Dystopian future arrives - QE∞ - Denmark offers home mortgages at negative interest rates - [MONEY]

[Zenaan Harkness]

In the OP below, s/50%/5%/.

And a little more today from the "(((globalist bankers))) in distress
dept"; interesting times:


  Check-Mate For Central Banks: Negative Rates & Gold
  https://www.zerohedge.com/commodities/check-mate-central-banks-negative-rates-gold
  https://www.goldmoney.com/research/goldmoney-insights/negative-interest-rates-and-gold

  … Yet, these were precisely the conditions in October 1929, when
  Wall Street awoke to the certainty that Congress would vote in
  favour of the Smoot-Hawley Tariff Act at the end of that month. The
  shock of a 35% top to bottom fall in the Dow in October 1929 was
  only a prelude to an extended collapse following President Hoover
  signing it into law the following year. The economic research that
  followed the subsequent depression was conducted almost entirely by
  inflationists promoting reflation, so the destructive synergy
  between a credit crisis and trade protectionism has been ignored.

  … This article postulates how early evidence from the rising price
  of gold suggests the shock is closer than even perennially bearish
  analysts expect. We shall now take the inflationary consequences of
  an unexpected slump as a given in order to predict the changes in
  the relationship between physical gold and fiat dollars; a
  relationship that has for the last four decades led to a massive
  expansion of gold derivatives. To understand that relationship, and
  why it now appears to be reversing requires a working knowledge of
  time preference, the basis of interest; and more specifically the
  changing relationship of gold’s time preference to that of dollars.

  Interest and time preference …

  Negative interest rates create permanent backwardations …

  Negative dollar interest rates and gold …

  Bullion banks are now faced with the prospect that the Fed will
  reduce interest rates to zero again, even without a systemic crisis
  such as Lehman. Traders, who are not often deeply analytical, will
  almost certainly link gold’s move in the wake of the Lehman crisis,
  once dollar liquidity concerns subsided, from under $750 to over
  $1900, with dollar rates being suppressed at the zero bound. If
  rates return there and LIBOR remains positive, that will be a
  reflection of systemic risk, not time preference. Meanwhile, gold’s
  time preference will almost certainly be increasing as markets
  attempt to discount a new wave of base money expansion when the Fed
  attempts to stabilise the US economy and manage government
  finances.

  Bullion bank traders can see therefore, the day has arrived when
  gold’s time preference exceeds that of the dollar by an increasing
  margin. Furthermore, there is the growing threat of negative dollar
  rates, as economic conditions deteriorate. Putting other
  considerations aside, the switch in time preferences suggests a
  bullion bank’s future trading strategy should be the polar opposite
  of their current position. Instead of holding a small stock of gold
  to finance a large dollar position, logically they should maintain
  a small reserve of dollars to finance a larger position in physical
  gold.

  It is for this reason that not only is the gold price rising, but
  is likely to continue to rise, appearing to defy all expectations.
  …

  The consequences …

  As well as being modified by its specific supply and demand
  conditions, Gold’s time preference is essentially for its
  moneyness, represented by its use as a medium of exchange and store
  of value. The moneyness aspect links it to its exchange value for
  all commodities, and it is this aspect of gold’s qualities that
  should warn us that a backwardation in gold, emanating from
  negative dollar interest rates, will herald a general backwardation
  in commodities as well.

  … Assuming economic prospects darken because of the coincidence of
  American tariffs and the emerging crisis stage of the credit cycle,
  it will be check-mate for central banks. They were never appointed
  nor are they technically equipped to save the currency at the
  expense of widespread bankruptcies, not just in the private sector,
  but of their governments as well. And that is what markets will be
  faced with.

  The current situation has striking similarities with the 1930s, and
  the prospects for the global economy are driven by the same broad
  factors. With the gold standard then and not now the price effects
  are already showing differences. Nor was there a bubble of hundreds
  of trillions of outstanding derivatives then as there are today.
  This time, the monetary sins since the ending of the Bretton Woods
  agreement seem set to come home to roost all of a sudden, even if
  dollar rates are lowered towards zero and only stay there. But if
  they go negative and the more below zero that they go, the greater
  the backwardation on the whole commodity complex. The more rapidly
  commodities will be bought so the dollar, taxed with negative rates
  can be sold, and the quicker market actors will devalue the
  currency.

