Absolutely. It could go at any time, and for the slightest of reasons. Its built on trust, which is a very fragile thing.

Another reason is that the average person in Europe is poor relative to middle class Americans. In blissful ignorance, they toil to support government, and if they are ever able to purchase a home, it will be tiny by American standards.

If B of A charged me for keeping money in my checking or savings account, I would just NOT keep much money in there. Right now they charge me $12 a month to even have a checking account, and the government is inflating the money supply to the tune of 10% a year (at least). So negative interest rates just add to that. As a result my reaction is to take it easy and not work as hard to get more money than I actually need now, keep little money in the banks, and buy silver and gold as a store of value.

all of these shenanigans and talk of improving economic conditions is going no where as far as i am concerned. i believe the initial down turn in the economy of the world was actually started when the us government started raising corporate taxes in the 60's and that caused manufacturing companies in the usa to start moving out of the country. the long term affect of these actions grew year after year and eventually the usa as we now know has a greater number of non-working people than working people. as buyers, we were and i guess still are the largest buyers in the world but those who can afford to buy with surplus funds has diminished considerably over the years. the overall affect has effected the world economy in as we know in a negative way. the wealth of europe is pleased to pay the banks in denmark to hold their money for them. they can pay me too. when the down turn doesn't stop denmark will be just as hurt as the rest of the world. without people being employed there is nothing for anybody.

Trump also said it, but HE was denigrated for uttering such blasphemy.

"the only reason all these European Democracies can afford all these social programs is because the American taxpayer is keeping the Russian Bear from devouring them."

Precisely. This was pointed out in another post months ago (search apparently isn't constrained to the Gulch so I couldn't find it).

Wait till the Muslim migration really hits Denmark.....Their social program costs will explode. As will crime. Bottom line here.....the only reason all these European Democracies can afford all these social programs is because the American taxpayer is keeping the Russian Bear from devouring them. Unfortunatly is seems they will commit suicide by swallowing enormous amounts of war refugees from the middle east. These people will not assimilate and will suck Europe dry and eventually...through birthrate, turn Europe in to the same kind of Muslim hell hole they just escaped.

If they are the ones artificially creating and manipulating the "value" of the products they buy and sell, can you see how that is theft? Many of the derivative products aren't really actual assets or claims on assets - they are completely fabricated.

"It's a gang of thieves who rig the system to steal returns from productive people and businesses, especially upcoming small businesses who would be competition for the existing power structure businesses."
I just don't get how they're doing this. I get what jbrenner said about bailing out risky loans: the money from the bailout comes from people who succeeded and flows to people who made bad deals. I do not get the "looters rig the system" thing. If I take equity as payment, you don't think that's rigged. If an older person who's had success wants to provide angel funding, that's not rigged. But it becomes rigged when a large institution does the same thing?

I note your use of the passive voice in "was blamed". There's nothing at all wrong with that, but I'd like to know who is doing the blaming. It isn't me. Speculative mania existed prior to mortgage-backed securities and those measures you mention.

What makes this "stealing" (and your suggestion a good example of what I asked for) is the series of bailouts. I wrote to my Congressman and senators to oppose them. Bankers talked as if their business failing was "the end of everything", imagining that their enterprise to provide capital to worthy projects ceased to exist, worthy projects would cease to exist. In reality someone else would have stepped in to serve those customers if existing institutions collapsed.

Policy makers and financial institutions had gotten themselves in a quagmire IMHO by having money market funds and mortgage securities tacitly backed by the US gov't. If the US gov't is going to guarantee things, it needs to be clear on which things are guaranteed (e.g. MMAs) and which things are not (e.g. MMFs). To me this gray area of being tacitly backed by the US gov't was the problem.

Thanks for those additional details of the legalized looting under cover of "the greater good.".

Depends on whether someone wants to be a looter or a producer, CG. If one is "investing" in products from Goldman then he is supporting the looting system and encouraging the looters to continue rigging the system. There is no free market there, CG. It's a gang of thieves who rig the system to steal returns from productive people and businesses, especially upcoming small businesses who would be competition for the existing power structure businesses. It's a cultural disaster with some of the brightest people using their talents as parasites on producers instead of becoming producers.
The ethical approach is to remove your support from the looter parasitical system and invest directly in the means of production. Its similar to the strike in AS but not taken as far.

The practical example you are looking for was the sale of derivatives called mortgage-backed securities during the 2002 to early 2008 era. This was the "blamed" cause of the 2008 housing bubble collapse.

In reality, the cause was the Community Reinvestment Act, passed by Jimmy Carter. The three congressmen and senators during the 1995 to 2006 era who got political backing to grow the Community Reinvestment Act were Chris Dodd, Barney Frank (as in Dodd-Frank), followed by none other than the community organizer-in-chief, now President Barack Obama, while he was still a senator. President George W. Bush was also much to blame.

A nice summary by someone who formerly was in favor of the Community Reinvestment Act before seeing the light is at:

http://www.businessinsider.com/the-cr...

You had a model with many factors that I was responding to.
I say read what you wrote "I vaguely understand there's more leverage now,but I don't get why"

The reason is that the country is being looted by (your hope and change) govt.waste ,regulations, entitlements.

