Invest for the Best but Prepare for the Worst
RETIRO DOS BISPOS © QUINTA DA FONTE DO BISPO
CXP 797A, EN270
Richard E Bassett
Richard J Bassett
(351) 281 971 484
Mobile: 966 006 436
Low Risk Investment
Backed by EU Funds
Supported by the Portuguese Government
EMERGENCY NUCLEAR OPTION
Fast Track option
This €1Million NUCLEAR OPTION will get you and your family EU Passports and the right to stay in Portugal as long as you keep your investment regularised. It is available NOW -
Are based on an exceptional investment potential, backed by EU funds.
A Four Star Hotel set in the hills, but close to all amenities.
The investment will provide annual returns better than a bank, and the security of knowing that your money is out of reach of the banksters!
Yet, in an emergency, you will be at liberty to evacuate your family to this safe environment, far away from any “nuclear first strike zone”. No need to worry about food and water, the restaurant is stocked to feed up to 400 people a day!
The facility can go off-
The Nuclear option is a long-
To Learn More
Why not visit Portugal and investigate these opportunities for yourself -
00351 281 971 484
For more information or email:
This €100,000 Bolt-
An alternative solution will give you virtual sanctuary in Portugal, away from crowds, surrounded by like-
Fed Opens Negative Interest Rate Pandora's Box: What Happens Next
Submitted by Tyler Durden on 09/18/2015 18:01 -
As we already commented extensively, while the Fed's dovish non-
This was the first time in Fed history that an FOMC member has on the record predicted NIRP in the US.
Janey Yellen's subsequent non-
I don’t expect that we’re going to be in a path of providing additional accommodation. But if the outlook were to change in a way that most of my colleagues and I do not expect, and we found ourselves with a weak economy that needed additional stimulus, we would look at all of our available tools. And that would be something that we would evaluate in that kind of context.
Furthermore, when considering that virtually all of Europe is already flooded by NIRP, and earlier Bank of England's Andy Haldane, one of the otherwise more rational members of the central bank, advocated negative rates in the UK, one can be virtually certain that unless there is a dramatic rebound in the global economy, the next step by Yellen will not be a rate hike, but easing (just as Goldman predicted) right into negative interest rate territory.
What would NIRP in the US mean in practical terms?
For the answer we go straight to, drumroll, the Fed itself whose New York economists discussed precisely this topic just three years ago and issued a very stark warning (which apparently the Fed itself decided to ignore), saying "If Interest Rates Go Negative . . . Or, Be Careful What You Wish For."
This is what the New York Fed said in August 2012:
If Interest Rates Go Negative . . . Or, Be Careful What You Wish For
One way to push short-
Without taking a position on either the merits of negative interest rates or the Fed's statutory authority to fix the IOER below zero, this post examines some of the possible consequences. We suggest that significantly negative rates—that is, rates below -
Cash and Cash-
The usual rejoinder to a proposal for negative interest rates is that negative rates are impossible; market participants will simply choose to hold cash. But cash is not a realistic alternative for corporations and state and local governments, or for wealthy individuals. The largest denomination bill available today is the $100 bill. It would take ten thousand such bills to make $1 million. Ten thousand bills take up a lot of space, are costly to transport, and present significant security problems. Nevertheless, if rates go negative, the U.S. Treasury Department’s Bureau of Engraving and Printing will likely be called upon to print a lot more currency as individuals and small businesses substitute cash for at least some of their bank balances.
If rates go negative, we should also expect to see financial innovations that emulate cash in more convenient forms. One obvious candidate is a special-
Early Payments, Excess Payments, and Deferred Collections
Beyond cash and special-
We might also see some relatively simple avoidance strategies in connection with conventional payments. If I receive a check from the federal government, or some other creditworthy enterprise, I might choose to put the check in a drawer for a few months rather than deposit it in a bank (which charges interest). In fact, I might even go to my bank and withdraw funds in the form of a certified check made payable to myself, and then put that check in a drawer.
