Now that Jerome Powell’s brief foray into interest rate normalization has been abandoned like last week’s trash, the hope of rational central bank policy and a return to the days of Paul Volcker and fiscal discipline are, sadly, dead and gone.

Sure, we can dream, but there’s no point in hoping on a return to normalcy when government debt notes barely keep up with inflation and frightened retirees are forced to pile into a risky blue-chip stock market that’s old, exhausted, and hanging by a thread.

And while I ought to have expected this, what a strange sight it is to see German bonds (or should I say “bunds”?) yielding practically zero, and the Japanese 10-year note reverting into something I hadn’t seen in a while and hoped would never see again: negative territory.


Are my eyes deceiving me? Is this a fever dream? Nope – it’s quite real, with the first quarter of 2019 marking Japan’s first sustained break into sub-zero rates since the ZIRP and NIRP heyday of 2016:

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    Not that we can really call Japan a pioneer in this area, as The Bank of Japan was only following the lead of a handful of central banks in Europe, including the European Central Bank, which was using negative interest rates back in 2014.

    And still to this day Europe is forging a nefarious path as the world’s foremost rate cutter, with the European Central Bank announcing that it expects its key interest rates throughout the Eurozone “to remain at their present levels at least through the end of 2019.”

    This is all happening amid a backdrop of global economic uncertainty, with European Central Bank President Mario Draghi fully conceding that “sizable moderation in economic expansion that will extend into the current year” and the ECB downgrading its 2019 forecast for eurozone-area gross domestic product to 1.1% from 1.7%.

    Upon this pronouncement, the euro against the U.S. dollar quickly puked:


    But currency trader woes aren’t the headline here: it’s all about easy money for big banks, propping up the stock market, and kicking the can so far down the road that your grandchildren won’t even be able to find it.

    Let’s hand it to the Japanese government, however, for refusing to let Europe outdo them in 2019. They really hunkered down and showed the world who’s boss when it comes to interest rate suppression. Compared to them, America’s two-and-a-half-percent yield looks downright bountiful.

    And so, it looks like the ZIRP Boys are back in town. In their honor, I’ll defer to the great Thin Lizzy:

    Guess who just got back today
    Them wild-eyed boys that had been away
    Haven’t changed that much to say
    But man, I still think them cats are crazy.

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