by Jeff D. Opdyke
The Sovereign Investor
My grandmother used to tell me, “Sugar, if it’s free, it’s worth exactly what you paid for it.”
She usually told me that after I’d fished some useless “prize” out of a box of Froot Loops. Still, the sentiment applies to central banking as practiced in most of the Western world, most particularly here in the U.S. (Not coincidentally, Froot Loops is the perfect cereal when discussing the antics and philosophies that drive Western central-banker thinking).
We are rapidly approaching a new paradigm — a point where money means nothing. It will simply be free.
Negative interest rates now cover almost a quarter of the global economy. And the Federal Reserve is telling U.S. banks to stress test the possibility of negative rates at home. Given that quantitative easing failed and that near-zero interest rates failed, why should anyone think negative rates are the magic elixir?