An empty head is not really empty; it is stuffed with rubbish. Hence the difficulty of forcing anything into an empty head. – Eric Hoffer

They might lose a battle or two, but war is a composition of battles, and when it comes to war, these guys never lose as their principle is simple. Take no prisoners, shoot to kill and ask questions only if the enemy survives the onslaught of bullets.  This would be a good time to read the book “The art of war” by Sun Tzu.

All along we have stated that the world is the midst of a full-blown currency war. Japan just upped the ante by cutting rates into negative territory, and Sweden has driven the knife deeper in by pushing negative rates even lower. In fact, Sweden has stated that they are prepared to do this, till inflation is at the 2% mark. Interest rates are -0.5% currently, so one wonders how low rates will have to drop for them to hit the pie in the sky with inflation target of 2%.

This is going to put pressure on China and other nations will have to take the same route; the velocity of the “devalue or die” currency war game has increased five-fold. It won’t be long before the Fed is forced to take a similar path. Start paying attention to the news, for our central bankers are suddenly going to start listing a slew of factors to backtrack on their claims that the economy was sound. Many Gold bugs have been stating that the central bankers are running out of room to maneuver; this is a pipe dream at best. Look at the stunning rally, the markets mounted when BOJ (Bank of Japan) fired its latest shot. The day the central bankers will run out of ammunition is the day the masses wake up and that day is sadly still a long way off. Central bankers don’t need to continuously lower rates; they can simply flood the markets with money while maintaining an ultra-low rate environment.  What’s another 1-2 trillion dollars when our debt is now over $19 trillion? What has changed between 2000 and 2016? Our debt in 2000 was significantly lower, and it was even lower in 1990; from the 1980‘s the debt has tacked on roughly $18 trillion dollars (illustrated in the chart below) and the masses are still quiet.