If you disagree that the squeeze, the regulations the non-productive expenses that I very generally described on small business aren't the reason for your model to be "not working" then.

You should present your evidence.

Can you explain this in a practical case? Consider a typical person with some of their wealth in RE and/or their own business and some of their wealth in financial products. The financial products are some stocks, some ETFs, some old-fashioned actively-managed mutual funds that charge a 1.25% expense ratio. On their financial products, they earn 10% nominal return, 7% real return. They earn more on their RE and business, but it's not quite fair b/c they put more time into staying on top of that.

Are you saying if an investor only invested directly, not through mutual funds or ETFs, they could get more alpha-- a higher rate of return and/or less volatility? I'm trying to understand how their mutual fund, broker, bank, insurance provider is stealing from them. Are you saying the fund managers accept higher multiples that you don't think their future earnings justify? It seems like if there were more alpha to be had somewhere else, people would go there.

"Does your model factor in the govt spending spree that is not productive."
Yes. We had periods of high spending before without ZIRP. Gov't spending isn't good, but it alone does not account for this phenomenon.

Olduglycarl , another thought: low rates have allowed for the greatest looting in the history of the world.

$19,000,000,000,000.00 and still a crumbling infrastructure. A woeful job environment.
Basically pissed away. Or spent to control the individual (security) .It couldn't have happened
If rates were higher.

$100,000,000,000.00 annual interest owed for every .5% increase ---- $1trillion when rates are
At 5%

Banks also manipulate the market, selling to customers "investments" that they know to be poor, some banksters taking the opposite position from the customers that they are supposed to have a fiduciary responsibility to. Then when they are caught in this, they buy con-gress people so they are not punished, and the people they steal from get no restitution. They produce nothing and loot from everyone else using the power of government to protect them from loss. They have been doing this for over 100 years and have created most market bubbles and busts.

Does your model factor in the bureaucracy that is stifling small business. Does your model factor in the govt spending spree that is not productive.
Had the $10,000,000,000,000.00 spent by the looters to mortgage our future been spent on infrastructure or on relaxed taxes and fees for start up businesses the wage growth would happen and less talk about min.wages.
Sadly trillions have been spent on DHS facilities and war games to corral the most irate citizens
That they are supposed to be representing. You all know we're the rest of the take went.

"the entire market is rigged to benefit the banking cartel and the fedgov by stealing from us."
I know of two ways this happens:
1) If you hold cash, it loses value.
2) If you hold other assets and exchange them for cash, it's usually a taxable event, so you end up getting taxed on the inflation.
Are there other ways?

Good for bankers. They can take your money for letting you park it there (savers) AND take your money when you take out a loan. It'd be fair if negative interest rates applied to retail loans. Uh...no...

Low interest rates did not drive up my estate value...you would normally think it would.
The rates are low cause they think that will boost capitalism but it's back firering on them...they also are held hostage by wall street, by being threatened with a crash...hmm...seems to me that wall street did fine when interest rates were 6% plus.

Negative interest rates harms everyone except the borrower. In this case...the banks...how would you like to get paid to take someone's money...the ultimate liberal fantasy...

You are thinking about a free market without Too Big To Fail Banks (who will turn their liability -your asset in your bank account- into their asset to cover their gambling.) This market is manipulated to keep the banks, government, and other non-productive looters afloat while providing nothing to other market participants. This has been the model since 1913 when the federal reserve act was passed at the insistence of the big bankers who designed the act in secret meetings in a mansion on Jekyll Island, GA. The income tax was passed the same year so the bankers would have security on loans (they created from nothing) that were used to finance socialist government programs. The "Great Depression" was caused as a result of these acts stealing from productive people and enriching looters. Under FDR, government restricted banking somewhat as a result by passing the Glass Steagall Act. If they had reversed their corrupt acts of 1913 then the destruction of the dollar would have been stopped, but instead the fed and goverment continued to borrow and interfere with markets. In the late 90s the banking cartel provided funding to candidates to congress and the president and then the corrupt congress gutted the banking restrictions that had previously limited banks from gambling and passing the losses to tax payers by passing the . Gramm Leach Bliley Act which repealed Glass Steagall. See
https://en.wikipedia.org/wiki/Gramm–L...

Bottom line, CG, is the entire market is rigged to benefit the banking cartel and the fedgov by stealing from us.

"The global economy is all a house of cards waiting for the slightest stiff breeze to pass through."
I vaguely understand there's more leverage now, but I don't get why. I don't understand why the same rates we have now appear to have a different effect.

I see borrowing and saving as two sides of the same coin. My accounts at the bank are assets on my books and liabilities on the bank's. My loan is their asset and my liability. My gut feeling is there's just too much leverage. It should be a good thing if people are borrowing to fund good ideas. According to my model, the low rates should be causing people to build businesses that hire people, which causes price and wage increases, which requires central banks to raise rates to maintain a low, predictable rate of inflation. That's not happening, so my model is obviously wrong.

Because their economies are all based on borrowing instead of saving to generate capital. And sooner or later borrowing tails off as those who have the money to invest can no longer find a return sufficient to justify their investment! Not to mention that the currency itself is being inflated to further depreciate the actual value of the investment.

The global economy is all a house of cards waiting for the slightest stiff breeze to pass through.