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ECB Cuts Deposit Rate To Negative For The First Time Ever
Congratulations Europe: you now get to pay your insolvent bank to keep your deposits for you. Today's cuts summarized and largely as expected:
- Main Refinancing Rate cut by 10 bps to 0.15%
- Marginal lending facility cut by 35 bps to 0.40%
- Deposit facility rate cut by 10 bps to -0.10%. As in negative. As in deposits are now charged a fee.
And the ECB leave with the cryptic: "Further monetary policy measures to enhance the functioning of the monetary policy transmission mechanism will be communicated in a press release to be published at 3.30 p.m. CET today."
The full announcement:
At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:
- The interest rate on the main refinancing operations of the Eurosystem will be decreased by 10 basis points to 0.15%, starting from the operation to be settled on 11 June 2014.
- The interest rate on the marginal lending facility will be decreased by 35 basis points to 0.40%, with effect from 11 June 2014.
- The interest rate on the deposit facility will be decreased by 10 basis points to -0.10%, with effect from 11 June 2014. A separate press release to be published at 3.30 p.m. CET today will provide details on the implementation of the negative deposit facility rate.
The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today. Further monetary policy measures to enhance the functioning of the monetary policy transmission mechanism will be communicated in a press release to be published at 3.30 p.m. CET today.
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Wait until the Fed does this.
...and here's the real reason why Draghi needed to cut rates today...
https://www.youtube.com/watch?v=zV3UuMOfiaQ
And, this is the type of trend that could spur crypto-currency use...
Sell on the news!
Cause the ECB has reached the end of their rope now.
nah, it's only for nerds. Normal people will never use it.
People are just sheep, they'll do absolutly nothing and continue to allow it.
Sheep= Debt Slaves. They rejoice in the theft.
Rally on! It's all Bullshit!!!
What bothers me about all this shit is this:
1. We all know we won't get the pensions like our parents get/got.
2. They told us: YOU BETTER SAVE MONEY FOR YOUR RETIREMENT BOYS!!!
3. And now... saving money is countered...
the pensions won't ever be paid and everybody get's taxes more on savings every day...
And nobody revolts. I don't really care, I've got the gold and silver to have a very good pension especially when everybody else will have nothing. But still... WHY DO I PAY 55% ON MY INCOME AND 21% ON WHY I BUY IF I GET NOTHING IN RETURN!!!!????
Yes, seems a bit counter intuitive doesn't it. When the banks see an outflow of deposits and have capital shortfalls disaster looms. But what the fuck do I know?
Keynesian endgame is interesting to watch.
They can only steal as long as there are savings. (Neg. rates will hasten the depletion of savings, it's crazy). Then, the debts go bad, anyway.
nah, it's only for nerds. Normal people will never use it.
People are just sheep, they'll do absolutly nothing and continue to allow it.
And nobody revolts. I don't really care, I've got the gold and silver to have a very good pension especially when everybody else will have nothing. But still... WHY DO I PAY 55% ON MY INCOME AND 21% ON WHY I BUY IF I GET NOTHING IN RETURN!!!!????
"Talking loud & Sayin' nothing..."
-James Brown-
The interest rate on the deposit facility will be decreased by 10 basis points to -0.10%, with effect from 11 June 2014. A separate press release to be published at 3.30 p.m. CET today will provide details on the implementation of the negative deposit facility rate.
Wait until the Fed does this.
If this is comparable to the Fed charging interest on excess reserves, excess reserves which were placed in the banks' accounts by the Fed in the first place, then yes, when the Fed does this, this will be the signal. I've been waiting for this obvious sign of desperation for years now. We have had negative real rates for some time, partially hidden behind false inflation statistics. Reality keeps intruding.
Governments desperate for revenue = economy desperate for activity = central banks desperate for Money Velocity. How's "charging you to save" sound?
-.10 = the snow flake that triggers an avalanche.
DAX should break 10,000 today on this news. Nobody is selling it.
And now we wait for the consequences
Go for it you desperate clowns.
I guess Europe is in a depression.
It's been in a depression since 2007
And new highs....makes sense
https://www.youtube.com/watch?v=LAf0QnLFS7Q
Pulling out all the stops to get savers to become speculators.
Central banks sure do suck.
why pay interest when you can charge it.....
Draghi convinced the German gov that destroying the € would be good for exports. Hence the neg deposit rates. This follows a European parliament campaign that was waged on the message: € stabilitiy as a chance for the middle class. Another false lie.
Wonder when Germany and Russia will tie the knot.
This is of course bearish for gold
Everything is bearish for gold nowadays. The FED tells their "primary dealers" to sell paper gold to keep the price down on purpose.
The FED wants no one to save and everyone into stocks.
Deposit outflows will accelerate.
This should be our que to fill the mattress
yeah, i guess they WANT bank runs
Runs are a good excuse for banking holidays.
I wouldn't be surprised if deposit withdrawal limits or some other similar capital control is announced at that 3:30 sentencing. I only hope we get to see more plywood guillotines!
