We are
monitoring confidence in the banking system as reflected by cash withdrawals.
The sale of home safes has exploded in many countries. I previously reported
that one in ten currency notes in Switzerland being printed is now
the 1000 franc note. In fact, there is some 41.6 billion in Swiss francs now in circulation in 1000 CHF
notes exclusively.
The ECB is
truly brain-dead for they thought by moving with negative interest rates,
people would spend their money and that would rekindle inflation. They are
correct that people would not want to pay negative interest rates. However,
they totally never guessed that they would withdraw their money and hoard it
rather than spend it. The trend toward hoarding cash really became in 2011. It
started to make the news in 2012. Now the German
savers are buying
home safes as well and pulling out cash. Of course, they attribute this
primarily to negative rates. However, the concerns that Deutsche Bank may be in
serious trouble is also helping matters.
We are
witnessing this trend around the world throughout Asia as well. Japan has been
printing 10,000 yen notes like crazy. The Japanese are also withdrawing cash and
keeping it at home. Even Americans began hoarding cash also back in 2011, which
began to make
news by 2014. In
fact, 43% of Americans keep their savings in cash these days for interest
pays nothing. Yet, an amazing 53% of those cash-hoarders “plan to
hide bills in a secret location at home.”
Everything is
going as our model has projected. The peak in trusting banks and government is
in place. From here on out, all we have is the collapse in public confidence
and the 2016 elections bring that home.
All we are waiting
for now is simply the Crash & Burn. This will be a serious topic for this
year’s WEC in Orlando.
Comments
Cash
hoarding is caused by depositors’ fear that Banks will limit withdrawals
whenever their cash-on-hand is threatened.
They have chosen to ignore their own cash requirements and have too much
tied up in derivatives. The European Central Bank started this by going to
negative interest rates, but this may cause withdrawals that end in a bank
panic. They need to move interest rates back up to zero.
Norb
Leahy, Dunwoody GA Tea Party Leader
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