Re-posted August 20, 2014
Meteorologists (and insurers) speak of the 1 in a 100 year flood. But what is happening in western economies (and Japan) is not even close to a 1 in a 100 year event. It has not happened in centuries; and, I would argue human civilization hasn’t experienced the sort of monetary conditions we now bear witness to. How and when it all ends, no honest person knows. But I strongly suspect that when it ends, it will end badly.
Here is what’s happening: Holland Interest rates are lower than any time in 500 years. That’s right -in 500 years, Dutch interest rates have never been lower. That history covers the Tudors, the Dutch 80 year War of Independence, 30 Year War (a war which claimed the lives of 25 to 40 per cent of all Germans and Bohemians), Tulip mania (and bust), three Anglo Dutch wars, the simultaneous South Sea & Mississippi bubbles, 7 Year War, empire building in the Dutch East Indies, American & French revolutions, Napoleon (when Dutch interest rates hit an all-time high), 19th century peace & prosperity, 20th century wars and Depression. Yet in our very own time, in 2014, Dutch interest rates have never been lower.