When Saving Interest Rates
Go Negative
What is more frightening, then the loss of your money. Since most people
have, some meager amount held in some form of a financial institution, the prospect of the banksters' cabal placing a charge
against your account for the mere privilege of maintaining a deposit, is horrible. The Business Insider warns, In The Future, You May Have To Pay
The Bank To Hold Your Money, and raises a very dreadful prospect.
"In recent weeks, economists have discussed the idea
of how to implement a negative interest rate while preventing people from hoarding paper currency. Economist Miles Kimball has discussed creating an electronic currency and having an exchange rate
between it and dollar bills. Others have discussed going cashless and eliminating paper currency altogether."
Negative interest rates simply mean it will cost you, in fees or service
charges, to hold money in banking accounts. Examine Professor Kimball’s ivory tower justification for seizing the value
and purchasing power of your savings.
Now dig deep into the mind of a mentally ill pseudo intellectual to see just how
far from rational money policy such monetary eggheads go to provide cover for the fractional reserve central bankers.
"If we repealed the "zero lower bound" that prevents interest rates
from going below zero, there would be no need to rely on the large scale purchases of long-term government debt that are a
mainstay of "quantitative easing," the quasi-promises of zero interest rates for years and years that go by the
name of "forward guidance," or inflation to make those zero rates more potent."
This threat is a continuation from the initial trial balloon that appeared
in the Financial Times. A video rant about, Banks to Start Charging You on Deposits, goes ballistic with outrage that the money-centered banks are emboldened
as to telegraph their intentions of raiding the nest egg savings of depositors. While the justifiable emotion is understandable
for a beleaguered public, the economic aftermaths of interjecting massive QE reserves is explained well by Zerohedge in recent reports with the accompanied chart.
"Furthermore, contrary to what the hypocrite banker said
that "the danger is that banks are pushed into riskier assets to find yield", banks are already
in the riskiest assets: just look at what JPM was doing with its hundreds of billions in excess deposits, which originated
as Fed reserves on its books - we explained the process of how the Fed's reserves are used to push the market higher most
recently in "What Shadow Banking Can Tell Us
About The Fed's "Exit-Path" Dead End."
What the real danger is, is that once the Fed lowers IOER and there is a massive
outflow of deposits, that banks which have used the excess deposits as initial margin and collateral on marginable securities
to chase risk to record highs (as JPM's CIO explicitly and undisputedly did) that there would be an avalanche of selling once
the negative rate deposit outflow tsunami hit."
Hence, this move to prepare the bank customer for
another hosing by imposing negative rates actually is a desperate attempt to keep the derivative "day of reckoning"
from hitting. This strategy will not work. In the Negotium article, Low Interest Rates
Impoverish Savers, makes the point: "Designed lowering of our standard of living
is visible at every turn. The money-centered banks recapitalized their balance sheets at the expense of the passbook accounts
customers." With
the expectation that bank accounts will actually experience debit fees for parking money will result in a massive outflow
of capital. Where will the money go? Will the banks allow the return of your deposits in cash or will they impose significant
costs and delay withdrawals?
Consider that under a banking system, which
automatically reduces your balances, the acceleration of stripping your net worth goes into high gear. No sane individual
would accept this theft willingly. However, the transition to a cashless economy might well inflict a call back of cash (Federal
Reserve Notes) in circulation for an enforced substitute legal tender. Or else some variation of the "killer" Kimball
electronic compulsory account may be imposed under strict governmental supervision.
Under
such a circumstance, the mandatory medium of exchange strips all personal ownership from the individual. Money, in whatever
form it takes, no longer will be your own property.
Negative interest
rates institutionalize systemic inflation into every transaction. Throughout history, usury is condemned for charging interest
on lending. What term should be used for paying no interest on capital saved? Anthony Migchels argues in Our Chains are Forged
by Usury, that the objective is to create an interest-free money supply. Much
like the Kimball electronic currency, the Migchels alternative resides in his own twisted hermitage, read accordingly. "The problem is not the creation of money! Quite the
opposite: it's marvelous that we never need to have a shortage of money. The problem is when the bookkeeper starts raping
the debitor with interest for no other reason than the associated minus."
While
debt is the central issue in all financial bubbles, the solution is not to destroy wealth creation through capital saving.
Until a universal model of wizardry or alchemy is adopted that creates a stable store of value, independent from work, ingenuity
or greed; expectations of an interest free currency are pipe dreams.
The
benefits from negative interest rates all go to the banksters. The borrower never sees FREE interest loans, nor does the saver
earn a fair rate of return. The maxim remains, Those with the Gold, Make the Rules, is no different in the age of
the New World Order of central banking. Starving the saver is negative for the rest of us.
James
Hall – December 4, 2013
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