We’re at the mercy of central banks. That’s the bottom line message, stemming from the October – February trading period. Some people drink one beer a week. Some consume one a day. At some point, though, some add a little Vodka, a shot of Whiskey, two cocktails; and before they know it, they’re addicts, completely dependent on booze to lighten the load. 

Financial markets have become addicted to central bank liquidity and to low interest rates. It seems almost unfathomable to imagine how governments and businesses will function, had interest rates been more aligned with historical averages of 4.5%-5% for the 10-yr Treasury bond.

To start with, Washington would have to pay $45 billion annually for every $1 trillion it borrowed. This is on top of its existing $1.5B daily interest expenses on the $22 trillion that are on the books as we speak.

The questions remains: are investors – or every person walking the face of the earth, for that matter – either addicted or victimized by central banking? The answer is that around 90% of the people are at the mercy of the monopolized credit witches, while the remaining 10% are beneficiaries of the system.

The wealthy don’t want to see high interest rates, since their portfolio holdings, real estate equity, and bond positions would be sliced by a meaningful amount. The poor wouldn’t like higher interest rates either, since governments would have to cut social programs in order to stay afloat. And the middle class – or what’s remaining of it – needs to fear higher interest rates, since Uncle Sam would want to tax them more to finance the increasing interest on the debt.

Higher interest rates will definitely minimize the currency printing and would cause far less borrowing, which the world doesn’t need anymore of, but is it capable of hitting the RESET button and going through a depression, in order to clear the slate?

On the flip side, who is to say what the proper interest rates should be? All we know is that a bunch of bankers can never properly come to the right decision, as the free markets ought to determine that. Cash has more value in a world where money isn’t debt or credit (a fiat currency nightmare).

Governments would be constrained and wouldn’t hand out funds they can’t afford. However, just as governments are addicted to their magic wand – which allows them to issue bonds almost at will – so the people have become dependent on government aid. It’s a vicious cycle.

There are highly capable and extremely gifted entrepreneurs walking the face of the earth that are innovative visionaries. They create value AND add value to the marketplace every single day. We have some very good businesses, led by truly skilled leaders.

Unfortunately, we also have the latter. The rotten apples are impacting and poisoning industries and nations across the board. These include politicians, who have ZERO real world experience and can’t balance a check book; academics, who are tied to their theories more than to reality; or deep state bankers and agents, who are conniving and destroying the work of the people, and want to see win-win scenarios.

In the end, it comes down to financial education and the ability to adapt to the system – without wishing for it to change, in terms of how well our financial situation will be.

If a substantial number of individuals would prosper under the current structure, the middle class would be rich enough that these lowlifes couldn’t mess with them.

Grow richer. That’s the best way to say “F*** You” to every naysayer and any corrupt bureaucrat that made it his life’s mission to interfere the pulse of this planet: people with a purpose to succeed and help others do the same.

Keep hammering it home. Your blowout year is at hand. Keep charging ahead. No one can stop the truly committed who don’t take “no” for an answer.  

Best Regards,

Lior Gantz
President, WealthResearchGroup.com