  With all other fiat currencies referenced to the dollar, it will
  mark the start of a process that is likely to collapse the entire
  fiat currency system. Bullion banks which are too slow to recognise
  the change and have not shut down their gold obligations will be
  forced to steal their customers allocated gold, or go to the wall,
  adding to the disruption. All commodity derivatives will face a
  period of rapid contraction of open interest, in lockstep or one
  pace behind those of gold.

  Instead of central banks stabilising the system by monetary easing,
  the easing itself will guarantee the crisis. The development of a
  problem in gold markets, driving the gold price rapidly higher
  while some banks are caught napping, is likely to anticipate a
  wider financial and systemic crisis. Therefore, with gold’s sudden
  move higher coupled with its persistent strength we can reasonably
  certain that we are seeing the start of the dismantling of the
  dollar-based monetary system, and that gold has much further to go.



>From The Collaborative International Dictionary of English v.0.48
[gcide]:
  Backwardation \Back`war*da"tion\, n. [Backward, v. t. + -ation.]
     (Stock Exchange)
     The seller's postponement of delivery of stock or shares,
     with the consent of the buyer, upon payment of a premium to
     the latter; -- also, the premium so paid. See {Contango}.
     --Biddle.
     [1913 Webster]





  "Money For Nothing And Growth For Free": Dutch Considering €50BN
  Growth Fund Financed With Negative Rate Debt
  https://www.zerohedge.com/crypto/money-nothing-and-growth-free-dutch-considering-eu50bn-growth-fund-financed-negative-rate
  https://www.zerohedge.com/crypto/mr.rabobank.com

  The Dutch coalition government is reportedly considering a EUR 50
  bn investment fund to support economic growth, to be financed by
  borrowing at negative rates …

  How and when will it be financed?

  The idea of the fund came shortly after the entire Dutch government
  yield curve, including the 30 year rate, moved below 0 percent
  (Figure 2). The possibility of borrowing money from the market and
  getting paid for the privilege has captured the imagination of the
  Dutch public and politicians alike. Some reports suggested the fund
  might be immediately stocked by borrowing from the market. Perhaps
  this reflects a sense that this opportunity to borrow at negative
  rates is a fleeting aberration. …



