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NIRP Has Arrived: Europe Officially Enters The "Monetary Twilight Zone"

Tyler Durden's picture




 

Goodbye ZIRP, hello NIRP. Today's decision by the ECB to officially lower the deposit facility rate to negative (as in you pay the bank to hold your deposits) is shocking, but not surprising: we previewed just this outcome precisely two years ago in "Europe's "Monetary Twilight Zone" Neutron Bomb: NIRP"

Here is what we wrote in June 2012 about Europe's unprecedented NIRP monetary experiment.

Just because ZIRP is so 2009 (and will be until the end of central planning as the Fed can not afford to hike rates ever again), the ECB is now contemplating something far more drastic: charging depositors for the privilege of holding money. Enter NIRP, aka Negative Interest Rate Policy.

Bloomberg reports that "European Central Bank President Mario Draghi is contemplating taking interest rates into a twilight zone shunned by the Federal Reserve. while cutting ECB rates may boost confidence, stimulate lending and foster growth, it could also involve reducing the bank’s deposit rate to zero or even lower. Once an obstacle for policy makers because it risks hurting the money markets they’re trying to revive, cutting the deposit rate from 0.25 percent is no longer a taboo, two euro-area central bank officials said on June 15... “The European recession is worsening, the ECB has to do more,” said Julian Callow, chief European economist at Barclays Capital in London, who forecasts rates will be cut at the ECB’s next policy meeting on July 5. “A negative deposit rate is something they need to consider but taking it to zero as a first step is more likely.” Should Draghi elect to cut the deposit rate to zero or lower, he’ll be entering territory few policy makers have dared to venture. Sweden’s Riksbank in July 2009 became the world’s first central bank to charge financial institutions for the money they deposited with it overnight."

There is only one problem when comparing the Riksbank with the ECB: at €747 billion in deposits parked at the ECB as of yesterday, the ECB is currently paying out 0.25% on this balance, a move which may or may not be a reason for the depositor banks, primarily of North European extraction, to keep their money parked in Frankfurt. However, once this money has to pay to stay, it is certain that nearly $1 trillion in deposit cash, currently in electronic format, would flood the market. What happens next is unknown: the ECB hopes that this liquidity flood will be contained. The reality will be vastly different. One thing is certain: inflating the debt is the only way out for the status quo. The only question is what format it will take.

More from Bloomberg:

It won’t help the prospect of a functioning money market because banks won’t be compensated for the risk they’re taking,” said Orlando Green, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. It would make more sense to lower the benchmark rate, thus reducing the interest banks pay on ECB loans, and keep the deposit rate where it is, Green said.

 

The ECB has lent banks more than 1 trillion euros in three- year loans, with the interest determined by the average of the benchmark rate over that period. Societe Generale SA estimates that cutting the key rate by 50 basis points would save banks 5 billion euros a year.

 

The deposit rate traditionally moves in tandem with the benchmark, which policy makers kept at a record low of 1 percent on June 6. Draghi said “a few” officials called for a cut, fueling speculation the bank could act next month.

Sadly, because all this is merely operating in the confines of a broken system, just as the LTRO provides a brief respite only to commence crushing banks such as Monte Paschi, so any further intervention by the ECB will only lead to a faster unwind of an unstable system.

Other institutions have opted against such a move. The Fed started paying interest on deposits to help keep the federal funds rate near its target in October 2008 and has reimbursed banks with 0.25 percent on required and excess reserve balances since December that year.

 

Some Fed policy makers last August argued that reducing the rate could be helpful in easing financial conditions. While they discussed doing so in September, many expressed concern that such a move “risked costly disruptions to money markets and to the intermediation of credit,” the Fed said in minutes published on Oct. 12.

 

The Bank of Japan (8301) introduced a Complementary Deposit Facility in October 2008 to provide financial institutions with liquidity and stabilize markets, and has kept the interest it pays for the funds at 0.1 percent since then. Governor Masaaki Shirakawa told reporters on May 23 there would be “large demerits” to reducing the deposit rate because it could lead to a decline in money-market trading.

It gets worse: by trying to help banks, the ECB will actually be impairng them:

If the ECB cut the deposit rate, it would take an important profit opportunity away from banks,” said Tobias Blattner, an economist at Daiwa Capital Markets Europe in London. By doing so, the ECB would also be “encouraging banks to lend to the real economy” even though “there’s hardly any demand for credit,” he said. Blattner predicts the ECB will cut its benchmark and leave the deposit rate at 0.25 percent.

 

ECB Executive Board member Benoit Coeure said on Feb. 19 that market interest rates of zero or lower “can result in a credit contraction.”

 

That’s because banks, trying to preserve their deposit bases by paying customers a reasonable interest rate, may reduce lending to companies and households because the return is too low and invest in higher-yielding assets instead.

Finally kiss money markets - which together with Repos are one of the core components of shadow banking - goodbye:

“A deposit rate at zero will be of particular support to banks in southern Europe because it could help encourage some flow of credit,” said Callow. “A negative deposit rate can be damaging for money markets.”

 

Negative rates would destroy the business model for money- market funds, which would face the prospect of paying to invest, said Societe Generale economist Klaus Baader.

 

“But the ECB doesn’t set policy to keep alive certain parts of the financial sector,” he said. “Policy makers want to show that they haven’t exhausted their options yet.”

 

 

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Thu, 06/05/2014 - 08:00 | 4826116 J S Bach
J S Bach's picture

Why would anyone ever put money into a bank again if they actually have to pay for the privilege?  The mattress is safer.

Thu, 06/05/2014 - 08:01 | 4826121 SafelyGraze
SafelyGraze's picture

it is your duty, citizen

now sing the anthem and get yourself bailed-in

 

Thu, 06/05/2014 - 08:05 | 4826134 SafelyGraze
SafelyGraze's picture

calling all stars of stage and screen to help raise money for this charity event

https://www.youtube.com/watch?v=LRtq_6DD4Gk

 

Thu, 06/05/2014 - 08:23 | 4826200 Haus-Targaryen
Haus-Targaryen's picture

Bullish for bubbles everywhere!

