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| Just a few comments:
1. Looks like the US FED is moving in the wrong direction. If the other large countries economies are moving towards negative rates, will they not just park their money in Dollars assets where they can get a return. That means an even stronger Dollar b/c there will be grater Demand for Dollars. That also means even cheaper overall commodity prices such as Corn, Soybeans, Wheat, etc. Remember - at least according to the US government, the inflation rate in the US was only .5% or so last year, so the rational for increasing rates to preserve the value of the Dollar is not a strong one.
2. Banks are supposed to act as an allocator of capital. They are supposed to reward those borrowers that perform with more loans and cull the ones who do not perform with less loans. Sounds like the mechanism is being tinkered with to the point where they do not care if the prospective business is a good opportunity or not. What the Borrowers are saying is that we are not going Borrow b/c there are not many good opportunities out there that we are sure will work to ensure the loans we borrow can be paid back. So - the lenders are basically telling the Borrower to do the project anyways, albeit at a lower interest rate, Just does not seem like a good business outlook no matter how you look at if the banks are encouraging the development of such marginal projects to grow their economies.
3. Looks like the currencies of the world are looking more and more bleaker as the economies of the world that back them just seem to weaken. If you have never bought precious metals, it might not be a bad time to start. They have been beaten up b/c the have more or less been priced as just another depressed commodity, however, when the currencies of the world falter, that is historically when they really start to shine. Moreover, the banks will have a hard time trying to get you to shave a part of each Silver/Gold coin that you own each year, so the weight of the coin will become lighter, as they are essentially doing to fiat money with negative rates. | |
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Japan goes negative interest.
