Sunday, January 15, 2012

People quietly moving their money and themselves out of the US

Could you imagine paying someone to lend him money? In a normal world...if I lend you money, I want something in return. It costs money to borrow money. Can you imagine a world where I'm so desperate to lend you money that I'm willing to pay you to do it? That's the paranormal world we're living in today. Pretty unbelievable, but now it's just happened in Germany. The government auctioned off 2.9 billion euros in six-month notes.

The yields were negative. The investors paid the government to lend them their own money. This in the era of the eurozone debt crisis where people appear more concerned with the return of their money than a return on their money. But in the US, we've gotten used to this right? With the Federal Reserve keeping interest rates near zero...for speculators that means free money to go speculate...for savers, that's meant losing money to inflation as it sits in the bank.

Or if you're loaning the US government money, the interest rates have been so low, again, you're losing money to inflation. Add to this, uncertainty over bankruptcies of insolvent banks, the staggering 15 trillion dollar US debt, a government with no credible plan to tackle it, and bills signed into law that allow indefinite military detention of American citizens, and that's why a lot of the investors we talk to tell us, behind the scenes that they are looking to get the heck out of dodge. Read more....

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