My head hurts every time I look at this table of global interest rates. Above is a list that shows the insanity of central bankers around the world. Now, I have the ultimate respect for anyone who can maintain conviction when an investment hypothesis goes in the opposite direction than initially thought. Being wrong is a common outcome when dealing with an unknowable future. Like baseball, a few strikeouts is part of the process to your next hit. However, just standing in the batter’s box randomly swinging is not acceptable. This is what many central bankers are doing with their negative interest rate policies. The notion of moving interest rates around to simulate investment is absent of one key ingredient……if I have zero confidence in investing my money in other stuff, central banker’s moves will do nothing to simulate. In fact, it is has been fairly obvious to every real-time money manager (and not the central-bank/academic money manager) that negative rates actually make the velocity of money contract rather than expand. This is so damaging at this point, I feel sorry for the citizens of Europe. I am honestly not sure what are the long-term, negative consequences of these policies. Decades of financial pain and turmoil at best and complete civil unrest at worst are a few scenarios. The stability of the European banking and pension system should be in serious question. Any investor who can willingly deploy capital around the world, is just not thinking clearly if they have money here. This is not a “value.” It is a trap. At least with a carnival barker you know what you get.

Sincerely,

P. Franklin, Jr., CEO

All opinions and estimates included in this communication constitute the author’s judgment as of the date of this report and are subject to change without notice. This communication is for informational purposes only. It is not intended as an offer or solicitation with respect to the purchase or sale of any security. This information is subject to change at any time, based on market and other conditions. Any forward looking statements are just opinions – not a statement of fact.

Investing may involve risk including loss of principal. Investment returns, particularly over shorter time periods are highly dependent on trends in the various investment markets. Past performance does not guarantee future results.