Everything That's Wrong With Banking Summed Up In One Bonehead Advertisement

Tyler Durden's picture

Submitted by Simon Black via Sovereign Man blog,

If you’re looking around right now for a new bank account that pays a reasonable rate of return, ANZ bank has a hell of a deal for you: 0%!

That’s right. ANZ is offering its depositors absolutely zero interest.


Now, a bank paying 0% isn’t exactly abnormal in today’s banking environment. But what’s really strange is that ANZ actually took out an ad in an Australian newspaper to advertise this.

Yesterday’s page 10 of the Australian Financial Review (AFR) had a quarter-page ad from ANZ boasting about 0% interest rates for accounts denominated in number of foreign currencies, including Hong Kong dollars, Japanese yen, British pounds, and more.

Curiously, in order to qualify for this bargain 0% rate, you have to meet a rather significant deposit minimum.

For the 0% Japanese yen account, for example, you have to deposit 23.5 million yen (currently about $223,000 US dollars).

So basically some manager at ANZ actually thought that paying 0% interest on substantial account minimums would be an attractive offer… so attractive, in fact, that they should brag about it in the newspaper.

This is so completely ridiculous. But it really crystalizes what’s wrong with the entire financial system.

We’re told to keep our money in banks… that banks are safe. But the objective data tells a completely different story.

Holding money in most banks guarantees that you will lose money.

Adjusting for taxes and inflation, you’re losing at least 2% per year, even if you believe the governments’ notoriously understated official inflation statistics.

This level of absurdity pushes people into riskier and riskier assets, simply in an effort to avoid LOSING money.

Case in point - the government of Spain recently issued 1 BILLION euros worth of bonds that yield a paltry 4%. And they’re due in 2064.

Bear in mind, Spain is completely broke. And just two years ago the government had to pay 7.5% on ten year notes.

Now people are lending money to the Spanish government for 50 freaking years at just 4%.

This is insane.

But couldn’t this insanity last forever? Couldn’t the grand wizards of the financial system continue to engineer one deranged bailout after another for decades to come?

Possibly. But unlikely.

Right now the US dollar is the world’s dominant reserve currency. This gives the United States nearly total control of the global financial system.

In order to clear cross-border trade transactions, foreign banks HAVE to use the US banking system (which is controlled by the US government).

Further, rest of the world must essentially mirror US Federal Reserve policy.

But this power… and insanity… only lasts as long as the US dollar is the dominant reserve currency. And this is starting to change rapidly.

China’s renminbi is becoming much more widely accepted around the world for trade settlement; a number of foreign governments are now holding renminbi reserves and doing deals to promote trade in renminbi.

Even in the United States, renminbi payment business increased 327% last year, and the US is now the fifth largest offshore renminbi settlement center.

It’s no secret here, this is happening right under our noses. The financial system IS changing.

People who ignore this trend do so at their own financial peril.

Yet those who understand what’s happening and align themselves accordingly stand to make fortunes.

The Weimar Republic’s episode with hyperinflation in the 1920s is a great example.

Despite all the warning signs, most people did nothing… and they got wiped out.

A handful of people, though, saw the writing on the wall. They took steps to safeguard what they had. And they allocated their investment capital to bet that the currency would collapse.

They were right. And vast fortunes were created in a matter of months.

Throughout history there’s always a handful of people ahead of the trend. And they’re rewarded for their foresight.

Right now we’re in the very early stages of a similar transition– arguably one of the most important economic transformations since the Industrial Revolution.

Because of this, opportunities already abound if you know where to look. It’s an incredibly exciting time to be alive.

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Dubaibanker's picture

Better than the ECB, who actually CHARGES the banks to keep money with them! 

ECB still has the audacity to call it a 'deposit rate' http://online.wsj.com/articles/ecb-cuts-interest-rates-in-surprise-move-...

NotApplicable's picture

Don't worry Simon, IMF will come to the "rescue" with SDRs.

There's absolutely no way they will let this accumulated debt unwind in a deflationary spiral, as it undoes a century of "hard work." Instead, it will ALL be used to back whatever they'll call the next global currency.

Dubaibanker's picture

Banks are now paying for this privilege to keep money with various Central banks in the Eurozone, in the end customers will end up paying somehow, as always.

Fees are rising everywhere instead of interest rates.

Fees have been implemented for depositing money for business accounts....for taking out money at a branch....Fees for manager's check cancellation....fee for non maintenance of balances...fees for everything.

Any stories to share on the rising fees around the world that you may have personally felt in the last year or two ever since the zero / negative rates began?

Herd Redirection Committee's picture

Sure, business accounts of $25,000 generating $10 of interest in a month, subject to monthly $120 in 'bank fees' (an account with little or no tx).


Income: $10

Expense: $120

(Monthly) Net Loss: $110 for holding money in a bank account!

J S Bach's picture

Throughout history there’s always a handful of people ahead of the trend. And they’re rewarded for their foresight.

