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Negative Interest Rates will destroy what is left of the middle class. The economy would tank and small business will have a difficult time raising capital. Prepare for Japanese no growth private sector if you have to pay a surcharge to get back your own money.


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SARTRE is the pen name of James Hall, a reformed, former political operative. "Populism" best describes the approach to SARTRE's perspective on Politics. 



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MMXIX Vol. 303 - August 22, 2019



 Negative Interest Rates


 
Banks will not give out more loans because the cost of funds is lower. Both businesses and consumers will not borrow money and will look at the potential growth in the future so they can pay the loans back.

"Instead, they look at the likelihood of future growth so they can get their money back," Ma said. "Consumers will not take out loans to buy new cars or homes just because the financing term is attractive. The notion that negative interest rates will produce loans and generate economic growth is just wishful thinking."

Summary

The total value of negative yielding debt globally is $10.6 trillion, up roughly 20% year-to-date.

Potential buyers of negative yielding bonds include central banks, regulated financial institutions, speculators and passive investors.

Side effects of negative interest rates include potential for future financial bubbles, excessive borrowing and leverage and lower bank profitability.

We think the increase in global debt stock of negative yielding bonds signals a slow down in global growth, continued low inflation and global central banks re-engaging to jumpstart their economies.

The Jackson Hole monetary conference had no sooner ended than one more European country was added to the scroll of countries with negative 2 year sovereign yields...
 


With its entire yield curve below zero and the yield on the 30Y auction assured to be below zero, a reflection of dwindling expectations for inflation and growth over the coming years and ahead of the ECB's relaunch of QE next month - Germany was hoping to sell some €2 billion in bonds maturing 2050. However, with bond yields rising sharply into the auction, with the yield on the German 30Y rising from -0.18% to as high as -0.10%, demand suddenly slumped.

And so, when the dust settled, it turned out that Germany had managed to sell just €824 million of the total €2 billion target at a record low yield of -0.11%, with the Bundesbank forced to retain almost two-thirds of the entire issue as demand plunged. In other words, this was basically a failed auction.

Thanks to the central bank's intervention, the bid-to-cover ratio was just barely above one, or 1.05 times, versus 1.07 times for the previous sale of similar maturity bonds on July 17, while the real subscription rate - which accounts for retentions by the Bundesbank - fell to 0.43 times against 0.86 times at the previous auction. Anything below 1 indicates that there is no real market demand for the entire issue.

If the interest rate is negative, it indicates that the entity providing credit is losing capital by taking the counterparty’s risk. However, the central banks in many countries have been in a position to implement negative real rates because of the continued demand from investors for low-risk securities as result of the prevailing uncertainities and poor returns provided by other asset classes.

Actually, the economic growth will not be stimulated if investors just rush to low-risk assets. The reason as to why the interest rate is taken to the negative territory by the central banks is to spur economic growth. Consumers, businesses and banks that hoard cash get punished when the interest rate becomes negative if they do not respond in the right way.
The turn to NIRP (negative interest-rate policy, reflects the breakdown of the macroeconomic model that guided monetary policy in the decade before the Great Recession. For central bank and mainstream economists the challenge has been to explain that breakdown, and it has given rise to zero lower bound (ZLB) economics. The argument is the Great Recession caused the natural rate of interest to become negative, but the ZLB on nominal interest rates prevented the market from delivering that required interest rate. Consequently, policy was compelled to step in with NIRP to overcome the ZLB obstruction.
 
The Google Globalism Gulag

The puzzling switch in the corporate motivation of Google seems confusing on the surface. But if you dig deeper into the manure of globalism, the notion that Google is primarily a business for profit is exposed as a distraction of what it really is and how it operates. It is entirely understandable that free internet services, especially when they usually work well and use superior features will attract the public in droves. However, the filtration of search results that only provide a biased outcome can no longer be denied. Notwithstanding, who benefits the most from the abandonment of the old motto, "Don't be evil"?

