It’s now cheaper to store bundles of paper money in a guarded vault than to keep them in the bank…
Zero Hedge reports interest rates in Switzerland have dropped so far into negative territory—meaning depositors must pay the bank to hold their cash—pension funds have begun removing their cash from the bank.
Or so they tried.
One pension manager explained the costs of vault storage would save the fund 25,000 Swiss francs per every million francs left in the bank.
But when bank officers learned of his plan, they told him the Swiss National Bank (SNB) would not allow the withdrawal… in the name of “the collective interests of the Swiss economy.”
In other words, central bankers first drove depositors’ interest rates to zero. Then negative.
Now, they’ve prevented depositors from taking their own money out of the bank—without any legal authority to do so.
This situation is unsustainable. It’s a massive distortion of the free market… and distortions always give way in time.
When it does, the action will be explosive.
We can’t know when that will happen. We can only know that it will.
Our advice is more important than ever: Practice appropriate asset allocation. That means divide your wealth across multiple asset classes: cash, gold, real estate, stocks, options, et al.
Keeping all your money in one “safe” place—like in a bank in Switzerland—could be the worst financial mistake you’ll ever make.
If you’ve not done so yet, all paid subscribers should review the PBRG 2015 Asset Allocation Guide right here, right now.