Rob Roy
Well-Known Member
Submitted by IWB, on April 27th, 2015
Precious Metals Market Update
The Federal Reserve bank and its owners, the largest banks on Wall Street
image: http://images.intellitxt.com/ast/adTypes/icon1.png
, want badly to be able to charge you interest for the privilege of depositing your funds. The problem is getting you to stand for it.
Depositors already complain vigorously about zero percent returns on checking and savings accounts. If they must start actually paying the bank to hold funds on deposit, many will opt to simply withdraw the cash
image: http://images.intellitxt.com/ast/adTypes/icon1.png
and stuff it under their mattress or into a safe deposit box. That simply won’t do.
The Goal Is to Force You to Deposit Cash and Charge You Interest
Bankers in the U.S. can learn something from the Swiss. The Swiss National Bank recently implemented negative interest rates
image: http://images.intellitxt.com/ast/adTypes/icon1.png
without first solving the “problem” of how to prevent cash from fleeing the banks. Predictably, depositors started doing some math.
In one example, a sizable Swiss pension fund
image: http://images.intellitxt.com/ast/adTypes/icon1.png
, calculated it would save 25,000 francs for every 10 million it held in the bank by simply withdrawing those millions and taking the bales of paper francs to be kept in a vault. The vault storage fees are less expensive than the negative interest rate.
Jumping the gun on the implementation of negative rates put the Swiss banks in an awkward situation. Like all fractional reserve lenders, they don’t have anywhere near enough cash to make good on the withdrawals that may be coming. The bank
image: http://images.intellitxt.com/ast/adTypes/icon1.png
holding the pension money had little choice but to refuse the client’s demand for millions of francs – funds the client is contractually entitled to. Telling clients “sorry, you can’t make a withdrawal” never goes over too well!
Nevertheless, the Swiss National Bank is sticking to its guns. It is encouraging retail banks to be “restrictive” with regards to cash withdrawals. And it is berating actors such as the pension fund for trying to circumvent negative interest rates
image: http://images.intellitxt.com/ast/adTypes/icon1.png
. Apparently no one should be questioning the wisdom behind the policy! But the bluster isn’t hiding the fact that bankers stand upon shaky legal ground. The potential for a run on the banks remains.
==============================================================================
So who thinks that cash will survive? What is money?
Precious Metals Market Update
The Federal Reserve bank and its owners, the largest banks on Wall Street
image: http://images.intellitxt.com/ast/adTypes/icon1.png
, want badly to be able to charge you interest for the privilege of depositing your funds. The problem is getting you to stand for it.Depositors already complain vigorously about zero percent returns on checking and savings accounts. If they must start actually paying the bank to hold funds on deposit, many will opt to simply withdraw the cash
image: http://images.intellitxt.com/ast/adTypes/icon1.png
and stuff it under their mattress or into a safe deposit box. That simply won’t do.The Goal Is to Force You to Deposit Cash and Charge You Interest
Bankers in the U.S. can learn something from the Swiss. The Swiss National Bank recently implemented negative interest rates
image: http://images.intellitxt.com/ast/adTypes/icon1.png
without first solving the “problem” of how to prevent cash from fleeing the banks. Predictably, depositors started doing some math.In one example, a sizable Swiss pension fund
image: http://images.intellitxt.com/ast/adTypes/icon1.png
, calculated it would save 25,000 francs for every 10 million it held in the bank by simply withdrawing those millions and taking the bales of paper francs to be kept in a vault. The vault storage fees are less expensive than the negative interest rate.Jumping the gun on the implementation of negative rates put the Swiss banks in an awkward situation. Like all fractional reserve lenders, they don’t have anywhere near enough cash to make good on the withdrawals that may be coming. The bank
image: http://images.intellitxt.com/ast/adTypes/icon1.png
holding the pension money had little choice but to refuse the client’s demand for millions of francs – funds the client is contractually entitled to. Telling clients “sorry, you can’t make a withdrawal” never goes over too well!Nevertheless, the Swiss National Bank is sticking to its guns. It is encouraging retail banks to be “restrictive” with regards to cash withdrawals. And it is berating actors such as the pension fund for trying to circumvent negative interest rates
image: http://images.intellitxt.com/ast/adTypes/icon1.png
. Apparently no one should be questioning the wisdom behind the policy! But the bluster isn’t hiding the fact that bankers stand upon shaky legal ground. The potential for a run on the banks remains.==============================================================================
So who thinks that cash will survive? What is money?
![13141804009ztT7j[1].jpg](/data/attachments/2507/2507336-725be32ed151c551fcff684e340a1b4f.jpg)
