Australia’s central bank cut interest rates to a fresh record low as it moves to counter disinflation and support a labour market hampered by high levels of part-time work and underemployment. Reserve Bank of Australia Governor Glenn Stevens and his board lowered the cash rate by 25 basis points to 1.5 percent Tuesday, as predicted by 20 of 25 economists and market bets. Headline consumer price-growth slowed to a 17-year low last quarter, reflecting stagnant wage gains and weak global price pressures. The cut reflects that “inflation is likely to stay low for an extended period, and the labor market has lost momentum this year,” Felicity Emmett, head of Australian economics at Australia & New Zealand Banking Group Ltd., said before the announcement. Full Story
Start getting used to the phrase Inflate to infinity, for that is where the central bankers are heading. The race to embrace negative rates is on, and central banks are adopting it with Gusto. This experiment will likely only end when one so-called too big to fail nation collapses triggering a severe market imbalance otherwise known as a crash. Ultimately that mega crash will also prove to be a buying opportunity, but such an event has to be played differently. No point discussing that as we are a long way from that stage.
Germany became on Wednesday the second G-7 nation after Japan to issue 10-year bonds with a negative yield, highlighting a willingness among investors to hold top-rated debt even as yields across the world collapse. Germany’s 10-year government bond yield turned negative for the first time at an auction, fetching the lowest average yield on record for such paper at -0.05 percent. Full Story
Nothing new here, we knew this would happen, and it is coming to pass as expected. Every G7 nation will embrace negative rates and so will the US. The talk about raising rates is nothing but good acting. The U.S wants to be the last to join the Pack as it will give the illusion that the USD is still the best currency; when in fact, the only appropriate term would be the least rotten out of the pack. The Crowd loves a story, and they will get a good one. The end game here is to fuel the best speculation bubble ever and then pop it.
If you want freedom today, the 1st task is to attain financial freedom so that you can break free the clutches of the top players who seek to enslave you. They want you to run in a circle like a hamster that runs on a spinning wheel; the hamster thinks the faster it runs the further it will go, but sadly it is going nowhere.
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