Robert Fitzwilson tells King World News:
“...As we discussed last week, fixed income prices and interest rates act in opposite directions. Just like a seesaw, one goes up and the other one goes down. The FINRA announcement could very well be a critical “tell” as to the direction of interest rates. If they are issuing a warning, it could very well mean that the zero-interest rate policy (ZIRP) is finally coming to an end.
"It makes sense. We have been arguing that ZIRP was devastating savers and retirement funds. Retirees and participants in 401K-type plans have been depleting their accumulated balances prematurely. Pension and endowment funds have been earning returns that will cause huge shortfalls or require huge contributions from their sponsors if continued for much longer. For example, the two major California public retirement funds, CALPERS and CALSTRS, recently announced horrendous actuarial shortfalls.
"If we make the assumption that governments and central banks are operating from a plan, the timing is correct. Stocks, bonds and housing have been juiced as much as monetary policy tools can be expected to achieve. The global banking system has been stabilized after the 2008 meltdown. Through massive purchases of toxic assets by governments and central banks from the so-called private sector banks, losses have been sterilized and the system reliquified. Rates were driven to historic lows to allow homeowners to ..."