German Response to Negative Interest Rates: Safe Deposit Boxes
By Paul-Martin Foss
Carl Menger Center
March 19, 2016
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The Japanese response to negative interest rates was to buy personal safes. The German response is to pull money out of bank accounts and stick it in safe deposit boxes. Both are perfectly understandable reactions to the prospect of having to pay interest to a bank for holding deposits.
It is particularly interesting in Germany, where the Bundesbank a few years ago admitted that the average real rate of return on savings deposits has been negative for nearly the past 40 years.
Now that nominal rates have turned negative too, the facade of savings accounts as a safe place to park money to earn a little bit of income has finally been ripped away.
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Wow, I stumbled across this when I was reading. What an admission!
I “know” that the FED (The Federal Reserve Bank is a misnomer. IT ain’t “federal”. It reserves nothing. And, it ain’t a “bank”. It is a private cartel of the elite banks run for their benefit and that of the entrenched politicians.) runs the printing press and adds electronic digits as it “needs” to. That continually robs “We, The Sheeple” of their purchasing power.
Now with “nominal interest rates” near zero, I would think that people would be waking up to the scam.
This statement really rubs everyone’s nose in it. And, like <synonym for excrement>, it’s a very unpleasant experience.
So what is Joe Sixpack to do?
Clearly “savings” are being silently, quietly, and invisibly taxed aka stolen away.
You can’t even calculate how much of Joe Sixpack’s earnings are being stolen.
The sadder part is that Joe doesn’t even realize that he’s been robbed.
Even most sad about the whole thing is that all the Joe Sixpacks are suffering from the same lack of realization.
Buy assets, bullion, or even bullets. Anything to preserve value.
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