Negative Interest is Here

Hi Everybody, Frank here.

A couple of days ago I ran across a news story that I thought was very interesting. It didn't make big news, I doubt if most people have heard of it, and it didn't seem like news to me either. Then later on, it was like one of those light bulbs went off. But it didn't go off in the usual way, it went off and gave me a kind of different look at something. I'm going to share with you a slightly different take or perspective about this Swiss bank story. It's going to have a lot of rambling, and it's going to appear to be a somewhat partial rant. But the more I thought about it, it became more and more clear as to what was really happening. You see the Swiss National Bank has started to sell ten year bonds at a negative interest rate. Well, I'm going to tell you all this stuff again, and if you can or choose to, please follow along and see if you can see the perspective that I took out of this article. I would appreciate your comments.

Switzerland is selling ten year bonds at negative interest, therefore, put your money with them and only lose a little bit, guaranteed. Or, put your money with someone else and lose a whole lot more. What this is telling me is that the world bond market is about to spiral downward. Bonds have always been considered to be a safe investment with a small return. But it appears that Switzerland is making this available at a good rate, because soon other competing markets are going to move into greater negative territory. Now, they're also doing this publicly as a hedge against a larger deflationary move. What this means, as I see it, is like I said earlier, the world financial markets are about to spiral downward out of control. This is an unprecedented move by the Swiss Bank. Obviously, this downward spiral has already started. It's not going to happen in one day, it'll take weeks, months, maybe. But when your ATM quits working, and your bank doors are locked, that $0.35 of spending cash you have in your pocket will be the last currency you see. 

I know people that buy everything on credit cards. Now I'm not talking about major purchases here, I'm talking about buying a burrito for breakfast, and it goes on a credit card. When they buy gasoline for their car, it goes on a credit card. When they do need cash, for some unforeseen reason, it comes straight out of the ATM. I know folks that go to the ATM multiple times a day. They carry zero cash. 

Folks need to be paying attention. Switzerland just sent a huge message world wide. You might want to get two or three dollars stored away, because when the EBT cards quit working, banks are closed, ATM's don't work, that means no more burritos, no more gasoline, no more psychotropic drugs from the pharmacy, no more cigarettes, and the list goes on and on. That burrito is not going to feed a family of four for very long. That $0.35 that you have in your pocket will not go very far. And if you do have a little cash stored up, buried out in a jar in your yard, you'd better spend it as fast as you can, because within a day or two after the ATM's shut down, cash will be worthless. 

We've talked for a long time now about what's coming. It may take a few more weeks, months or even years, but the move by the Swiss bank is a first time event. Think about it. They are offering you the deal of a lifetime. Put your money in one of the world's most stable banking systems, pay to put your money into this bond program, so they can help preserve your wealth. Any other system where you put your money is going to charge a greater loss. That's hard to conceive, isn't it? 

You've heard of Austrian economics, right? Where growth goes on perpetually? And debt is good? Well, these folks are some of the same folks, the Swiss that is, that helped develop the Austrian economic system. Their negative interest ten year bond tells us that growth is not perpetual, and that the Austrian economic system has flaws. Just like our system has flaws. Perpetual growth is impossible. It has been known to be impossible since the beginning of our economic system's development. Blame it on

the Federal Reserve, blame it on coming off of the gold standard, or you can blame it on us being the reserve currency. And you can throw in the petrodollar if you need something to blame. Any one of the afore mentioned failures will collapse the system. Everyone of those mentioned is in the process of collapsing. Perpetual growth is unsustainable. Pick anything you want to blame, and we are well past the point of being there. Every world economy is in a downturn, that's why the Swiss did what they did. They're discouraging investors from leaving faltering economic systems and rushing to their known stable banking practices. But, investors are still hurrying to buy negative interest Swiss bonds. I don't care what the news media is telling the general public, the economic systems of the world are imploding, including China, and the Euro, and the U.S. dollar. World growth is grinding to a halt.

What does this mean to you and I? It means that taxes are going to continue to rise. There is going to be more government intervention in every aspect of our lives. Ultimately, the government will reinvest your 401k, and they will do this for your own good, of

course. These are the types things are going to occur. We will probably go to a cashless society, because we all know that hoarding is bad and wrong. Try going down to the bank and withdrawing $5000.00 in cash. Even if you call ahead, a couple of days even, you will have to explain to the bank teller why you need the money, and you will have to fill out a federal form that you received that much money. This is nothing new, because if you want to buy, let's say loose diamonds, or you ran across a great sale on someone's antique silver coin collection, and this person wants cash. You're going to have to explain why you want that money. 

Don't forget that in 1933, I believe, the Roosevelt administration confiscated all gold and silver from the rightful owners in the United States of America. But first they artificially lowered the cost of gold and silver, so they could steal it from the American public at a lower cost, then re-inflate the value, after they had confiscated everyone's wealth. If you chose not to participate in this redistribution of wealth program, you were then an immediate felon. If you don't think that they won't confiscate your 401k, and then pay you pittance on the dollar, then you do not believe the old saying about history repeating itself. They did it in 1933, and do not kid yourself, that the greedy politicians will not confiscate your wealth, in whatever form it is, to keep their blasphemous, never ending, spending orgy alive for a few more days. 

So you might want to consider having a little cash in hand. When that ATM, as mentioned before, quits working, and your credit card quits working, you might want to have a little bit of cash in your

pocket so you can buy food for your family. If you don't have cash, your family is going to starve to death. It will be too late to order food storage over the internet, it will be too late to go to the big box store and buy a few weeks worth of canned foods, and it will be too late to buy all of those seeds that you were going to plant. What it boils down to is that it will be too late. What I have read is that the average family has less than a three day supply of food in their house.

Now most folks that read this already know everything I've just said. But it's nice to have a little reminder every now and then. Today your credit cards still work. The ATM's still have a little cash in them. The big box stores are still open, or they were as of this writing. But then, there is always the guy 

that says, I don't have any extra money to buy things, while he's standing there sucking down a 44 oz. Slurpee, talking on his newest and most advanced smart phone, talking to his kid that is in the backseat of his overpriced SUV, and the kids is on his newest most advanced smart phone. The kid is in the backseat and the guy is in the front seat, and this is the only way they know how to communicate. Get the picture here? Way too many useless gadgets in an immediate gratification society. But they don't have time to stock up on something as useless and trivial as maybe a couple of bottles of water and some canned food. 

This is where we are. This is not what is coming. But this is what is here. The Swiss banks just sent out a loud call to everyone on the planet, and I doubt very seriously if any of the major networks carried the story on their evening news. Just one more announcement. Dark clouds are on the horizon. They are getting closer everyday. And that Bozo I just described with the newest, most up-to-date cell phone? He's going to be coming to your house and wanting your food. Because he is still a father and he will do what is necessary to feed his family. More food for thought. 

Well folks it's time to go. We're going to go milk our goats, and pet our new babies a little bit because they are our next generation. Tomorrow we're going to make cheese again.

We'll talk more later, Frank