ZIRP to NIRP

The central back of empire commenced the return of zero interest rate policy (ZIRP) on July 31st. With so little “headroom,” the short-term interest rate should approach zero percent before the end of the year. Quantitative easing (QE) has also commenced two months earlier than expected. Curiously, the easing policies were invoked without the backdrop of a financial crisis. Both European and Japanese central banks have followed suit in “goosestep” fashion.

When (not if) the global economic recession hits, all of the “Western” central banks will have no recourse but to move interest rates into negative territory. In the beginning, only commercial banks will be affected. However, in the long run, negative interest rates will be passed down to individual depositors. Any money sitting in a bank will then require the depositors to pay interest. That’s right, money will slowly disappear.

The predicted scenario will ultimately determine personal decisions and associated actions. Obviously, the motorhomeless option becomes quite viable as the $35,000 expenditure will provide a “home” that is not subject to foreclosure, at the least. In addition, the need to acquire an inventory of physical gold is a priority. There are no societal precedents for the negative interest rate scenario, so precautionary measures should be taken.