Currency Wars & Negative Rates Equate To Next Global Crisis

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Currency Wars & Negative Rates Equate To Next Global Crisis Currency wars & Negative rates will destroy fixed income individuals

Next Global Crisis

The “devalue or die currency wars are picking up steam; Japan’s central bankers are not alone when it comes to taking rates into negative territory. A host of European nations have joined the devalue or die war; imagine having to pay the banks to keep your hard-earned money. The worst being that the banks will lend this money out and earn interest on it; they will win on both sides.

The worst-hit group is going to be retired individuals on a fixed income; they are being hit on both ends of the spectrum; the cost of living expenses are rising and income earned is dropping.

Central banks declare war on Citizens

How to play this game and avoid the Next Global Crisis

Central bankers will continue to flood the markets with hot money, and hot money has the effect of propelling the markets higher.  Individuals on fixed income need to stop chasing yields and instead start investing in strong stocks.  They should view pullbacks as buying opportunities; strong pullbacks I should be used to open up positions in companies with high growth rates. Some examples are AMZN, FIZZ, TAST, HRL, HAS, COST, etc.

The Fed will join the negative interest rate party sooner or later. The bond market has rallied in the face of an interest rate hike. In fact, it is trading at new highs as we speak.  This is a signal that the Fed’s hands are tied and that sooner or later it will have to join the “negative interest rate club”. In this race to the bottom, resistance is futile.

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