The ZIRP and NIRP Viruses

“The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but actual Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered. ” Thomas Jefferson

Every US president from 1789 to 1913 opposed the unconstitutional central bank, or Federal Reserve.  Then along came Woodrow Wilson and he needed a kickback to pay off campaign debt, and a deal with the devil was struck.

The Federal Reserve has robbed from the poor and middle class and given to the wealthy for over a hundred years.

The latest robberies are ZIRP and NIRP.

ZIRP (Zero Interest Rate Program) is a financial virus, created and distributed by the central banks, that infects savings of ordinary Americans.  Symptoms are:

The ZIRP virus weakens and gradually destroys pension funds. Retirees, beware of this virus!
The ZIRP virus destroys income for personal savers. People saved for decades and now their savings yield little or nothing.
The same has occurred with Insurance companies – they earn little on their bonds compared to what they previously earned.
Governments must (in theory) increase their contributions to retirement plans to supplement the decreased earnings due to the deleterious effects of the ZIRP virus. Consequently some governments are closer to insolvency and should curtail expenditures.  Retirees, this is another warning.

The ZIRP virus is a nasty virus that affects many people, pension plans, insurance companies, and government budgets.  Central banks have concocted this virus and it has infected many pools of savings.

But there are worse viruses than the ZIRP virus.

The ZIRP virus has mutated into a nastier version – the NIRP virus, otherwise known as the Negative Interest Rate Program virus.  Currently over $7 Trillion in sovereign debt has been infected with this virus and the quantity of infected debt increases daily.

From John Rubino:

“Yesterday Japan’s government borrowed money on terms that require the lenders to pay rather than receive interest for ten years.  And not only was that bond issue snapped up, it was vastly oversubscribed.  This raises a lot of questions, the chief being ‘why would anyone voluntarily commit to something that’s guaranteed to lose money for a decade?’

The short, obvious answer is that the world’s central banks are creating so much excess cash that there seems to be nowhere else for it to go.”

The NIRP virus is similar in symptoms and consequences to the ZIRP virus:

Pension funds are destroyed even more rapidly.

Personal savers will, once infected by the NIRP virus, experience the questionable privilege of loaning money to their favorite bank and, if the bank survives, receiving back less than they “deposited.”

Insurance company earnings are hurt by the NIRP virus.  Rates will have to rise.
Many governments, which are already in financial trouble, will increasingly underfund their pension plans after they have been infected with the NIRP virus.

There are other consequences besides insolvent private pension plans, retirees unable to earn enough from savings, insurance companies earning too little, and government pension plans becoming insolvent quicker.

From John Rubino:

The life insurance companies price their policies on the assumption of a 5 to 6 percent positive return on their bond portfolios.  Turn that return negative and all of a sudden the world’s life insurers are either unprofitable or insolvent.  And that’s a big industry.  Look for life insurance policies prices to quadruple.

Pension funds operate the same way, taking in and investing contributions against future obligations.  Many US pension plans are already broke and in a NIRP environment they’ll suffer a mass extinction.

Repeat:   regarding the effects of the ZIRP and NIRP viruses:

Capitalism does not function well.
Life insurance companies become unprofitable or insolvent.
Pension funds: expect mass extinction.
Retirees and future retirees: This is your warning!

However, an even more destructive mutation of the NIRP virus has been sighted and may infect larger pools of capital:

It is possible the NIRP virus will mutate into the NIR-BAM virus.  The Negative Interest Rate with Bank Account Mandatory virus would require that all cash be deposited into bank accounts and that they are “taxed” each year with negative interest rates.  In other words, you can’t win and you must play the game.  The NIR-BAM virus is spreading in Europe and Japan, and a few early signs have been seen in the U.S.  An outbreak or epidemic is possible.

CONCLUSIONS:

The ZIRP virus, NIRP virus, and a potential outbreak of the NIR-BAM virus are destructive to savers, pension plans, insurance companies, economies, and governments who fund pension plans.  These viruses have mutated from QE and central bank diseases, and all the consequences of these diseases and viruses have not yet been fully realized.

Going forward we might expect additional QE, continued ZIRP and NIRP, deflation in paper financial markets, weakened economic activities, a banking system crash, and a renaissance in gold and silver markets as people seek protection from the effects of the ZIRP and NIRP viruses.

Economies could deteriorate further as more capital, people and markets are infected by financial viruses.  Fortunately, gold and silver have no counter-party risk and both are likely to prosper as other investments experience the deadly consequences of the ZIRP and NIRP virus.  Also, gold and silver will help protect savers from the NIR-BAM virus if it becomes an epidemic.

This is all due to the illegal and unconstitutional Federal Reserve (the US central bank).

“You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, I will rout you out.” —President Andrew Jackson, upon evicting a delegation of Central Bankers from the Oval Office

“Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States.”
~ Sen. Barry Goldwater, Republican

It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
-Henry Ford

“The Federal Reserve banks are not government agencies. …but are independent, privately owned and locally controlled mega-corporations.” -Lewis vs. United States, 680 F. 2d 1239 9th Circuit 1982

“The Federal Reserve banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this nation is run by the International bankers.” -Congressman Louis T. McFadden, Republican

“This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President Wilson signs this bill, the invisible government of the monetary power will be legalized….the worst legislative crime of the ages is perpetrated by this banking and currency bill.” -Charles A. Lindbergh, Sr. , Republican, 1913

“When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money.” – Boston Federal Reserve Bank

“We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it.” -Congressman Louis T. McFadden, Republican, in 1932

“The few who understand the system, will either be so interested from it’s profits or so dependent on it’s favors, that there will be no opposition from that class.” -Rothschild Brothers of London, 1863

“While boasting of our noble deeds were careful to conceal the ugly fact that by an iniquitous money system we have nationalized a system of oppression which, though more refined, is not less cruel than the old system of chattel slavery.” -Horace Greeley

“The Federal Reserve bank buys government bonds without one penny…”
-Congressman Wright Patman, Congressional Record, Sept 30, 1941

“…the increase in the assets of the Federal Reserve banks from 143 million dollars in 1913 to 45 billion dollars in 1949 went directly to the private stockholders of the [federal reserve] banks.” -Eustace Mullins

“Our entire financial system has been turned over to the Federal Reserve Board. That Board administers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people’s money” -Charles A. Lindbergh Sr., Republican, 1923

“Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with a flick of a pen they will create enough to buy it back.”
-Sir Josiah Stamp, former President, Bank of England

“All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation.” -John Adams

“Whoever controls the volume of money in any country is absolute master of all industry and commerce.” -James A. Garfield, Republican, President of the United States

“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it’s issuance.” -James Madison

“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs.” -Thomas Jefferson

“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.” -Abraham Lincoln

“Give me control of a nation’s money and I care not who makes it’s laws” -Mayer Amschel Bauer Rothschild, central banker

Despite these warnings, Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote:
“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” -Woodrow Wilson, Democrat

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About avirginiapatriot1776

I hope we have once again reminded people that man is not free unless government is limited. There’s a clear cause and effect here that is as neat and predictable as a law of physics: as government expands, liberty contracts. — Ronald Reagan
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