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One of Germany’s largest banks is about to become a “hoarder”…
Reuters reports 146-year-old Commerzbank AG may soon begin storing billions of euros in paper bills in vaults. It’s an effort to avoid paying negative interest rates on its deposits at the European Central Bank (ECB).
[Negative interest rates mean the depositor must pay interest just to keep his money at the bank.]
The ECB imposed negative rates to encourage banks to lend and “jump-start” the European economy. European banks have 850 billion euros at the ECB… and negative interest rates mean they must pay to keep it there. It’s squeezing profits.
But instead of lending, banks are turning to “hoarding” physical cash…
Commerzbank’s not the first to consider this strategy. The world’s second-largest reinsurance company—Munich RE—started storing cash in vaults earlier this year. But Munich RE stored just $11 million in cash as a “test run.” Commerzbank plans to store billions…
[For perspective, 2 billion euros in 200-euro notes would weigh about 11 tons.]
The Reuters piece goes on to reveal several major European insurers have received inquiries from banks on buying coverage for their own planned cash hoards.
Regular Daily readers know this is the latest salvo in the global War on Cash. Cash is a ready alternative to negative interest rates and central bank manipulation. And that’s why they now say cash must go…
The ECB just shuttered production of the 500-euro bank note. And former U.S. Treasury Secretary Lawrence Summers has said it’s time to end the $100 bill. All around the globe, cash transactions are under attack…
Bottom line: You can be certain Commerzbank’s move has only hardened central banks’ (like the ECB’s) resolve to ban cash as soon as possible. Our advice remains the same: Stay long gold as a chaos hedge. And pull some physical cash out of the corrupt banking system now.
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