On Sun, Aug 11, 2019 at 10:50:40PM +1000, Zenaan Harkness wrote:
> Some might wonder why literal negative interest rates where your home
> loan reduces at the end of each year, even if you pay nothing all
> year, is dystopian.
> 
> This email, and the below linked Zerowedgie article, will not answer
> that riddle for you, although perhaps it has something to do with
> debasement of the value of governmnet monopoly (((fiat fake money)))?
> 
> Who knows ...
> 
> In the meantime, if you're a Denmark citizen, jump in on a 10 year
> fixed rate morgage with an interest rate of negative 0.5% -
> literally!
> 
> Also, as there is no risk of default, there is no mortgage insurance
> required, so any amount you would previously have paid on mortgage
> insurance, can now be paid on the loan capital, along with any other
> payments you might be inclined to pay, and of course no deposit is
> required - this is literally 100% financing.
> 
> But when there's no need to pay, why pay?
> 
> And as a bonus, all the immigrants (((the elites))) have flooded your
> nation with, can now afford to buy a home :D
> 
> 
> Soap, very interdasting... how best to game this new, degenerate
> (((Federal Reserve banking))) game?
> 
> Buy every house for sale?
> 
> Of course, in very short order one can imagine that every sane Dane
> will refinance and not sell, so real estate should dry up almost
> overnight.
> 
> It's also an end game of sorts since everyone who at least holds
> title to one or more properties, can now pay off all those titles
> just by taking out new mortgages ... although interest rates may well
> rise again at the end of that 10 year -0.5% rate mortgage, after
> which you shall owe almost exactly half your initial amount.
> 
> So that's effectively an automatic capital depreciation rate of 50%
> every 10 years.
> 
> The next trick the bankers can pull is to lower rates even further in
> a year, after all the sheeple have refinanced at -0.5%, to say -2%,
> and owe much less than 50% of the capital amount at the end of 10
> years.
> 
> It's all rather wierd.
> 
> 
> Smells of a (((banking system))) effectively in collapse.
> 
> Perhaps this is one way to unwind the almost unfathomable debt to
> equity ratios which require a systemic collapse, in the face of a
> populace who will literally just roll out thousands of local mini
> digital currencies if we DO see a 1929-style collapse, and so the
> incumbent - remember the Fed :) - wishes (naturally enough) to
> maintain their incumbency status.
> 
> But if collapse is your only option given that the masses are not
> really falling into civil war due to infinigger immigration and a now
> weekly stream of WHITE NATIONALIST TERRORISM SHOOTUPS (oh, wait, it's
> mostly extreme leftist Antifa crazies and the occasional copycats),
> but anyway, here's the bum out list for the Fed's "reset in the face
> of Chaos by pretending to be the nights in white shining armour when
> the chaos really hits the fan and the multitudes are screaming for
> stability:
> 
>  - China did not bite into a hissy fit of US Gov debt note selling,
>    so China cannot be blames for the reset
> 
>  - Russia stabilised Syria, Iran and Turkey, and to some extent
>    Egypt, and failed to smash the CIA's "most public coup in history"
>    in the Ukraine, and so World War 3 is close to no longer on the
>    table and therefore "nations fighting to hell" cannot be blamed
>    for the reset
> 
>  - the Huwaite Nazi Supremacist Terrorists in the USA have so far
>    demonstrated an utter inability to effectively unite and stand for
>    or even trigger a civil war in North America, so THEY can't be
>    blamed for the coming reset
> 
>  - Trump is too boldly all but (well, actually doing so), blaming the
>    Fed outright for every step the fed takes ("too little", "not
>    enough", "the Fed is crippling our economy", "Obama had much
>    looser policy, I should get that too" etc etc), and despite a few
>    timid shots in response, the Fed is bound to demonstrate a
>    conservativeness unable to decend to the depths of "popular
>    discourse" Trump, and so Trump cannot effectively be blamed for
>    the looming USD financial reset
> 
> So what other tricks have they got to deflect blame from (((the
> Fed)))'s predatory usury upon most of the world for the most recent
> century gone?
> 
> They could let Wall Street/ Main Street crash as happened in 1929,
> but this time we're onto the game, and so are the traders and
> business operators - everyone knows to blame the Fed for
> "artificially tight monetary policy", "insufficient $ stimulus" etc -
> so the Fed is going to get blamed this time, and they know it :D
> 
> Shit! The Fed is pretty close to all outta options. What now?
> 
> The banks don't want to collectively fall over, so what do they do?
> 
> When the world is held to crippling financial "debt" of $150,000 per
> man, woman and child on this planet, it's farcical - bring on the
> reset, no one gives a shit any more :)
> 
> But the banks don't want to collapse - there's every bloody chance
> they will lose their (illegal, unconstitutional) incumbency of the
> right to print cash.
> 
> So you start giving the money away.
> 
> They have no other option.
> 
> Why no other option?
> 
> There are some systemic reasons (phenomenally inter-leveraged banks
> and nations), but also the simplest of reasons:
> 
>   - If I don't personally have an economic stake in the economic
>     system, I have no interest support, or even to use, that system.
> 
> Multiply this for every man, woman and child on the planet.
> 
> The point is, there's a very real issue of shared common delusions
> and tacit consent - if we stop using a system, that system dies. A
> mental structure (shared common delusion) of money controlled by a
> very few, only lives to the extent that we all partake of/in, that
> system!
> 
> And now that we can roll out digital currencies for every pub,
> possibly for every family even (although that might not be so useful,
> whereas a local public bar has enough of a community/ group effect to
> actually be useful to that local community), we literally do not care
> about any coming/ looming/ threatening financial terrorism brought
> about by the Federal Reserve banks - in fact, the sooner this reset
> comes, the better, since when the money collapses, we have IMMEDIATE
> SANCTION to roll out our own local currencies, EXACTLY as happened
> towards the end of the great depression - usually centered around/
> run by, the local pubs across North America.
> 
> So hey, how awesome could this reset be?
> 
> Danged, bloody awesome mate! Absolute ripper!
> 
> And so now we see negative mortgage rates, actually being rolled out.
> 
> Well firetruck me sideways till Sunday! Did NOT see that one coming.
> 
> Suddenly there's a real possibility that 10s of thousands of Denmark
> (and soon other country's) sheeple, may well just go and lock
> themselves with a stake, into the incumbent Federal Reserve banking
> system, thereby providing somewhat of a breather to said (((Federal
> Reserve de Rothschild))) banking system.
> 
> Interesting times, that's for bloody sure :)
> 
> 
>   Denmark's 3rd Largest Bank Is Now Paying People To Take Out A
>   Mortgage
>   https://www.zerohedge.com/news/2019-08-10/denmarks-3rd-largest-bank-now-paying-people-take-out-mortgage
>