Ep. 363 – Nationalization + Negative Rates

The Kapital News
The Kapital News
Ep. 363 - Nationalization + Negative Rates

Well we now have them both! As the Trump Administration readies yet another bailout package, Phase 4, they’re also openly discussing bailing out energy corporations. However, with respect to “assisting” the energy sector, a potential condition of extending any type of “capital” will come with strings attached – the government will take an equity stake. This is completely un-American and should not be tolerated nor considered. The government does not have the authority to lend money – it does have the ability to borrow money. It also does not have the authority to take equity stakes in companies. Well, US Constitution be damned as the government is preparing for exactly that. Furthermore, the US government is broke! We have a $24.5T national debt with a deficit that is likely to be north of $4T for FY2020. And the only way this can be financed is through the printing press. This is now a banana republic. Can you say hyperinflation?

On the negative rates side – we already have them and have had them for some time now on a real basis. However, when we consider the Fed’s own research in noting how balance sheet expansion and contraction also serves as a de facto rate cut or hike, respectively, now begs the question – do we now have nominal negative rates? Given their research and their past decisions, The Kapital News is of the mindset that the US now has de facto negative nominal interest rates. Look no further than the Fed’s balance sheet that now stands near $6.6T and counting. With over $2T added just over the last month. We would think that this would amount to a sizable rate cut. Understand that rates are already back to the zero bound at 0.00 – 0.25 bps. With this recent and continuing balance sheet expansion, it can be reasonably assumed that we are well into negative territory. This is detrimental to financial systems – look no further than to Japan and Europe for a case study.

The United States has failed and the only thing that can save it is a return to free-market capitalism, our Constitutional Republic, and liberty-loving men and women across this country that demand their country back! Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Bailouts #Recession #Debt #Deficits #USA #Congress #Depression #Gold #Oil #EndTheFed #Revolution

Join the discussion...