Thu, 06/05/2014 - 08:29 | 4826221 Peter Pan
Peter Pan's picture

Can someone remind me why is gold paying no interest is a problem?

Thu, 06/05/2014 - 08:32 | 4826227 Haus-Targaryen
Haus-Targaryen's picture

Because look how great the S&P is.  All the smart money is going into the stock market.

Someone taught all those H&R Block morons the saying backwards;

"Buy high, sell low."

Thu, 06/05/2014 - 08:44 | 4826278 BobPaulson
BobPaulson's picture

They are still doing lots on a daily basis right now to push gold down. All the suckers need to be in before you pull the switcheroo.

As for negative interest, it is especially effective anti-Robin Hood tool (rob poor, give to rich) when you force the proletariat to use the banks, since they will naturally opt for the matress if a NIRP world. However, in the new world order, you cannot have a job or buy anything bigger than a can of Pepsi without a bank account. This way the cartels get to skim everybody's savings with their insanely predatory service fees. These fees, by the way, operate like the rules in a Mooney indoctrination camp, by constantly changing so you cannot innovate behaviours to avoid them.

Thu, 06/05/2014 - 09:05 | 4826378 Took Red Pill
Took Red Pill's picture

Yup! Here'a an example of the media attack on gold;

http://finance.yahoo.com/blogs/talking-numbers/gold-is-in-a--death-cross...

Thu, 06/05/2014 - 09:11 | 4826390 SamAdams
SamAdams's picture

Neg rates encourage physcial cash, gold, real estate.  The exact opposite of the end goal.

Thu, 06/05/2014 - 09:37 | 4826515 disabledvet
disabledvet's picture

This is just outright theft now. There is no way to prevent the private sector from being swallowed whole by the Government "automatons."

Capital (gold for obvious reasons...would you keep your gold in your backyard even?) is fleeing Europe...ironically to the USA which at least saw the huge inflation shock coming and tried to do something about it (taper.)

That will not be the EZ...where they never saw a cause to the Third Reich that they didn't like.

Treasuries obviously remain under pressure as there is no way the EU Banks are simply put mDe to be nothing more than shadow vessels for Government policy now.

Thu, 06/05/2014 - 10:30 | 4826722 PT
PT's picture

So how long until I can borrow from the banks at a fixed, negative interest rate?  I got a shitload of stuff to do, I guarantee I can provide jobs for others along the way!

Of course I had to ask!  You don't ask, you don't get ...
... so everyone tells me when I don't ask because they told me not to.  Make up your fucking minds!!! ...

Thu, 06/05/2014 - 10:35 | 4826744 Pinto Currency
Pinto Currency's picture

 

Lots and lost of printed money hasn't work.

Draghi indicates the solution is lots, and lots, and lots of money.

That will work.

Thu, 06/05/2014 - 11:26 | 4826891 tonyw
tonyw's picture

so we get rid of printed money, at least in the shape of cash and you won't have the option of keeping it under the mattress.

also gets rid of the "black market"

Thu, 06/05/2014 - 11:38 | 4826913 Pinto Currency
Pinto Currency's picture

 

Then you get massive barter and probably accelerate gold / silver's remonetization as a medium of exchange.

These central planners haven't got it all figured out.

Thu, 06/05/2014 - 11:55 | 4826992 old naughty
old naughty's picture

Great, after 39 years since Rod departed, we have finally found another "Rod" to write the next episode of TTZ.

Thu, 06/05/2014 - 11:56 | 4826998 gh0atrider
gh0atrider's picture

NIRP is what this has come to.  No more fucking around with your stupid doomer games. 

Get into some Bitcoin today!!

Thu, 06/05/2014 - 13:16 | 4827286 Anusocracy
Anusocracy's picture

Economies without government: technology drives prices down, savers receive interest and the wants of the consumers drive innovation.

Economies with government: the government drives prices up, savers lose money and the wants of government drive innovation.

Thu, 06/05/2014 - 15:47 | 4827771 HardlyZero
HardlyZero's picture

Pay as you go.

You have to pay them to give you your money.

The streams should be crossing sometime this weekend.

Conservation of Energy will probably come into the equation at some point and cause anti-gravity.

Thu, 06/05/2014 - 18:06 | 4828207 Bindar Dundat
Bindar Dundat's picture

Finally a reason to accept a math based financial  system where trust is in the numbers  -- not in changing policies.  The current susytem is now officially FUBAR!  

Thu, 06/05/2014 - 22:46 | 4828909 Squid-puppets a...
Squid-puppets a-go-go's picture

well i wouldnt mind earning negative interest rates on my savings at 3-4% if it also meant that they pay me 5-6% of the remaining balance of my mortgage

that should be the logic of reversing the traditional nature of interest rates, right? Oh - no, its only on the savings component not the lending component . Funny that.

More fuel for the revolutionary bonfire

Thu, 06/05/2014 - 18:05 | 4828206 N2OJoe
N2OJoe's picture

What a coincidence that we're now seeing a push for a cashless econoomy...

Thu, 06/05/2014 - 11:32 | 4826912 saveandsound
saveandsound's picture

So far the deposit facility rate of -0.1% applies only for banks putting money at the ECB's deposit. The banks can easily take the fiat from there and put it into their own books, getting an interest rate of 0.0% again.

Besides, an interest rate of -0,1% decreases M1 (slowly), doesn't it? But what do I know or understand...

Thu, 06/05/2014 - 12:01 | 4827018 Day_Of_The_Tentacle
Day_Of_The_Tentacle's picture

It seems to me that this is evidence that trust in the interbank lending market is still at basement levels. It looks like banks still prefer to deposit with the CB overnight rather than with other banks, who need the liquidity. Maybe this ECB move now and not two years ago suggests a new liquidity crisis is boiling just under the surface..... 

