By Greg Hunter’s USAWatchdog.com
Financial analyst Andy Hoffman says the negative interest rates installed last week by the European Central Bank will eventually mean depositors will pay the banks in Europe to hold their money. Hoffman explains, “I believe that will happen in time . . . inevitably there are only so many tools in the arsenal of the central bank. They can print money and lower interest rates . . . all that stuff. Now, the ECB, like the Bank of Japan, and the Fed are at the bottom of the barrel. . . . What they are trying to get them to do is for the banks to take the money out and lend it. . . . Of course, it’s ridiculous because they are not going to lend anything. They are insolvent. That’s why the ECB is also reinstating . . . their Long Term Refinancing Operation to liquefy banks like Deutsche Bank and Portugal’s Espirito Santo because they are in big trouble. So, will it get down to depositors? Well, you have two choices. Either eat those losses, and I just mentioned, they are already drowning in insolvency, or pass them along to depositors. Yes, I think in the coming months, you will see banks with negative deposit rates. . . . I would take my money out.”
So, where do you put money when bank deposits turn negative? Hoffman, who has 15 years’ experience as a Wall Street analyst, contends, “Some people say gold is a barbarous relic and you can’t eat gold. One of their favorite reasons why you shouldn’t own it is that it pays no interest. Now, paying no interest is paying higher than a bank account is going to be paid. We say at Miles Franklin that gold and silver is not an investment. It’s your money. It’s the way you used to think of money. You didn’t worry that your bank would be insolvent . . . that the bank would be bailed in or bailed out with your taxpayer money. Now, people are saying is it really safer to have my money in a bank? Isn’t it safer to have gold and silver? I think more and more people around the world . . . are going to realize gold and silver are real money.”
Hoffman also warns, “This is a major alarm bell for everyone and a major inflection point. Now, the central banks have dared go where even the Bank of Japan has not gone, which is to take rates to a negative level. You can’t go lower than negative. You go too negative, and people realize it doesn’t work, and people realize there is nothing left. Let’s face it, the European economy by all quantitative measures is at its low point since the EU started in 1999. In our lifetime, we have record unemployment and record debt. What these countries are trying to do is destroy their currencies in what I call the ‘Final Currency War.’ People are anticipating that all countries, including the Fed, are going to be doing their own QE (money printing) programs. This ‘Final Currency War’ is being fought with currency against currency. Where it is being lost by all the central banks is against items of real value, which is why food prices are soaring around the world.” Hoffman goes on to say, “More importantly, it’s items that we need versus items we want. The fact that an iPhone is going down in price doesn’t matter because you don’t need it. You don’t need to own a home; you just need shelter over your head. In things you need like food, energy, education, health care, insurance, you name it, those things are going up in value. The more they print, the more they are going to drive up prices of things you need. This is going to cause a further circle of doom.”
How will we know when the money printing game is coming to an end? Hoffman says, “The biggest alarm bell is the Fed. Forget what they are doing behind closed doors with the fake ‘tapering.’ When Janet Yellen is forced to come out and say we got to stop the taper, or we got to reverse it because of the failing U.S. economy, that will be the final alarm bell. After that, there will be no way shape or form that the mainstream media, Washington or Wall Street, can pretend that it is anything other than what it is–failed central bank policy.”
Join Greg Hunter as he goes One-on-One with Andy Hoffman, Media Director at Miles Franklin, precious metal specialists.
(There is much more in the video interview.)
After the Interview:
Hoffman is a prolific writer. Click here for his latest article titled “Whatever it Takes,”
and here for his archives.
Hoffman told me “Gold is my savings, not an investment.”