by Bob Chapman
February 15, 2012
By decree, by the privately owned Federal Reserve, zero interest rates are here to stay. You do not get to borrow at those rates, only the member banks do. In the latest currency swap (loan) from the Fed to the ECB, European Central Bank, as we noted in previous issues over the last two months, that Europe has been forced to join the Anglo-American system. The system of zero interest rates and the continual creation of money and credit. Due to the Fed’s ability to create endless supplies of money and credit it eventually took over the control of ECB and European monetary policy. These policies starkly point out the zero interest rates and monetary policy of endless money creation is the path to be taken probably by all in the system to lesser or greater degrees. That means no savings and that leaves speculation and the purchase of gold and silver related assets.
Looking at monetary history we would categorize this policy as Neanderthal. The recession/depression that the Fed has been tying to neutralize via zero interest rates and quantitative easing hasn’t worked and it won’t work. What is worse is the Fed knows it won’t work. Greenspan and Bernanke saw 21 years of such policy not work in Japan, yet they learned very little from living history. An example that zero interest rates do not work and render currency meaningless is the housing market. They cannot even lower bank home inventory with 3.8% loans. That tells you lower interest rates are not the answer. More jobs are the answer and where are they? They are in some other country under free trade, globalization, offshoring and outsourcing. It is far more important that transnational conglomerates make mega profits. Zero interest rates and quantitative easing stifle many things. It causes banks not to lend and to hold cash and as well be in no real hurry to get rid of real estate inventory. They figure the zero interest rates and QE will go on indefinitely. Such a climate also leads banks to speculate. If our take on the financial sector is correct it will be a hole before the bottom comes out of the system. The ability of the elitists to keep the game going until hyperinflation manifests itself is very good. You just saw that with a $1 trillion loan from the Fed to the ECB. They can make as many of these loans as they please until the system signals no more. How long will that take, who knows? All we know is that gold and silver will rise in that process.