Thu, 06/05/2014 - 10:39 | 4826751 Relentless101
Relentless101's picture

Incentives are king. This will not end well. Banking in the Caymans and other banking havens will be the new normal for a huge population of europe. I honestly like the idea of possibly paying a bank to keep your cash safe. It of course wouldn't be a majorly lucrative model compared to the banks that take huge risk. But I think it could still be really profitable because a lot of people would buy into such a bank.

Thu, 06/05/2014 - 15:54 | 4827818 sushi
sushi's picture

Great thought!!

If you deposit in our bank we charge you 5% per year.

This generates new revenues that drives the stock price higher.

So the key to smart investing in to remove your funds from the bank and buy an interest in the bank.

Since everyone will soon be doing this financials will be driven ever higher.

This is great for pension returns.

Expect this model to come soon to a banknear you.

 

Thu, 06/05/2014 - 16:21 | 4827929 Five8Charlie
Five8Charlie's picture

My brain just exploded.

Thu, 06/05/2014 - 11:25 | 4826889 rubiconsolutions
rubiconsolutions's picture

"Nirp slip?" 

Thu, 06/05/2014 - 11:27 | 4826895 tonyw
tonyw's picture

PT, don't be so ridiculous, if the banks had to pay you then where would they get their bonuses from?

Thu, 06/05/2014 - 12:17 | 4827072 Moustache Rides
Moustache Rides's picture

woops

Thu, 06/05/2014 - 09:46 | 4826558 ohcanada
ohcanada's picture

thirty seconds in he actually says "er, and, what I want to see now is a lot more fear about it"

Thu, 06/05/2014 - 09:52 | 4826582 CPL
CPL's picture

They are all replaceable now and will be replaced from news print to TV.  The world likes talking heads.  IT's offer is much, much cheaper and can look like anything you'd like it to look like.  No one gets old in a computer and they deliver stories on time.  Might not be great pieces of work at first, but considering no one is watching any of the cable news outlets anymore why would any general owner spend money they don't have to. 

That's the shape of the world today, the news is now an app.

http://www.theverge.com/2013/2/5/3950798/guide-app-for-ipad

http://digitalmedia.strategyeye.com/article/QUqmFbTA7XE/2014/01/30/guide...

http://techcrunch.com/2013/02/05/guide-raises-1m-in-seed-funding-to-repl...

http://www.usnews.com/news/articles/2013/04/01/your-next-news-anchor-may...

Protip...this is now how you invest into media going forward.  You invest into the software.  Because the talking heads on TV aren't making rent by the numbers.

Thu, 06/05/2014 - 11:35 | 4826923 Cathartes Aura
Cathartes Aura's picture

aye,

They are all replaceable now and will be replaced from news print to TV.  The world likes talking heads.

from reading & comprehension skills, straight to another yakky-voice in the mix, something barking in the background, to be tuned "in and out" as the distracted minds juggle incoming/outgoing "thoughts". . .

and of course, TeeVee delivering "truth in news" with perfectly groomed talking heads. . . a carefully sculpted non-reality, tailor-made to fit each consumer - how many folks already "talk back" and "argue" with their idiot box?      BFF.

Thu, 06/05/2014 - 11:58 | 4827002 Herd Redirectio...
Herd Redirection Committee's picture

"If we could let people consume news content passively"

Yep, this is exactly what they want.  Bypass critical thought completely, and you, the listener are glad you don't have to do that nasty business of thinking and analysis!

Thu, 06/05/2014 - 12:26 | 4827119 Cathartes Aura
Cathartes Aura's picture

perhaps the "robots" everyone has been waiting on are already

amongst us.

Thu, 06/05/2014 - 12:55 | 4827215 Herd Redirectio...
Herd Redirection Committee's picture

The zombie apocalypse already happened.  They won.

Thu, 06/05/2014 - 09:25 | 4826451 Which is worse ...
Which is worse - bankers or terrorists's picture

Interesting to to think how this works in a cashless society.

Thu, 06/05/2014 - 09:58 | 4826620 Peak Finance
Peak Finance's picture

This can only possibly work in the way they intend it ito work n a cashless society.  This, cashless, will be the next step in the grand ponzi. 

Thu, 06/05/2014 - 10:18 | 4826679 JRobby
JRobby's picture

Cashless society works when: They (monarchs, oligarchs, whatever label you put on opressors) own it all, We (the rest of us) own nothing.

Getting closer to this. Still a ways to go. There will be resistance from those who are not "They" but have accumulated wealth not held in custody by banks.

Of course "They" control the police and armies............................

Thu, 06/05/2014 - 10:43 | 4826767 El Vaquero
El Vaquero's picture

In the face of real armed resistance, the police will fold quicker than you can imagine.  My bet is that the US military is just as divided as the populace is.  In the event that bread and/or circuses breaks down, "They" will find that they control less than they think they do.

Thu, 06/05/2014 - 11:45 | 4826954 stormsailor
stormsailor's picture

saw a story last night about 5 police wounded, 3 dead in ontario canada.

 

did not have time to look at the particulars.

Thu, 06/05/2014 - 11:58 | 4827007 Herd Redirectio...
Herd Redirection Committee's picture

I think it was 5 shot, out of those, 3 dead, 2 wounded.

Thu, 06/05/2014 - 16:57 | 4828035 mkkby
mkkby's picture

Vaquero, you haven't been paying attention.  They will hire mercenaries to do the killing.  Of course local cops and military will balk at the orders.  Think about some guys from India or Russia who don't give a crap about anything except money, or feeding THEIR families back home.

Thu, 06/05/2014 - 18:12 | 4828232 stormsailor
stormsailor's picture

its easier to spray the pink mist on a mercenary.  brain rainbow

Thu, 06/05/2014 - 10:39 | 4826758 PT
PT's picture

Luckily for me I trust a complete stranger who lives thousands of miles away to look after the money I earn before I even get it.  Oh!  Wait ...

Thu, 06/05/2014 - 11:36 | 4826925 Jumbotron
Jumbotron's picture

"Interesting to to think how this works in a cashless society."

Simple really.  Most Visa or MasterCard branded store gift cards do this now.  You have a certain amount of time to spend the credits electronically tagged to your card.  When that time limit is up....a certain percentage is deducted and put back into the system.  Sit on your ass too long.....and you have nothing but a piece of plastic in your wallet.

