’s utterly insane, totally criminal, near-zero interest rates (and now “negative” rates). However, all these Big Lies are then piled on top of each other, in order to create an even Bigger Lie.
When Japan introduced the world to the “0% interest rate”, it was universally castigated for this monetary voodoo. But when the Western world copied Japan (after Japan’s policy had already failed for more than 20 years), suddenly near-zero interest rates became normal and acceptable. This brings us to the 21 stCentury Principle of Monetary Policy. If one nation institutes a really crazy monetary policy, by itself, it is labeled as “insanity”. But if everyone engages in that same, really crazy monetary policy ( after it has been proven to be a failure) then it becomes “normal” and acceptable.
To deceive our Zombie populations into believing that these Criminalized Interest Rates are “normal”, the mainstream media has turned up its propaganda machine to maximum decibels, broadcasting an endless series of lies and half-truths, as our governments pretend that they are not perpetrating the complete destruction of our economies. A particularly obvious-and-nauseating example of such lying comes from (where else?) Bloomberg News .
People have come up with a lot of reasons to worry about zero interest rates. At first they worried about inflation, and later about financial instability and bubbles caused by a reach for yield. But the years passed, and there was no inflation, no bubble or instability in financial markets . [emphasis mine]
Clearly the remarks above represent such audacious lies that no sane writer could possibly believe them to be true. “No inflation”? Food costs have more than doubled over the past eight years. Housing costs (in many markets) have also more than doubled.
“No bubble”? U.S. equity markets are at all-time bubble-highs. The U.S. bond markets is also at an all-time bubble-high – and it isn’t even supposed to be theoretically possible to have a stock bubble and a bond bubble, simultaneously. There are obvious real estate bubbles throughout all Western regimes.
“No instability”? We see daily headlines from Europe, across various jurisdictions of Big Banks in grave,financial peril . Indeed, more “bank bail-outs” have already begun. However, for the moment, let’s pretend that all of the pathetically obvious lies above were actually true – for the moment – and simply examine the reasoning behind the lies.
But the years passed, and there was no inflation, no bubble or instability in financial markets.
More generally, this reasoning translates as follows: our economies haven’t been destroyed yet, so this means there is no problem with near-zero interest rates. The ‘logic’ behind this assertion is so infantile that we have a joke/cliché which exposes such stupidity.
A man jumps off the roof of a 100-storey building. As he sails past an open window on the 50 th floor, someone inside the building hears him remark, “So far, so good.”
Here we have a liar/apologist hired by Bloomberg to pretend that near-zero interest rates are not destroying our economies, and this is the best fiction the writer could produce. Near-zero interest rates haven’t destroyed our economies yet, so they are OK. And (as already noted) every facet of the “evidence” used by the writer was a bald-faced lie. We do have raging inflation. We do have extreme asset bubbles. We do have massive, financial instability.
Please follow SGT Report on Twitter & help share the message.