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The whole point is that Draghi should not be buying bonds in sovereign Europe. QE is a failure and simply a distortion of economics that has resulted in a collapse in yields and a destruction of savers funds whether it is via pension funds, mutual funds or individual savers dealing with their own capital. Where in economics should bankrupt borrowers be able to borrow money at zero or sub zero rates; where in economics has printing money to fund the socialist madness of the misguided left ended in anything but disaster; where in economics has the printed supply of money been allowed to destroy the savings of the world. Time for Draghi to exit and take his misguided policies back to Goldman Sachs. See how long he lasts there blowing their money down the tube!!
Interest rates will never rise again. 1. because sovereigns have too much debt. 2.Why should you be rewarded for leaving money sitting on deposit in a bank?
Savers are not been rewarded for leaving the money in the bank. They are been rewarded for allowing the bank to use their money to loan out to people and businesses to fund growth. At least that was the way it should be and use to be. As for interest rates. In normal times higher rates are used to control inflation. Inflation is good for sovereigns as it reduces in real money what they owe. It is inevitable that after huge amounts of QE all over the place that some where down the line we are in for a period of higher inflation and higher interest rates. When is not for sure but without a shadow of doubt the time is coming.
John I know 3 small businesses who raised money thru crowd funding because the banks wouldn't get involved. It still hasn't been properly regulated but imo it will be how your average Joe Soap will earn his returns in the future.
Tech and the internet poses a huge challenge to traditional banks in the near future but for now your statement that interest rates will never rise again is wrong. It may take a while in europe for rate to rise but the signals that QE will start to taper is not far away. The premise of QE was based on the trickle down effect. that model appears to be broken and as a result you see a huge popular revolt. they have not got their share of the dosh. The rich have got richer and in many countries with a social welfare system the benefits available have not left people any worse off. So the squeezed middle are making it clear to the powers to be that they wont stand for their lot much longer. The ECB will be forced to act to head off problems in Italy, france and of course Germany. What I would add is take Richie's advice if you are a long term borrower and FIX. if an investor get ready to protect your money in a higher inflation economy. I would also say the decks are been stacked in BKIRs favour at the moment (so long as the Euro survives).
John let me it this to you. A 10% drop in equities will control inflation. (: A lot more manageable than adjusting interest rates or decreasing money supply.
Actually in economics 101 higher inflation leads to higher interest rates leads to lower share prices not the other way around. You can see by looking at the s and p what low inflation has done for share prices.
Every time(one exception)the Fed were 'supposed' to be raising interest rates over the last 4 years they crashed the stock market. Collusion?? Where is the inflation??? New Economic 101??? Trickle down dead??(: Reagan is the hero of the so called deplorables. Trump and his band of merry geriatric billionaires are only interested in 1 thing and thats lining their own pockets.unless they are repenting for their sins of the past and are looking to buy indulgences for their salvation...