"What's in your wallet ?   Why nothing....nothing at all !"

Thu, 06/05/2014 - 12:40 | 4827164 JuliaS
JuliaS's picture

Cashless society with negative interest rates works like a monarchy. If you are a king's friend, you'll have a roof over your head, food on your table and the rest. Or you may be doing good work, producing valuables, but piss off the king once - and you're done. King's orders.

You friend with the King - the money you have is irrelevant, as you won't actually ever have to spend it. Cross the line and your savings are null and void.

Thu, 06/05/2014 - 17:36 | 4828139 Jumbotron
Jumbotron's picture

Kinda sounds like this.....doesn't it.

 

The Mark of the Beast
16And he causes all, the small and the great, and the rich and the poor, and the free men and the slaves, to be given a mark on their right hand or on their forehead, 17and he provides that no one will be able to buy or to sell, except the one who has the mark, either the name of the beast or the number of his name.…

Fri, 06/06/2014 - 12:40 | 4830424 PT
PT's picture

In times past, the mark of the beast could be simply interpreted as a tattoo.  But people could still trade without the mark - it could be too hard to enforce.

But nowadays scientists have been actively involved in producing the electronic implant mark where you truly won't be able to trade without it.  You'll still be able to barter, but if most of the stuff you buy is, say, over the internet, then chances are that you will indeed NEED that mark.

The book foretold, so many people don't believe, even as they actively seek to fulfill the book's prophecy.  Astounding to see.

Thu, 06/05/2014 - 11:13 | 4826850 Billy O'Naire
Billy O'Naire's picture

Right now, the stock market is all about 'buy high, sell higher.'

Thu, 06/05/2014 - 12:30 | 4827129 El_Duderino
El_Duderino's picture

But there is no inflation! Stock torpedoing all known records is perfectly normal in a recession. Welcome to the wonderful world of Draghinomics.

Thu, 06/05/2014 - 08:32 | 4826235 negative rates
negative rates's picture

Now we have to pay the banks to lend to us at 20%, put the silver back in coin!

Thu, 06/05/2014 - 08:52 | 4826321 Sudden Debt
Sudden Debt's picture

Silver just met a FAT FINGER :)

Thu, 06/05/2014 - 08:59 | 4826354 GetZeeGold
GetZeeGold's picture

 

 

Hey.....STOP THAT!

Thu, 06/05/2014 - 11:43 | 4826950 A Nanny Moose
A Nanny Moose's picture

Zing!!! The real rate of interest has been negaative for a very long time.

Thu, 06/05/2014 - 08:52 | 4826322 Greenskeeper_Carl
Greenskeeper_Carl's picture

Long Liberty Safe Co

Thu, 06/05/2014 - 15:24 | 4827707 Miffed Microbio...
Miffed Microbiologist's picture

Yes, I used to get irritated when the bank would post .02 interest yearly on our account. I was tempted to insist they mail us a check just to screw them out of a few cents in postage. Now, I'm tempted to do something more graphic in response to their subtle disrespect. Sad day when even worthless cash is more safe in a Safe.

Miffed;-)

Thu, 06/05/2014 - 08:07 | 4826137 MeMongo
MeMongo's picture

"And when the hitman comes he knows damn well he has been cheated"..... Now I'm steping into the twilight zone........

Thu, 06/05/2014 - 08:16 | 4826179 NoDebt
NoDebt's picture

Golden Earring.  I used to love that song.  Just hit play on it again now.  Good 8 am energy song.

Thu, 06/05/2014 - 09:28 | 4826476 gmrpeabody
gmrpeabody's picture

Classic..., never too early.

Thu, 06/05/2014 - 10:54 | 4826793 quasimodo
quasimodo's picture

I think there was a nice titty shot in the uncut video if I remember right.

Thu, 06/05/2014 - 12:18 | 4827089 Herd Redirectio...
Herd Redirection Committee's picture

Maybe in the European version!  Can't have a titty on TV, you know that.

Thu, 06/05/2014 - 08:09 | 4826152 Ignatius
Ignatius's picture

I had this vision, or nightmare, of bankers roaming the streets with guns demanding people to open an account.

Boys, these are not the 'free toaster' days.

Thu, 06/05/2014 - 08:10 | 4826156 Son of Loki
Son of Loki's picture

Why keep yoru money in a bank when you can hold Greek bonds or a solid investment like MFGlobal?

Thu, 06/05/2014 - 08:13 | 4826167 ParkAveFlasher
ParkAveFlasher's picture

Life has become a Roger Waters lyric.

Thu, 06/05/2014 - 08:46 | 4826292 Hobbleknee
Hobbleknee's picture

Amused to death

Thu, 06/05/2014 - 09:05 | 4826382 BlindMonkey
BlindMonkey's picture

Keep your filth hands off my desert.

Thu, 06/05/2014 - 17:54 | 4828179 Bernankenstein
Bernankenstein's picture

Keep your hands off my dollars you damn dirty banker!

Thu, 06/05/2014 - 09:21 | 4826434 Spastica Rex
Spastica Rex's picture

It all makes perfect sense, expressed in dollars and cents.

Thu, 06/05/2014 - 09:37 | 4826514 Ghordius
Ghordius's picture

you mean euros and cents. oh, wait, now I get it

Thu, 06/05/2014 - 11:29 | 4826905 tonyw
tonyw's picture

a pound of silver, now those were the days my friend

Thu, 06/05/2014 - 09:17 | 4826420 Kirk2NCC1701
Kirk2NCC1701's picture

We really think you're great.  Have a cigar.

