Negative Interest Rates, Recession and Gold

Abstract

What began to unveil in the beginning of 2018 has become a reality since mid-2019: the global economic slowdown. What is unusual is that it is taking place synchronously, similar to the situation during the financial crisis. How could that happen when the central banks have been trying to stimulate the economy with interest rates close to or below zero for years? What is also concerning is how openly the central banks are showing their helplessness. Is this the end of capitalism,as skeptics say, or is this just a short-term dip of endless economic growth? In this first section we want to examine the causes of the economic downturn and explain the consequences for investors.

Keywords: Financialization, debt deflation, negative yields, gold, asset inflation, speculation, capitalism, profit rate, Economic Development Model, Kondratieff cycle

JEL Classification: B52, E31, E51, G01,N45, P34, R31