Well, the thinking goes something like this…
In order to stimulate the economy with consumer spending, the Fed lowers interest rates to a point where it becomes a disadvantage to save money.
They believe people will spend money rather than save it, which should stimulate the economy.
But it never works this way.
The effect of this Negative Interest Rate Policy, or NIRP, means all the money you have set aside for retirement, in any interest bearing account, like savings accounts, money market accounts, or certificates of deposit, will begin to shrink.
Because rather than receiving money on your deposits, you’ll be forced to pay banks to keep money in them.
And this means you’ll have to keep working, rather than retire, because your nest egg loses money every time you try to save more.
When this happens --- it’s game over.
You, and every other American, must work until the day you die, just so you can pay your day to day living expenses.
You don’t think it can happen?
As recently as the end of 2018, many countries including Switzerland, Denmark, Japan, and Israel currently have central bank interest rates set to less than 0%.
Again, I say this as an expert who’s seen these policy decisions made in the past by people who think they know best, but refuse to look at simple historical examples.
They always think, "this time will be different".
But it never is.
You may not think things are too bad right now with the economy, but let me tell you some sobering facts…
Our national debt is exploding.
We're adding more than $1 TRILLION a year to it with no end in sight... and this is with very low interest rates.
When the government is forced to pay higher interest rates just to convince people to lend us money, the new debt could EASILY reach over $2 TRILLION each and every year.
But even more frightening… this doesn’t even take into account the unfunded liabilities and state and local government debt.
What this means is even if every adult were taxed at 100%, meaning every single cent they earn, goes towards our nation’s debt, it would take 20 years to pay off.
But this doesn’t even take into account the additional debt we accrue each and every year, plus the interest which is added.
The fact of the matter is… we will NEVER pay off our debt… at least not in our current economic environment.
The only way the government can ever pay back this crushing debt is to undertake a "controlled" bankruptcy… or to dramatically devalue the dollar.
Either way, the life you’re accustomed to and the retirement you hope for is a distant memory.
Today, the US government owes more money and has more debt than ANY country at any time in the history of the world.
One day, the music will stop… and our economic system will implode.