Certified checks, which are liabilities of the certifying banks rather than individual depositors, might become a popular means of payment, as well as an attractive store of value, because they can be made payable to order and can be endorsed to subsequent payees. Commercial banks might find their liabilities shifting from deposits (on which they charge interest) to certified checks outstanding (where assessing interest charges could be more challenging). If bank liabilities shifted from deposits to certified checks to a significant degree, banks might be less willing to extend loans, because certified checks are likely to be less stable than deposits as a source of funding.
As interest rates go more negative, market participants will have increasing incentives to make payments quickly and to receive payments in forms that can be collected slowly. This is exactly the opposite of what happened when short-
Yes, the conclusion is staggering: the Fed itself previewed the complete debacle that the Fed itself is now preparing to unleash with NIRP which will lead to "an epochal outburst of socially unproductive—even if individually beneficial—financial innovation." Not only that but the Fed, in a moment of rare lucidity, admitted that "private sector responses to negative interest rates have spawned new risks that are not fully priced by market participants."
Tell that to Europe, Sweden, Switzerland where NIRP already reigns supreme, and all other countries where NIRP is coming.
But what may be missed between the lines is the Fed's explicit observation that in a world of NIRP, cash will reign supreme, as everyone rushes to withdraw their "taxed" bank deposits and keep the funds in the form of paper cash, hidden safely somewhere where the bank has no access, and where no bank can collect an interest rate for the "privilege" of being funded with a negative rate liability.
Furthermore, as the Fed correctly observes, "the usual rejoinder to a proposal for negative interest rates is that negative rates are impossible; market participants will simply choose to hold cash. But cash is not a realistic alternative for corporations and state and local governments, or for wealthy individuals."
So what is the alternative?
The answer was hinted during Andy Haldane's speech earlier today in which he not only urged the banning of cash but the implementation of negative rates, two concepts which, after reading the note above, should intuitively go hand in hand: as we commented "one idea, Haldane told an audience of business owners in Northern Ireland, could be to scrap cash and adopt a state-
And fascination it is. Below are some examples of recent Fed research on a topic which as recently as 2011 it held as a heretic taboo, and which the ECB considered a Ponzi scheme as recently as November 2012:
Chicago Fed on Bitcoin: A Primer, December 2013
Boston Fed on Bitcoin as Money, September 2014
St. Louis Fed on "Bitcoin and Beyond: The Possibilities and the Pitfalls of Virtual Currencies", March 2014
Federal Reserve on Bitcoin: Technical Background and Data Analysis, October 2014
The Federal Reserve Bitcoin Strategy
Last but not least:
Research: Federal Reserve Needs Power Over Bitcoin
Of course it does. Why? For two simple reasons:
First, as noted above, cash and NIRP simply do not mix as cash provides the general population a handy way of circumventing the intentionally punitive implications of negative rates, which as a tax on all savers, would force everyone to spend savings the moment these were created. The thinking here, of course, would be that with savings immediately converted to consumption, the velocity of money would surge and boost economic growth in the process even if it was conducted under punitive rate duress.
Second, and even more important, is the blockchain basis of bitcoin, which is precisely why the Fed is so fascinated by it. With a perpetual and current ledger of every single transaction in the monetary domain, a digital currency such as bitcoin provides the Fed something cash never would -
It is the second aspect of bitcoin that has led to such recent headlines as "Big banks consider using Bitcoin blockchain technology" and, of course, Bloomberg's piece from September 1 in which "Blythe Masters Tells Banks the Blockchain Changes Everything."
Yes it does, and especially in a world in which the Fed regulates all blockchain transactions under a negative interest rate regime: quite simply, the combination of blockchain and NIRP give the Fed supreme control over all transactions.
Simply said: bitcoin under NIRP is a Fed match made in heaven.
There is just one small hurdle -
Which, in a nutshell, is what Kocherlakota's negative interest-
And, before you ask, will there be substantial -
Fraud Within the Financial System -
A Black Swan Event is approaching!
The Template for the Next Crisis: Bail-
Austrian Economics, Money Freedom
Wall Street Wants To Trap Your Money
Safe Assets In A World Gone Mad
Negative Interest Rates: What’s Next?
This has Never Happened Before!
Additional facts for you to take into consideration!