Right now we’re in the very early stages of a similar transition– arguably one of the most important economic transformations since the Industrial Revolution.

Because of this, opportunities already abound if you know where to look. It’s an incredibly exciting time to be alive.


This is all so true... and the change is going to come at lightning speed.  I just don't feel as greedily gleeful about it as this writer does.  So many people are going to suffer.  Yes, it's basically their fault for being live-for-today grasshoppers, but they are purposely being mislead and misinformed by TPTB.  When it all pans out, the perpetrators of this evil system have to be brought to justice.

SeattleBruce's picture

"I just don't feel as greedily gleeful about it as this writer does."  Totally agree. 

"It’s an incredibly exciting time to be alive." - and for all the rest it's really going to suck!

Squid-puppets a-go-go's picture

and the herd arent piling into gold yet because...why ?

PT's picture

How to manipulate the price of physical gold:
1.  Sell gold.
2.  Steal gold.
3.  Go to step 1.

errr, step 1.5:  Invent reason why the gold must be stolen, or at least why a war must be declared and then you steal the gold while no-one is looking.  Sell gold to your enemies???  In exchange for gas and oil???

Umm, but yeah, your question is still a good one.

Ooohhh, that's right.  Step ... 4?  Step 1.75?  :  Bankrupt the people and open up a large chain of gold buying stores.  (Visit a pawn broker and find out how much they pay for jewellery from desperate people.)

Apart from that, your question still stands.  I agree with you.  Not complaining, just observing.  Hedge accordingly.

Why would they listen to me?  They have nice things.  I don't.  The end.

(and yet somehow I still prefer to live my way, not "their way").

PT's picture


Sorry guys, this article is soooo ... APPROPRIATE!  I really wish yous all knew as much about ANZ as me, in fact I wish you knew ten times more because I have forgotten a lot over the years and I wish you knew even more than that.  Suffice to say, that when new fees and other shenanigans were being invented and introduced, ANZ was manning the helm or not far from it.  I never banked with them and I never understood why anyone else did.  I still don't understand it.  Then again, given that Australian banking is dominated by the Big FOUR, I guess none of them are far from the helm.  Still, ANZ and this ad on ZH.  Of course it had to be ANZ.  That's just the way it works over here.

Captain Obvious.'s picture

Umm that sounds about right. The ANZ is my bank and if there was ever an economic weather vane I am it.

I should charge millions to speak.

PT's picture

But why do you still bank with them?  To me, they always seemed to be the worst, or the first with the worst.  Habit?  Did they ever give you some kind of good deal?  Because they may be first with the worst but it doesn't take long for the rest to catch up with them?  Or is my perception wrong?

PT's picture

I've had negative banking for over 20 years - i.e. fees > interest.  Still haven't worked out how to bypass the fuckers and get paid in cash.

LostandFound's picture

Yep, AED 150 dirham for sending money to an international account to pay my mortgage, thats on top of a shitty exchange rate.

Dubaibanker's picture

AED 150 is high but not THAT high. Many banks charge USD 50 to USD 75 minimum in UAE as well as Singapore/Switzerland etc. There was a time when we could get away with paying AED 25 for transfers within Dubai and AED 50 outside UAE. 

Have you considered asking your receiving bank if you sent money from an exchange house who also does background checks and takes an ID before sending a remittance, as per UAE central bank rules, if they will accept?

Not only will you get a better exchange rate than a bank but pay a far lower fee for remittance due to the competition. Only trick is that the foreign bank must accept the remittance and it will take you 1 trip from the bank - to withdraw cash - and next stop at the exchange house to remit the funds.

Hope this helps.

LostandFound's picture

Thanks for the advice, will check it out.

Dubaibanker's picture

You could actually send a small amount of say GBP 500 or USD 500 and see how it goes...and then use it for larger amounts.....if the receiving bank rejects it,...then you would know.

LostandFound's picture

By the way, are you buying gold and silver in Dubai? if so, where would you recommend?

I am buying from gold and diamond park, but struggling to find silver coins, they only sell 1kg bars.

Dubaibanker's picture

Yep...Been buying gold in small bars of 116 gms each called 'Tola' bars...apparently, they are easier to sell...they should cost now around 17k dirhams each. Even kilo bars are available. You could also call and check this shop named 'Lakhoos' in Deira. He is one of the biggest wholesalers in Dubai and the region. You should get everything in Deira's gold souk inlcuding silver coins. The trick is to find parking. Lol. Another one in Bur Dubai is Khushi whom also please call before going anywhere.

Another place to buy gold, alongwith gold certificates, is ENBD bank and you may also check with any of the banks that you bank with.

I prefer gold over silver. For all the noise in the world, silver is still an industrial metal and not much of an investment holding vehicle unlike gold which IMHO is more of a 'precious' metal and a popular one at that.

Just one tip, based on experience, do hold on securely to the purchase receipt without which you may find it very difficult to sell the gold.

