Jim Willie: “A sustained 0% rate kills capital”

Image: chrisroll / freedigitalphotos.net *

“Black Holes in nature occur when a star dies, its mass collapses, to produce a gravitational field beyond what can be managed in a stable system. That star is the USDollar core and revolving USTBond system, which are collapsing.”

“…the global monetary war is in full swing, World War III with the USDollar at the epicenter…”

“The financial press anchors and analysts simply do not comprehend that the USTBond is the final asset bubble, how its rise means the failure of other assets, how the implosion has its epicenter powered by 0% by the USFed itself.”

“Few if any economists or financial analysts seem to comprehend that a sustained 0% rate kills capital.”

“The result overall is a destruction of capital, a retirement of capital, a shrinking of the economic capital base. This is the biggest blind spot in the collection of American, British, and Western European economists.”
Jim Willie CB

Complete article HERE:

Related article:

The Mechanism Of Capital Destruction by Antal E. Fekete, safehaven.com, Oct 18, 2008

A falling interest-rate structure is lethal. It is an insidious destroyer of capital. It means that wealth is stealthily siphoned away from the capital accounts of the producers, in order to enrich the latter-day pirates, the bond speculators who make obscene profits in the falling interest-rate environment.”

“Falling interest rates mean that bank capital has been financed at rates far too high. The resulting shortfall in capital should be compensated in the balance sheet by repeated injections of new capital. If banks fail to do this, then they are paying out phantom profits in dividends and compensation. They pile more losses upon losses. When they run out of capital, as sooner or later they must, capital dissipation stops, for there is nothing left to dissipate. For the banks it means sudden death.”

* Image reference:
http://www.freedigitalphotos.net/images/Blues_and_Violets_g333-Abstract_Background_p33757.html

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