It's on... it's on like Donkey Kong! On Jan. 29 Japan crossed the Rubicon and it is now only a matter of time before the entire world follows suit in setting their bank lending rates to negative.
Perhaps you would ask why the hyperbole over the Bank of Japan's radical move, which just a few weeks ago was something Kuroda promised wouldn't take place. It is because of this sudden shift out of nowhere by the 3rd largest economy in the world that will make all nations, including the top two economies (U.S. and China), think long and hard on instituting this themselves as the global currency war moves into its final phase.
The negative interest rate is, in effect, a tax on financial assets, and not the BoJ’s intention. This could lead to an opposite outcome to that of the initial intention, whereby the country encourages companies and households to engage in capital outflow.
It is that last bullet point which is most important because it leads us to the most disturbing topic of all for Japan - the risk that NIRP backfires and leads to another "China", where the local citizens rush to park their assets offshore, resulting in a slow at first then rapidly accelerating capital outflow.
This is how DB explains it: If the negative interest rate continues for longer or goes deeper, commercial banks may have to set negative interest rates on deposits, which would expand not only the tax on commercial banks, but also on depositors (households and companies). This could lead to a ‘silent bank run’ via a shift of deposits to cash (banknotes), which in turn damages the sound banking system by enlarging the leakage of funds from the credit creation mechanism in the banking system. - ZerohedgeNegative interest rates in a nutshell means that it pays companies and individuals to borrow and spend, but you lose money by saving and holding cash in the currency of a nation who has these rates in place. For example, keeping you money in a savings or checking account, in a CD, government bond, or any interest bearing asset will cost you money instead of earning it. And on the flip side negative interest rates encourages people to go more into debt to purchase goods and services in an attempt to artificially stimulate the economy.
Another vastly important financial relation to negative interest rates is what is known as capital flight, meaning people no longer want or trust their own currency and will seek to put their money into assets denominated in a different currency. This is why the dollar is so artificially strong (99 on the dollar index) compared to all other currencies, because investors have been fleeing their own markets to put their money into something where they don't expect to earn them a return, but simply to not lose anymore of their wealth and value.
However, the real safe haven for currency destruction and unsound monetary policy is and always has been gold, and this has been validated over the past 12 months as big investors, hedge funds, and savvy savers have been buying it by the truckload at historically low prices (adjusted for inflation), which has been creating shortages all across the world. And now that Japan has become the 'first one out the door' in the final and ultimate destruction of their currency, it will not be too long before the Japanese people (along with each subsequent nation who implements negative interest rates), discovers that their only real protection is to get rid of their cash and move it into physical gold.
So as the world's central banks begin to fully cross the Rubicon (point of no return), and place your bank accounts and savings at extreme risk, how can you protect yourself from your country's NIRP policies and the potential capital controls that will disallow you from getting your cash into something valuable (like gold) in the near future?
You can do this with a company called Karatbars
Buying gold through Karatbars is one of the easiest things on the net. In fact, the business model of Karatbars is to sell gold in affordable quantities, such as 1, 2.5, and 5 gram increments, and allow customers to get into the metal without having to shell out $1200+ for a single ounce coin.
And as added perks to signing up with Karatbars, as a customer or affiliate, Karatbars is working on a new e-wallet system that functions just like an offshore bank account, and is outside the authority of the banking system. From there, you can take your fiat currency in any denomination... dollars, euros, yen, etc... and purchase physical gold which can either be delivered directly to you, or stored for free at one of Karatbar's vaults.
Additionally, any gold that you buy can easily be sold back to Karatbars, or any metals dealer, and if with Karatbars it is then exchanged for currency that is uploaded to you through a pre-loaded debit Mastercard which is connected directly to your e-wallet. And as we know, MasterCard is recognized in nearly every country around the world, and usable in any currency that accepts it.
But perhaps the best feature with Karatbars is their affiliate program, where you can earn money off commissions from getting others to sign up and become a customer or affiliate. Not only do you receive commissions from their purchasing of physical gold, but you also earn commissions from anyone who buys a commission package, with that money going directly into your debit MasterCard when you have enough units to cycle.
Imagine the ability to earn the money in which to buy your gold savings simply by purchasing a commission affiliate package one time, and then getting others to sign up and do the same thing.
How many businesses or entrepreneurs can build an infinite business with spending less than $400 of their own money? And there is never a mandatory requirement to buy beyond what you desire, on your own schedule. And there is nothing to lose, because you're using money (paper dollars) to buy gold (physical money) and in the end you don't lose a thing.
The global financial system, along with dozens of respected economists, are telling us that now is the time for the end of our current form of money, and the beginning of the transition into a new monetary system that is expected to be backed by gold. And with banks, governments, and even Harvard professors mandating that central banks have no choice but to eliminate cash from usage by the people to stave off collapse, will you wait until it is too late to make a decision on how you will protect your wealth, and be able to function within the coming new monetary system?
To learn more about Karatbars, you can contact the individual who sent you this article, and click on their referral link to open a free account and begin buying, or building your own gold savings or business with the company of the future.