Thu, 06/05/2014 - 09:29 | 4826452 RallyRoundTheFamily
RallyRoundTheFamily's picture

Fucking IE

Thu, 06/05/2014 - 09:28 | 4826454 RallyRoundTheFamily
RallyRoundTheFamily's picture

Dogs of war and men of hate
With no cause, we don't discriminate
Discovery is to be disowned
Our currency is flesh and bone
Hell opened up and put on sale
Gather 'round and haggle
For hard cash, we will lie and deceive
Even our masters don't know the web we weave
One world, it's a battleground One world, and we will smash it down
One world ...
One world Invisible transfers, long distance calls,
Hollow laughter in marble halls
Steps have been taken, a silent uproar
Has unleashed the dogs of war
You can't stop what has begun
Signed, sealed, they deliver oblivion
We all have a dark side, to say the least
And dealing in death is the nature of the beast
One world, it's a battleground One world, and we will smash it down
One world ... One world
The dogs of war won't negotiate
The dogs of war don't capitulate,
They will take and you will give,
And you must die so that they may live
You can knock at any door, But wherever you go, you know they've been there before
Well winners can lose and things can get strained
But whatever you change, you know the dogs remain.
One world, it's a battleground One world, and we will smash it down One world ... One world

Thu, 06/05/2014 - 11:34 | 4826919 ParkAveFlasher
ParkAveFlasher's picture

You say the hill's too steep to climb,
Chiding!
You say you'd like to see me try,
Climbing!
You pick the place and I'll choose the time
And I'll climb
The hill in my own way
just wait a while, for the right day
And as I rise above the treeline and the clouds
I look down hear the sound of the things you said today
Fearlessly the idiot faced the crowd, smiling
Merciless, the magistrate turns 'round, frowning
and who's the fool who wears the crown
Go down in your own way
And everyday is the right day
And as you rise above the fearlines in his frown
You look down
Hear the sound of the faces in the crowd

Thu, 06/05/2014 - 08:14 | 4826176 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Boys, these are not the 'free toaster' days.

The bodies of those who don't comply will be found wrapped in Spiderman beach towels.

Fri, 06/06/2014 - 01:43 | 4829164 Element
Element's picture

I watched so called EU banking system skeptic James Shugg basically singing the praises of this terminal-debt spree last night, apparently oblivious to this being the debt-growth death-rattle and not the coming of the Messiah.

He's totally captured ... but to be fair he does work for a big bank that keeps making obscene 'profits' each quarter from others debt-induced misery, so why would he not be thrilled?

Banks don't go broke even when they are broke - but everyone else goes broke, even when if they're not broke.

Great system, what's not to like about that if you're in small business?

Thu, 06/05/2014 - 09:29 | 4826482 Bro of the Sorr...
Bro of the Sorrowful Figure's picture

somebody bust out a limbo stick and some pina coladas. let's see how low draghi can go.

Thu, 06/05/2014 - 09:45 | 4826553 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

I see that happening... except for the part where the bankers are roaming the streets. Their bought-and-paid-for armies will be doing that part.

Thu, 06/05/2014 - 10:20 | 4826687 JRobby
JRobby's picture

Walk into any Wells Fargo branch.

"You need 4 accounts opened immediately!"

 

Thu, 06/05/2014 - 10:18 | 4826678 Groundhog Day
Groundhog Day's picture

 I guess they took the frog in slowly heating water instead of throwing him in boiling water

Thu, 06/05/2014 - 16:09 | 4827884 icanhasbailout
icanhasbailout's picture

I just warned them not to do this, just a couple of weeks ago:

Negative Interest Rates Perpetuate the Depression http://thebullelephant.com/negative-interest-rates-perpetuate-depression/

 

The economic beatings will continue until the economy improves, I guess.

Thu, 06/05/2014 - 08:06 | 4826135 Alpo for Granny
Alpo for Granny's picture

At least they are upfront about it. Here in merica' we also have a negative savings rate but the retarded fucking sheep cannot subract the inflation rate from the savings account rate.

 

Thu, 06/05/2014 - 08:18 | 4826189 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Here in merica' we also have a negative savings rate but the retarded fucking sheep cannot subract the inflation rate from the savings account rate.

Dude, c'mon, rates involve percent, and dat shit is wack. Nobody knows how percent works. Hey, I wonder what's on TV...

Thu, 06/05/2014 - 08:25 | 4826204 Haus-Targaryen
Haus-Targaryen's picture

You have a few options;

a) Honey Boo Boo
b) Jerry Springer
c) Montel
d) The Young and the Wrestless
e) Rachel Maddow
f) The Kardashians
g) Dancing with the Stars
h) Reruns of Lost
i) Beastality

Thu, 06/05/2014 - 08:52 | 4826288 GetZeeGold
GetZeeGold's picture

 

 

Brought to you by BrawndoTM....it has electrolytes!

 

It's too late for us....but we've got Common Core for the kids. They'll never know what hit them.

Thu, 06/05/2014 - 09:06 | 4826381 taketheredpill
taketheredpill's picture

 

 

This shit would be a lot funnier if I hadn't gone and had kids.  Now I actually have to worry about how it all falls out.

Thu, 06/05/2014 - 09:28 | 4826477 Momauguin Joe
Momauguin Joe's picture

I hear you boss. 5 daughters and a son here. 3 graduated and working, 2 in college and one in HS. 

Thu, 06/05/2014 - 11:22 | 4826882 Obama_4_Dictator
Obama_4_Dictator's picture

Hey, hte Pope just said to due society a favor and have kids.....someone needs to pay for all those old people and thier pensions....your 2 dogs sure won't do it!  ****Full disclosure, if the tptb didn't fuck shit up, maybe I would have had kids....too bad, so sad, find someone else to pay for the government's shit!

Thu, 06/05/2014 - 11:26 | 4826892 Billy O'Naire
Billy O'Naire's picture

I've thought about this - many of my contemporaries have had or are having children.

I haven't.

Of course, I doubt they are informed enough to be a Hedger, so I suspect ignorance is bliss.

Thu, 06/05/2014 - 11:33 | 4826914 jsgibson
jsgibson's picture

The purpose of Common Core is to keep parents and kids busy with meaningless homework.  Gotta keep the slaves preoccupied or they might think about something that matters.  Homeschool while it's still legal and avoid any curriculum that's aligned with Common Core.

