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Gold/Mining/Energy : KITCO - Gold discussion

GLD 368.18

-0.5%

Oct 31 4:00 PM EDT

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From: mugwump9	6/10/2016 6:09:18 AM
	of 989

zero interest rate policies falling apart "Higher amounts of Japanese and Italian sovereign securities with sub-zero yields were the biggest contributors to the monthly changes," said Fitch analysts. This one's easy: How can the world be paying Italy to borrow?? Rational investors should never, ever lend money to an entity that irresponsible and incoherent, and the idea of paying for the privilege will occupy entire chapters in future history books. The conclusion will be that today's central banks are anything but rational. "Cash is expensive." Cash by definition costs nothing and yields either nothing or next to nothing. Never in living memory has it cost its owners anything (other than the secret tax of inflation). That it's now "expensive" illustrates how much the world has changed. The World Bank kept China's growth forecast unchanged at 6.7 percent this year after 2015 growth of 6.9 percent. Borrowing a bunch of money and wasting it, as China has done (the big exception being its aggressive gold buying) is "growth" only in a snapshot-of-the-moment sense. In a broader time frame that includes both the spending and future cash flows from projects thus financed, China has simply impoverished the future in order to maintain a facade. Which I guess makes it a member in good standing of the modern financial system. Anyhow, this is a story with several more chapters. And the next, very exciting one, will be the development of new policies to replace the current failures. These will -- as befits the size of the problem -- be breathtaking in both scope and wrong-headedness. safehaven.com

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