There seems to be a real argument in that negative central bank deposit rates cannot continue, which will mean gold will skyrocket.
Negative interest rates mean that people with savings in Europe have to find risky investment opportunities for their money since they aren’t even going to get their money back if they invest it in a bank.
All of this is, is another Ponzi scheme by the ECB [European Central Bank] that cut its deposit rate to minus 0.1%. It is the first central bank in history to take its deposit rate negative. The negative interest rates will be great for mergers and acquisitions, and is just a way of shoveling more cheap money into the hands of the 1%. Negative interest rates and cheap money will drive up equities, benefiting the rich. We won’t call it stimulus, we’ll call it robbing you in a different way….You have nowhere to put your money. This policy is creating yet another bubble in equities.
Greece, whose GDP is down 25% over the past few years and is experiencing 30% unemployment. Don’t call it a depression; let’s call it a slowdown or a recession. The IMF, as part of loaning Greece a large bailout package, imposed a range of austerity measures, including skyrocketing value-added taxes. In short, “Business stinks.” With so many people out of work, prices have to fall, which is then called deflation, when in fact it is just the markets responding to the economic situation of high unemployment.
Negative deposit rates will eventually send the message that paper money is worthless, driving up gold. Gold has a downside risk of around $1,240, and the breakout point is if it goes above $1,390
There is no recovery in Europe. They assaulted the citizens with austerity measures. They are doing the most desperate measures with a smile. And it’s the same thing in the States. A softening housing market, industrial production slowing, and Wal-Mart sales declining is not economic growth. There’s no real great strength in the economy. A third of the millennial generations are living with their parents, because they can’t find a job. Parents are welcoming them home, because the parents can’t keep paying property and school taxes.
The Fed has kept interest rates near zero for almost 5 years. When interest rates go up, and they are going to have to go up at some time, the economies go down. When they go down, you are going to see another round of trying to lower interest rates, flooding the system with fake money, and gold going sharply higher.
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