Thu, 06/05/2014 - 08:33 | 4826237 tarsubil
Thu, 06/05/2014 - 11:42 | 4826945 Cathartes Aura
Cathartes Aura's picture

the best artists are prophetic, they see the patterns

early on.

Thu, 06/05/2014 - 09:21 | 4826433 Kirk2NCC1701
Kirk2NCC1701's picture

Here in 'merica we have NIRP in the form of bank FEES.

E.g. Account Fees (if you don't have Direct Deposit), double-digit Overdraft Fees for single-digit account overdraws.

Thu, 06/05/2014 - 11:54 | 4826543 813kml
813kml's picture

Does NIRP also mean that there will be negative jail sentences for withdrawals at gunpoint?

Thu, 06/05/2014 - 10:52 | 4826788 Crawdaddy
Crawdaddy's picture

Fees are mother's milk to banks. Straight profit. That is why they work so hard to nail your ass with fees.

Thu, 06/05/2014 - 11:29 | 4826900 Billy O'Naire
Billy O'Naire's picture

If your savings attract an interest rate that is lower than inflation, you're already on NIRP and have been for ages.

So there's NIRP in the US and Europe and has been for a long time now.

This isn't new NIRP. It's just 'officially acknowledged' NIRP.

Thu, 06/05/2014 - 10:22 | 4826690 JRobby
JRobby's picture

The inflation rate is a falsified number.

Subtract .03 from .005

BTW - that 0% car you just bought has been recalled.

Thu, 06/05/2014 - 08:07 | 4826142 Oldwood
Oldwood's picture

Is it still legal to hold cash in hand? I have thought a lot about pulling my money out of the bank and just invest in a couple of good safes, but I worry that it would be seen as a potential crime. This is the excuse they have for taking people's cash if they have over a few thousand dollars on their person.

Hate to say it but Bitcoin may be a solution. Regardless, we are being herded, just got to figure out whether it is to a holding pen or a kill chute.

Thu, 06/05/2014 - 08:11 | 4826158 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

I have thought a lot about pulling my money out of the bank and just invest in a couple of good safes, but I worry that it would be seen as a potential crime.

Hey, at this point why not? After all, just thinking about it already makes you guilty of thoughtcrime.

Thu, 06/05/2014 - 08:15 | 4826178 Oldwood
Oldwood's picture

true enough

Thu, 06/05/2014 - 08:47 | 4826295 BobPaulson
BobPaulson's picture

It is not a crime so much as made to be absurdly inconvenient. Just try buying a car cash, let alone a house, and see what they say.

Thu, 06/05/2014 - 09:03 | 4826370 BeerMe
BeerMe's picture

Hmmm...That's an idea.

Thu, 06/05/2014 - 09:36 | 4826511 MountainsRoam
MountainsRoam's picture

I have bought a new car cash, and trust me, they had no problem counting all them 100 dolla bills haha

Thu, 06/05/2014 - 11:51 | 4826970 stormsailor
stormsailor's picture

bought a car last august, all cash 28k.  took it in 2 large ziplock backs.  i thought the salesman was gonna soil himself.

Fri, 06/06/2014 - 06:09 | 4829311 Gief Gold Plox
Gief Gold Plox's picture

Tried buying a new car last year for cash. Failed.

They said money laundry regulation prevents them from accepting cash from clients in access of 2k EUR.

Fri, 06/06/2014 - 12:45 | 4830446 PT
PT's picture

You need to show them your HSBC business card.  Or perhaps sell them a house for, say, 500k and then buy it back off of them for 500k plus the price of your car.  Oops.  Forgot agent fees.  Stick with the business card.

Thu, 06/05/2014 - 11:14 | 4826851 thamnosma
thamnosma's picture

I have a friend who works at a Mercedes Benz dealership.  They have a compliance person to handle cash purchases, mostly by ethnic Chinese, Russians, etc. (you know those people with cash....) and cash purchases are reported to the Feds.

Thu, 06/05/2014 - 09:09 | 4826395 Greenskeeper_Carl
Greenskeeper_Carl's picture

Not illegal, but you definetely want to keep all paper work regarding your cash withdrawals so you can prove you earned it legally and paid your taxes like a good serf. Otherwise the police state will steal your money and make you sue them to get it back. Cuz in the new police state if Amerika you are guilty and can have your assets seized based o the whims of one costumed thug, and the burden is on you to prove your innocence.

Thu, 06/05/2014 - 11:19 | 4826870 thamnosma
thamnosma's picture

Good advice.  Many stories of Tennessee authorities stealing cash under pretense that "hey your cash might have been used in a drug transaction".  Yet another fundamental reason for killing the War on Drugs.  Ron Paul had that so right.

A couple years ago I was pulled over by some sheriff's thugs in St. Charles County, MO (Interstate 70).   They were the "high and tight" military types, probably civilian control personnel in Iraq, didn't take long for one to ask how much cash I had on me.   Geez, officer, I'm travelling 2000 miles, is it okay if I have a little cash?   Fortunately I only had 100 on me, which seemed to fall below the theft threshold.

So the meme is if you have cash you must be selling drugs.  How convenient.

Thu, 06/05/2014 - 12:22 | 4827104 Herd Redirectio...
Herd Redirection Committee's picture

Selling drugs isn't bad.  Its not giving the cut to the bank and drug cartels thats a crime.

Thu, 06/05/2014 - 08:30 | 4826222 Schaublin
Schaublin's picture

Storing pieces of paper with pictures on them in a metal box with the belief that those notes will retain purchasing power through time should be considered a rather questionable strategy. Enough in hand for a week's groceries? Certainly. A month's expenses? Yes. Life savings? See China and India and others for details.

Thu, 06/05/2014 - 08:52 | 4826310 Saro
Saro's picture

"Is it still legal to hold cash in hand?"

It's not illegal, but that doesn't mean the police won't steal it anyway and force you to sue them to get it back.

"Hate to say it but Bitcoin may be a solution."

BTC up 2% in the last hour since NIRP was announced. Could be a coincidence, but I wouldn't bet on it.