Edit: Potentially erroneous comment. So is this rate just negative for member bank deposits at the ECB? or does this carry over to individuals' deposits at branch banks? I haven't really read an artilcle that made that clear yet.
in any case, it was clear that gold would react negtively (although I'm not sure why this should happen with lower rates--stronger dollar?).
And gold gets hit... Makes sense!?!
first they sell euro for dollar and then buy gold with dollars.
Wait isnt the ECB is already buying US treasuries via Euroclear in Belgium ??
it would be hard to conceal. the ECB get's audited, you know? shocking, yes. imho this is either Russia or the FED
Buy Silver and keep it hidden. The cost to the saver = zero. The benefit to the saver = priceless.
http://www.silverdoctors.com/spanish-mattress-firm-to-sell-model-with-bu...
Why -.10% not go all in and make the rate -100%
BANK RUN BITCHEZ"S
If, after this, there aren't mass bank runs, then we know 'Their' future plans will never come up against any meaningful resistance. Gold n Silver Bitchez...
And when will you receive interest when you take a loan?
Seems just fair to me also...
In the beginning when Ireland joined the Euro, they did just that. You could loan 60.000 euro's without interest per person and when you invested it in whatever, you could downpay it with the interest.
Needles to say most people bought cars with that money and the investment culture didn't really took off but I still think it was a good idea.
SD, you aren't a bank, are you? so those negative rates don't apply to you
Ireland? do you remember the Anglo-Irish bank tapes?
Yeah, how long do you think before it will be passed to their customers??
Do you really think banks will allow depostis and give interest while they need to pay for deposits?
Really?
Do you really think they don't pass the buck? Have they ever not passed the bill to the consumer? Ever?
they will just not deposit the money in the ecb and put it on sovereign debt, cheap finance for eur gov now.
of course not. they are on the drip. they need healing, which means time
funny shit.
give it to me now. ALL CASH BITCHEZ!
Another step closer to the abyss
Wonder what axel weber thinks? Occupation is a bitch
and despite the fact that every single person not living under a rock the past month plus, and algo knew this was going to happen, the '' markets'' go higher as if they r surprised this happened and it wasnt factored in
Look for the Spanish economy to improve as secure mattress ( mattress with built in safe) sales skyrocket.
http://www.silverdoctors.com/spanish-mattress-firm-to-sell-model-with-bu...
Please explain how NIRP helps the enormous capital ratio issue at Euro banks? Am wondering in this unicorn world whether the ECB feels that having loans on bank books that can ignore marking to market are more fungible, flexible and convincing to play wth in another downturn than cash which is hard to count any other way than "cash".
simple: it doesn't. though I have to note that while the capital ratios of eurozone banks don't look the way I'd wish, most of those comparisons with non-eurozone banks have one fault in it: eurozone banks, generally speaking, lend way more directly to businesses, instead of packaging bonds and setting up IPOs
and this has something to do with the fact that the eurozone's economy is way less "financialized", more based on SMEs which aren't on the markets
if you take in this, suddently the average eurozone bank's business looks way different
Ah yes, that's why Draghi is also announcing ABS purchases. Because there is no financialization.
EVIL.
This helps the poor and middle class how, exactly?
Also known as a bail in.
They'll become less poor then their neighbours...
Depostits at the ECB were already very low so the negative deposit rate won't matter a lot.
It is just psychological.
It's not much if you have to pay 0,1% on 1000 euro's
it's a bit more if you have to pay it on 1.000.000 euro's...
A shitload more if you have to pay it on 1.000.000.000 euro's....
so... think big and than a meager 0,1% become horrific.
negative intereest rates...what?????????????
There's an exit from all this.
https://bitcoin.org/bitcoin.pdf
Honest money for the peasants by the peasants.
Silver just got a major woody.
Same with gold.
What does this really mean? Is this what banks have to pay the ECB for deposits?
I'm guessing the masses will decide to store their wealth in real estate... which will make it even more unaffordable for the next generation, sparking a huge revolution!
When growth is dead the only way to keep the system going is to eventually embrace the shrinking. That is what negative interest rates do.
For those who wonder why I am so critical on the Russian military moves, or various attempts to paint propaganda pictures that justify military moves, one of the reasons is here in this article.
1) Collapse of the corrupt banking regimes in Europe and the US via monetary and fiscal collapse are already the inevitable outcome. This Negative Interest rate policy is case in point. On one hand you could say that they have discouraged savings. But on the other it would be more ACCURATE to say that they have discouraged savings in FIAT CURRENCY.
These regimes are their own worst enemies in this regard. These regimes WANT WAR because it promotes fear. Fear promotes irrationality. Irrationality and momentum are the only things keeping them afloat. First lesson of strategy - give your opponent what we wants only when his desires are destructive.
2) Killing people, or even threatening to kill them, is bad. War is not the glorious enterprize that militaristic elites and naive populists believe it to be.
3) A simpler, cleaner solution is available that lacks all the violent blowback from future generations that military conflict brings: Sell fiat Currency, Buy Gold.
That's it. Nothing more is needed to collapse the banksters scheme.
The banksters' Center of Gravity and Decisive Points are in their control of the issue of FIAT CURRENCY. War promotes fiat. Gold defeats fiat.
Get it?