Move Over ZIRP… Here Comes NIRP!

Precious metals prices enter the new week looking to extend the rally that began Oct. 2nd. Silver has gained nearly 10%, and gold is up almost 3.5%. The notion that the Federal Reserve governors may have missed their window to raise interest rates is beginning to sink in with investors.

In fact, if the U.S. economy should fall into recession, investors may see central planners move from zero interest rate policy (ZIRP) to the launch of negative interest rates.

The minutes from the most recent Federal Open Market Committee meeting reveal Janet Yellen and company are looking to the socialists in Europe for ideas, and central bankers there have already experimented with negative interest rate policy (NIRP).

Bottom line: You should soon expect to start paying interest for the “privilege” of lending your savings to a bank!

This week, investors will be watching reports on inflation, retail sales, and industrial production. The prospect of recession continues to loom larger, despite a small rally in stock prices. For now, investors seem more focused on the delay in hiking interest rates than deteriorating fundamentals

Precious Metals: More Important Than Ever in Your Portfolio

Nobody is talking about it these days, but we still live in an inflationary age. Wall Street is fixated on the possibility of deflation as prices for crude oil fall and headline Consumer Price Index flat-lines. But the wheels of global inflation continue to turn.

Zero interest rates and bond purchasing programs have defined central bank policy for most of the last decade. Central bankers developed these extraordinary programs and sold them to the public as economic stimulus.

It is now clear just how little of that largesse made its way into the real economy. We now know the real purpose of those programs was to stimulate bank profits and boost equity markets.

Meanwhile, government debt and entitlement commitments have only grown larger. That epic problem was top of mind for investors when gold and silver spot prices peaked in 2011. Battles over the debt ceiling and inflation fears captured headlines.