Thu, 06/05/2014 - 11:39 | 4826907 inky
inky's picture

Sorry to say this (because so many people have been sucked in)

But it seems to me that Bitcoin is a NWO trojan horse (a tester) for the NWO global currency.

Why dont you think they have attacked it fully? or they are actually allowing it to be and run its course?

Ok the muppets in goverment will argue for and against it (but thats just pantomime which is all scripted) for the sheeple.

They are letting Bitcoin develop and evolve (for now) and watching the progress from the sidelines.

Put it this way = if you printed your own money you would be locked up by now !

 

ONLY THE PTB CAN CREATE MONEY OR SIMILIAR.

 

They write the laws they say what is and what isnt.

Plus dont you all think its abit strange how bitcoin has just recently started to shoot up in value AGAIN,then all of a sudden this NIRP bullshit.

WAKE UP 1+1 = 2

 

Thu, 06/05/2014 - 11:46 | 4826958 Saro
Saro's picture

"But it seems to me that Bitcoin is a NWO trojan horse (a tester) for the NWO global currency."

Evidence beyond mere supposition and innuendo?

"Why dont you think they have attacked it fully?"

Because they don't yet fully realize how dangerous it is to them.  Right now, it's just an oddity to them, a toy for geeks.  Hopefully, once they realize they're losing control of their grip on the monetary system, it will be too late.

"Put it this way = if you printed your own money you would be locked up by now !"

They can't stop it.  They could harm its progress by trying to ban it, but they can't actually stop it.  There's no one to "lock up", and no servers to tear down.  The only thing they can really do is introduce barriers at the interface between Bitcoin and the traditional banking sector (e.g. the exchanges) to try and stem the tide, which they have already started to do in some cases.

"Plus dont you all think its abit strange how bitcoin has just recently started to shoot up in value,then all of a sudden this NIRP bullshit."

Not at all.  Between the deteriotating fiat economies and new acceptance by major companies like Dish Network and Apple, Bitcoin's future looks brighter every day.  Why wouldn't more people buy in?

Thu, 06/05/2014 - 11:53 | 4826983 medium giraffe
medium giraffe's picture

Is it perhaps a bit naive to think that bitcoin is flying under the radar when MtGox is being discussed in the Senate?  Just asking.

Thu, 06/05/2014 - 12:03 | 4827026 Saro
Saro's picture

It's not "flying under the radar", or they wouldn't be trying to put up the barriers to entry I mentioned.  I don't think they yet understand the full gravity of their predicament, however, or we'd be seeing laws introduced making transacting in Bitcoin illegal, and titled things like the "Save Our Children From Drug-Money-Laundering Rapists Act".

Don't worry, it'll happen eventually.  But by then, I think the USSA will be but a blip on the Bitcoin radar anyway.

Thu, 06/05/2014 - 12:17 | 4827082 medium giraffe
medium giraffe's picture

Fair one.  The biggest problem I can see is that the central networks that you rely on for Bitcoin are owned by corporate interests.  There is no idealistic 'intrinsic human right' to access the internet, and no means by which to do so in a free manner.  Access would also be restricted in areas with poor or no infrastructure. 

Bitcoin is always painted as a great hope, but to deserve such an accolade you can't simply say 'fuck you' to the poorest nations.  They just end up with an unbridgable technological and commercial gap.  That, or the vacuum is filled by the same old usury scumbags pimping loans for infrastructure to poor nations and using the currency as a weapon - the very thing you had hoped to be free of.

Thu, 06/05/2014 - 12:25 | 4827116 Herd Redirectio...
Herd Redirection Committee's picture

Pretty much you are prevented from spending your BTC when AND WHERE it would be most profitable/useful to do so.

Thu, 06/05/2014 - 12:48 | 4827197 Saro
Saro's picture

I think the poorest nations are the one that want to get out from under the heel of the US financial system the most, and if Bitcoin is not the answer to that, what is?  Trying to ship gold bars in and out of a country is a non-starter for many reasons.  Any centralized currency is subject to the same abuses we see now.

Somalia has one of the best telecommunication networks in Africa, and it's easy to transact in Bitcoin on a phone.  No gatekeepers, no middle-men, no politicians.  What's the better option?

Thu, 06/05/2014 - 13:08 | 4827257 medium giraffe
medium giraffe's picture

I haven't the faintest idea, but saying it's either bitcoin or fiat to cure the worlds ills is a false dichotomy.  I realise nothing exists at present as a real alternative, but it's too easy to make the leap from frying pan to fire without full evaluation of the consequences.  Look at how long it has taken for society at large to start realising the damaging effect of fiat.  I don't think we have the luxury of time to be able to repeat the cycle, and find out at the end we've been screwed again.  At least bitcoin presents the idea of there being an alternative though, and I think that is it's greatest strength. 

I do think, however, that the second a single global(ist) currency emerges, backed by hard assets or wealth of nations, bitcoin will be abandoned and all will rejoice in their new found stability (and subsequent captivity).  All that is required is a little desperation and a timely 'shining beacon of hope'.

Thu, 06/05/2014 - 11:53 | 4826986 Cathartes Aura
Cathartes Aura's picture

erm,

Not at all.  Between the deteriotating fiat economies and new acceptance by major companies like Dish Network and Apple, Bitcoin's future looks brighter every day.  Why wouldn't more people buy in?

that would be a red flag for me, and tends to prove his point.

Thu, 06/05/2014 - 11:59 | 4827008 Saro
Saro's picture

Bitcoin growing as a currency proves that Bitcoin is a tool of the Illuminati?  
The only way Bitcoin can prove that it's not a tool of our reptilian overlords is if it fails spectacularly?

When you go looking for evidence to fit a narrative, you tend to find it, regardless of the narrative in question.  If Bitcoin does poorly, it's a scam.  If it does well, it's a tool of the NWO.  There's literally no evidence that can't be spun in the direction of your choosing.

