The Destruction of Civilization – Implications of Extreme Monetary Interventions – LewRockwell
Negative interest rates are a great example of these short-term patches, only in this case, they are not just useless as a cure for our economic ills, but they actually do more harm than good.
The outcome of this policy is that time becomes worthless. As one’s hard-earned money, set aside for a rainy day or for their children’s education, instead of appreciating, as logic would dictate, instead diminishes day by day, it does not make sense any longer to produce and to save. The basic motivation for each individual to get up in the morning and to work hard to achieve a higher living standard is removed and time, therefore, turns into a dimension without any value. If people can’t save any longer, by government decree, then there is no other way than to consume. And with all traditionally safe investment options gone, they are only left with the option of speculating in rigged financial markets, and the massive risk that comes with it, especially now, when we’re nearing the end of a long-term debt cycle.
The individual is thus turned more and more into a state-dependent, as the basis for a free life is the ability to increase financial independence and have savings on the side that keep you self-reliant. The fundament of a successful system requires individuals that live a decent life, knowing that they must first produce before they can consume.
“Civilization requires accumulation and production; de-civilization happens when too many people in a society borrow, spend, and consume more than they produce.” – Jeff Deist, President of the Mises Institute in Auburn (AL)
I talked with a CFP today at an investment firm, and he told me that it makes no sense to invest in anything that returns a negative interest rate. He also knows of NO ONE that is actually putting any money into any negative interest rate schemes, so who is investing this money in money losing schemes cooked up by ??????