A Golden Reset?

submitted by jwithrow.
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Journal of a Wayward Philosopher
A Golden Reset?

April 15, 2016
Hot Springs, VA

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”Thomas Jefferson

The S&P closed out Thursday at $2,082. Gold closed at $1,226 per ounce. Crude Oil closed at $41.50 per barrel, and the 10-year Treasury rate closed at 1.78%. Bitcoin is trading around $430 per BTC today.

Dear Journal,

Last week we examined a potential path to the Great Reset triggered by the global adoption of negative interest rate policies (NIRP). The entry was not just speculation, however, but it was prompted by a report outlining a meeting in Manhattan between some major players in the world of finance and a source sitting at the nexus between government policy and the financial industry.

This meeting was not about the possibility of negative interest rates in the U.S., however. The unnamed source assumed NIRP was already baked into the cake. According to him it was not a matter of ‘if’, but ‘when’. Continue reading “A Golden Reset?”

Another Reason to Diversify into Precious Metals

by the Hard Assets Alliance Team:precious metals

Once upon a time, interest rates conveyed critical information about securities: the higher the rate, the riskier the investment.

Today, bond yields communicate little about underlying security risk and are arguably misleading. Consider the 1.57% yield on 10-year Spanish bonds. That level of return is hardly commensurate for a country suffering 23.9% unemployment.

The culprit for deceptive interest rates is a familiar one. Across the globe, central banks have suppressed rates to fend off crises or boost sagging economies—and zero percent is not the lowest band for this type of manipulation.

As an investor interested in precious metals, you’ve likely watched the growing number of countries shifting from zero interest rate policies (ZIRP) to negative interest rate policies (NIRP). Government bond yields in Germany, Switzerland, Japan, France, Holland, Denmark, and a handful of other countries have recently turned negative.

Negative real interest rates are nothing new, but we are talking about governments actually charging for the privilege of parking money with them. Yet another good reason to diversify into precious metals.

This shift from zero interest rate policies to negative interest rate policies epitomizes how detached financial markets have become from reality. More alarming, these radical polices exacerbate existing market distortions. By punishing bondholders, central bankers are forcing investors up the risk ladder, whether it be into junk bonds or equities.

You are better off tucking cash under your mattress than paying some profligate government to hold your money. But of course, there’s a better way. The utter insanity of a NIRP illustrates the critical importance of diversifying away from fiat currencies… and into previous metals.

Article originally posted in the February issue of Smart Metals Investor at HardAssetsAlliance.com.