“Rates will stay low, very low, for a long period of time and well past the horizon of our purchases,” Draghi declared. “From today’s perspective and taking into account the support of our measures to growth and inflation, we don’t anticipate that it will be necessary to reduce rates further.” The ECB cut its main interest rates to new record lows on Thursday as they continue to move into negative territory without a clue as how to reverse the trend. Beginning in April, the ECB will buy €80 billion euros worth of bonds each month, which is an increase from the €60 billion euros presently. Draghi will keep the stimulus program running at least until March 2017. However, while he thinks simply lower interest rates will entice people to borrow, he fails to see the other side of the coin that is spinning.

Beginning in April, the ECB will buy €80 billion euros worth of bonds each month, which is an increase from the €60 billion euros presently. Draghi will keep the stimulus program running at least until March 2017. However, while he thinks simply lower interest rates will entice people to borrow, he fails to see the other side of the coin that is spinning.

Lower rates rob savers of income, destroy pension funds, and leverage the debt to a dangerous level when the trend changes. People will not borrow or spend when they have no confidence in the future and businesses will not hire or expand. You cannot stimulate the economy with lower rates while crushing it with taxes.

It is true that the economic community was expecting a rate cut and more asset purchases of government debt. However, the ECB went further this time by saying it will start buying debt issued by companies as well as governments. While that is an improvement for corporations, whom typically have to pay back their debt unlike government, there is a dark cloud behind this statement. The debt they will buy, according to reliable sources, will be riskier debt of entities (banks) that are in trouble.

Nothing these people can do will ever reverse the trend. They raise taxes to cover their fiscal mismanagement and then “stimulate” by employing monetary theory. They will never resolve the problem and this entire crisis will go into meltdown since governments only borrow more and never reduce debt. They have become victims of their own ignorance.

Beware of the IMF. They are seeking to emerge as the leader of a new one-world currency system.

Bavarian banks have figured out that negative interest rates are insane. They must pay the ECB to hold their cash. They have decided it is better to store their cash and eliminate deposits at the ECB as reported by Spiegel Online. These people are just brain dead. They think negative interest rates will somehow “stimulate” the economy. No, they

Moody’s lowers outlook on China’s credit rating to negative from stable. We have been warning that our models on China indicate that the bottom in the economy does not appear likely until 2020. This should be a 13 year contraction. So far that forecast appears to be on target.