As indicated below, almost all central banks are going to a Zero Interest Rate Policy - ZIRP, which will only serve to buy time and cause gold and silver to flourish.

Regards - VHF

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Zero Rate World, The Age of Free Money: We're Doomed

Ben Bittrolff

November 7, 2008

Global ZIRP. This is going to be a disaster.

In a zero rate world there is NO incentive to save. NONE.
In a zero rate world the incentive is to borrow, leverage and spend.

Kind of like what we have been doing.
That didn't work out so well.

So how can more of the same be a fix? If cheap and easy credit got us into this mess how can the absolute extreme version of cheap and easy credit get us out? How can ZIRP save the day?

This neo-Keynesian claptrap has got to stop. Quantitative easing doesn't work. It's probably time for heterdox monetary policy.

Otherwise we're all doomed.

Zero Rate World May Lie Ahead as King, Trichet Cut (Update3): “The age of free money may be at hand.

As major central banks slash interest rates with unexpected speed, benchmark borrowing costs are now below core inflation for the first time since the early 1980s, and policy makers are signaling they will go deeper.

Yesterday's cuts by the Bank of England and European Central Bank, which came with the Federal Reserve and Bank of Japan on the cusp of zero rates, are a bid to shock life back into their recessionary economies and strained money markets. It may be an uphill battle as consumers and businesses show greater interest in saving than spending, and banks hoard capital rather than lend it.

“It's the race to zero,” said Stewart Robertson, an economist at Aviva Investors Ltd. in London, which manages about $230 billion. “There's no obstacle to more rate cuts.”