Thu, 06/05/2014 - 11:51 | 4826976 Cathartes Aura
Cathartes Aura's picture

tend to agree with you.

if it wasn't part of training the herd in new concepts of "money" then it would be illegal - they make pretty much everything "illegal" nowadays, nudging folks to profit-able incarceration-systems, plus it keeps the uni-form'd forces employed.

what is presented as "edgy" usually gets "co-opted" over time, and always if it's profit-able.

not like "they" don't want a form of "money" used globally, and easily monitored by systems in place. . . while bitcoin appears "secure" at this stage, who knows.

Thu, 06/05/2014 - 10:23 | 4826697 JRobby
JRobby's picture

Hookers love guys with plenty of cash in their pockets............

Thu, 06/05/2014 - 11:04 | 4826821 quasimodo
quasimodo's picture

Yes, and clinics love guys who love hookers...........

"better wear your rubber boys, if Betty is your date tonight.."

Thu, 06/05/2014 - 11:20 | 4826876 thamnosma
thamnosma's picture

What will they do in a cashless society?

Thu, 06/05/2014 - 08:08 | 4826144 dmger14
dmger14's picture

Oh, but that's where the cashless society comes in, so that you cannot maintain the value of your money by holding it.  Digits can be siphoned.

Thu, 06/05/2014 - 08:10 | 4826155 GolfHatesMe
GolfHatesMe's picture

Purple NIRPLES for everyone

Thu, 06/05/2014 - 08:43 | 4826272 Mae Kadoodie
Mae Kadoodie's picture

well, twist my titties, NIRP has arrived!

Thu, 06/05/2014 - 08:13 | 4826172 Cattender
Cattender's picture

i don't have any money in the Bank right NOW! (just checking) and that shit is GONE in a Flash... WEEEEEEE!!!! the Depression Continues and DEEPENS...

Thu, 06/05/2014 - 08:19 | 4826192 stocktivity
stocktivity's picture

Fat fucking bankers continue to rape the poor and middle class! Fuck all you bankers!

Thu, 06/05/2014 - 08:36 | 4826246 negative rates
negative rates's picture

It was the law makers dude, back in the late 70,s and early 80,s they eliminated the amount you could charge for interest, it used to be 10% by the end user, now it's skys the limit in debasing the middle class.

Thu, 06/05/2014 - 08:46 | 4826290 ElvisDog
ElvisDog's picture

The big lie in all this is that lowering interest rates will increase lending by the banks. It has not and will not do anything of the sort. But the good news is that here in the U.S., most people live paycheck to paycheck, so no savings to be charged negative interest against.

Thu, 06/05/2014 - 08:20 | 4826193 asking4it2k
asking4it2k's picture

Under the Dodd-Frank Act if a big bank fails they can legally seize your deposits. Aint that crazy??

FDIC wont have the funding to step in and save deposits.

 

Imagine waking up one day and your entire bank account is $0

Thu, 06/05/2014 - 08:47 | 4826297 ElvisDog
ElvisDog's picture

That's where your physical gold and silver stored outside of the banking system comes in handy....

Thu, 06/05/2014 - 09:45 | 4826552 asking4it2k
asking4it2k's picture

I actually pulled out a lot of my money out of the bank and bought some gold and silver with it. I dont care if the artificial price does decline near term, eventually it will skyrocket. Im done with paper !!

Thu, 06/05/2014 - 09:30 | 4826486 p00k1e
p00k1e's picture

"Imagine waking up one day and your entire bank account is $0"

 

 It will happen.  That day is when the peoples realize the difference between “good debt”, like a mortgage that one can use interest outflow from as a tax write-off Vs a paid-off mortgage, where one can sleep at night without worry about the lines at the FDIC.   

Thu, 06/05/2014 - 17:02 | 4828049 Pee Wee
Pee Wee's picture

Why would anyone make payments to Fascism on depreciating assets like shoddy homes tied to joblessness and decay.

If you have a mortgage, even with tax credits, your the sucker.

Get rid of it (the mortgage) and rent, you will thank me.

Thu, 06/05/2014 - 08:48 | 4826299 stant
stant's picture

Defacto new gold standard

Thu, 06/05/2014 - 08:52 | 4826326 Kirk2NCC1701
Kirk2NCC1701's picture

Duh!  How long has Kirk been telling you to bank privately at Bank of Certa, Sealy and Posturepedic?

No Fees, no Gov inquiries or Gov compliance, no limits, no "50 questions", no BS.  24/7 access.

Thu, 06/05/2014 - 12:36 | 4827152 ParkAveFlasher
ParkAveFlasher's picture

I just hope your mattress is properly tagged, when the inevitable team of Mattress Compliance officials from the DHS/Treasury comes a-knockin'.

Thu, 06/05/2014 - 18:06 | 4828213 mkkby
mkkby's picture

Is your mattress fire and theft proof.  If not, you need to go back to the drawing board.  Perhaps burying it on a dry planet like vulcan.

Thu, 06/05/2014 - 08:54 | 4826335 JJdog
JJdog's picture

So what is the difference between soft toilet papers and paper money? the toilet paper is soft to wipe your butt and the papper money will scratch and cut your butt. 

Thu, 06/05/2014 - 09:21 | 4826435 Osmium
Osmium's picture

So you are saying toilet paper is actually better than paper money.

Thu, 06/05/2014 - 12:38 | 4827161 ParkAveFlasher
ParkAveFlasher's picture

For some dumps, actually, I would prefer a gentle scrapage versus simple soppage.  IMHO that's still up in the air.

Thu, 06/05/2014 - 09:22 | 4826436 Golden Rule
Golden Rule's picture

Long safes and mattresses...

Thu, 06/05/2014 - 10:18 | 4826682 q99x2
q99x2's picture

Any person with more than 10,000 in their mattress or pillow shall be considered a terrorist. Their money shall be confiscated.

Thu, 06/05/2014 - 11:13 | 4826848 Ward no. 6
Ward no. 6's picture

i keep my savings at home

what is the point in putting it in a bank with no interest???

 

Thu, 06/05/2014 - 11:39 | 4826937 Reptil
Reptil's picture

the answer to that is ELECTRONIC banking. (i.o.w. total dependency)
that's the next shoe to drop... :-)

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