Tax & Financial Consulting Services
Are You Happy with 0% Interest for the Next 10 Years?
Karibu (Welcome) G&G Readers,
Last week, interest rates in Germany fell “BELOW ZERO.”
It's true… If you bought a six-month government bond in Germany earlier last week, you'd have to PAY THE GERMAN GOVERNMENT interest.
Unbelievably low interest rates are not just a German problem.
Interest rates are near zero in the world's major developed economies. In Japan, short-term government bonds are paying 0.1% interest. And short-term government bonds in the U.S. are paying 0.01% interest. Yes … read those numbers again!
In short, it is definitely a zero-percent world today. The question is, how long can it last and are you happy with making ZERO on your money?
The answer is… a very long time.
If you need interest income, you don't want to know how long interest rates could stay near zero.
To become a member of the G&G Investment Society newsletter subscription to learn how to take advantage of some of our suggestions so you can protect your wealth and portfolio against a fallen dollar, send an e-mail to GGIS@gngassoc.com and/or visit our website at www.gngassociates.net and click on the “Products & Services” link and we’ll get you signed up right away.
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History Does Repeat Itself
Japan faced its "lost decade" one decade before we did. And its government attacked the problem the same way our government has in the United States, with dramatically lower interest rates and dramatically increased government spending.
Twenty years later, Japan's economy is still not growing. It still has extremely low interest rates. And thanks to all the government spending, Japan now has the world's highest ratio of government debt-to-GDP. (Ominously, Japanese real estate has not started a recovery, either.)
Back here in the U.S., you can hope that interest rates go back up so that you can once again earn income on your savings. Don’t hold your breath !!!
Hope is not an investment strategy…
I personally believe that we have a lot of incredible investment options right now, because of this zero-percent interest policy around the world. But holding cash at the bank and hoping for higher interest rates is not one of those options.
We could have zero-percent interest rates for another 10 years. Japan is proof. And the world is currently following Japan's example.
Interest rates have been at zero since late 2008. It's now 2012. And the Federal Reserve seems committed to keeping them at zero "for the foreseeable future."
Can you deal with zero-percent interest for years going forward? If not, what are you doing to change your strategy?
My goal in 2012 is to find ways to take advantage of this extreme zero-percent world for my GGIS Subscribers. I will share many of those ideas here in the weekly G&G e-newsletter as well.
But it is on you… If you're relying on income, you need consider the reality that interest rates might not go up for longer than is comfortable for you.
You can hope for them to go higher. But you need to do more than hope. You need to make changes… See Quote below.
As always…feel free to pass this information on to anyone you think is interested in increasing their tax & financial IQ.
If you need a one-on-one consultation to learn how to implement these investments or any other on the GGIS portfolio, feel free to contact me to setup an appointment.
If you missed any past G&G newsletters, click on link below for the archive:
Meda Ase p (Thank You Very Much),
Asar Maa Ra Gray
Tax & Financial Consultant, RFC
866-361-3872 toll free fax
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LEGAL NOTICE: This work is based on what I’ve learned as a financial researcher and analyst based SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. It may contain errors and you should not base investment decisions solely on what you read here. It’s your money and your responsibility. Nothing herein should be considered personalized investment advice.