Read the entire article on the "Stuck on Stupid" archives
  
Obama Lame Duck
in a NeoCon Congress

 
You just have to love the wit and precision of a political image. Pat Dollard’s title NY Post Destroys Obama With Brutal Cover, says it all. The arrogant despot was indeed STRIPPED! The belated question is why did it take so long? In order to answer the obvious, most political analysts’ will fall into the partisan trap of party politics. Hope and change finally was seen as dictatorial haughtiness. Most voters do not believe that they are deceived by skilled liars when they cast their ballot. Yet, that is a pattern that is uninterrupted in most elections. Only the style of administrations differs, while the establishment continues to pull the strings and policies to move the consolidation of the New World Order forward.
 

 
Aug 21, 2019 12:32 pm | SARTRE

Contempt for whites is mainstream. Cable news pundits, influential Democrats, and newspaper columnists happily promote white replacement. Last week, black AboveTheLaw editor and frequent MSNBC guest Elie Mystal called for the subjugation of white Donald Trump supporters. “You don’t communicate to them, you beat them,” he said on AM Joy. “You beat them. They are not a majority of […]


Aug 21, 2019 12:12 pm | SARTRE

A new study by the non-partisan RAND Corporation helps explain why it’s going to be difficult, if not impossible, to ever stop the illicit drug trade: It’s worth tens of billions of dollars per year. Researchers at the think tank wrote in their report that illegal narcotics generate some $150 billion annually, or as much […]


Aug 21, 2019 10:38 am | SARTRE

The U.S. government is working hard to destabilize the nation. No, this is not another conspiracy theory. Although it is certainly not far-fetched to suggest that the government might be engaged in nefarious activities that run counter to the best interests of the American people, doing so will likely brand me a domestic terroristunder the FBI’s […]


Aug 21, 2019 10:32 am | SARTRE

The main problem with the US economy is that globalism has been deconstructing it. The offshoring of US jobs has reduced US manufacturing and industrial capability and associated innovation, research, development, supply chains, consumer purchasing power, and tax base of state and local governments. Corporations have increased short-term profits at the expense of these long-term […]


Aug 21, 2019 10:12 am | SARTRE

How can the Marxists, Trotskyites and Communists not riot in the streets and on Universities campuses? A vacuum exists there for many years, which the Conservative movement had ignored. The left-wing simply organized and planned much more thoroughly than the working taxpayers who paid their bills. Going back to the l950s when these phenomena appeared […]


                                                
 

The Center for Responsive Politics ranks Planned Parenthood No. 54 out of 19,225 making political contributions, and the NRA No. 543.

Harris reports on her campaign site, "In 2017, nearly 40,000 people were killed by guns in America."

But also in 2017, 332,757 children were destroyed in the womb at Planned Parenthood abortion clinics.

Recall that President Obama was the first sitting U.S. president to address the national meeting of Planned Parenthood, and he concluded his remarks to the nation's largest abortion provider saying, "God bless you."

Harris needs to be asked about this hypocrisy. Are we fighting for life and liberty, or not?


“We should rip Barron Trump from his mother’s arms and put him in a cage with pedophiles and see if mother will stand up against the giant @sshole she is married to.” — Actor Peter Fonda (Good Riddance)



 
 
 
Google 'manipulated' up to 16 million votes in 2016 election to help HIllary Clinton
 
The low end of the range of numbers cited by Mr. Trump matches testimony from psychologist and commentator Dr. Robert Epstein, who told the Senate Judiciary Committee in June “biased search results generated by Google’s search algorithm likely impacted undecided voters in a way that gave at least 2.6 million votes to Hillary Clinton (whom I supported).”
 
Read more

 

Brexit Begins: Stephen Barclay signs 'commencement order' formally starting the process that will take Britain out of the EU on October 31 whatever happens
 
The Withdrawal Act was already voted through in the Commons in September last year, but for it to come into effect a 'commencement order' needed to be signed by a minister. 

Signing the 'commencement order' was described as 'not merely symobolic' by hard line Brexiteer Steve Baker.
 

 

The positive accomplishments of Trump
 
He is an outsider, and politicians from both parties, along with seasoned bureaucrats and lobbyists, are fighting him every step of the way because they want to protect their power and riches.  Instead of the media holding the powerful's feet to the fire, they are supporting these people every day by trying to destroy Trump.

Read more

 

 


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