Skateboarder's picture

Can't wait for silver to equal ~20 <insert new currency unit> and gold to equal ~1300 <insert new currency unit>.

We can all be rich, bitchez!!!


SAT 800's picture

Having the purchasing power you have now will be "rich" in the aftermath. "In the Kingdom of the blind, the one-eyed man is King".

Mercuryquicksilver's picture

Not to spoil anyones alarmist fun, but perhaps ANZ must publish rate changes in order to notify existing account holders that returns are no longer per contract. Maybe this is a notification in a public newspaper with large readership and not an advertisement.

p00k1e's picture

Perhaps all those Hunnits under the bed (cash external to the system) will be declared null and void. 

 That would be funny.

Kirk2NCC1701's picture

NP (No Problem, 'Nema Problema').  Two-step solution:

1. You keep a nominal Chequeing/Checking Account at the bank, where you get Paycheck (or any regular Deposit) auto-deposited.  This avoids fees being charged to the account, and lets you remain a tiny part of the System (the Visible Economy and M2) -- for purposes of paying taxes, utility bills, etc.  Use cheques/checks and/or Debit card to pay for stuff.

You may also have a 'Savings' account, to provide quick and convenient Overdraft protection, and keep it free of fees if the balance is kept above a nominal minimum ($500-1500, depending on the bank).

Alternatively, use a Community Co-Op or Credit Union, to avoid Fees.  But don't expect to get better interest rates than from a bank.  0.2% is not really better than 0.1%.  Not when your real inflation is 2-20%, depending on the item.

2. You keep the bulk of your Cash at the "Bank of Serta, Sealy and Posturepedic".  No fees, no nosy questions, no outing to Big Bro/Ho (via electronic trail and records) or potential litigators, no daily withdrawal limits.  Open 24/7.  Can keep multiple accounts in any denomination you like, as well as a Bullion Account.  Note:  You may have to use your very own Security System to safeguard this bank, but the associated costs are rather nominal when compared to the costs at a regular bank.

p.s. I'd like to tell you to keep a bunch of cash overseas (can't trust Canadian banks anymore either - not with Harper in charge), but then I'd be educating/informing the goddam ZH trolls and their bosses.  I can imagine Simon advising you to do so -- and he has done so in the past -- but most of the places that he has recommended have fallen under Obama's "Extended NATO umbrella" as of 9/5/2014 (e.g. Baltic states, Ukraine, Georgia) or under the FATCA umbrella (Central and S. America, Hong Kong, Singapore).  His "front-running" doesn't seem to last long, as TPTB simply pay for his Subscription and use his Info/Advice to close loopholes and places to hide.  A "Newsletter" clearly has a very limited shelf-life in its Advice.

p.p.s. If, IF I were to keep any cash overseas, I'd keep some nominal amount in an account and a larger part in a Safety Deposit Box as cash (and a few AU coins mixed in).  Since "Gold is not money" (per the Fed/Bernanke) and cash yields no Income that can be taxed, there is (to my knowledge) no requirement that citizens "declare" what they do with their Cash or where they store it.  But the number of people who could and actually would do this, is rather 'limited' (not a mass-market solution), and hence the overall amount would also be rather 'limited' in the eyes of TPTB.  Those people who are millionaires or billionaires have "sweetheart" deals with the Gov anyway -- don't you kid yourself.

SumTing Wong's picture

Since gold is not money, but they do ask if you are carrying more than $10,000 worth of money...my wife and each of my four daughters have some beautiful jewelry that has gold and diamonds. They even have gold necklaces with a setting in the middle for an ounce gold coin. I've got a couple of rolls of those awful Presidential dollars, plus some twonies and some euro coins, and it is amazing how a half ounce gold coin or two can find its way into those coins without being recognized as all that different. (I've tested this with TSA when getting onto planes.)

When you hide things out in the open, it shocks people and they miss it. 

Kirk2NCC1701's picture

:-)  Cool.  I've tried similar things before, but on a smaller and test-trial case.  For my own education/insurance, and was not going to share publicly.

Do you remember the signs at the park that say "Don't feed the ducks"?   Well, it's similar here on ZH:  "Don't feed the Gov Trolls".  ;-)

SeattleBruce's picture

Seems to me you might be able to work something out in country - if you're traveling anyway...

Dadburnitpa's picture

Well, yeah but the 0% is COMPOUNDED **DAILY**.  So there's that.

de Cosmos's picture

And, then there will be new money from the Interplanetary Monetary Fund, then the Interstellar Monetary Fund, the Galactic Monetary Fund, the Intergalactic Monetary Fund, the Universal Monetary fund, the Parallel-Universes Monetary funds, the Cosmic Monetary Fund, the Quantum Monetary Fund, the Dark Matter Monetary Fund, the Dark Energy Monetary Fund, the Existential Mystery Monetary Fund, the Perpetual Motion Monetary Fund... none of which has any real money at all.

JustObserving's picture

the government of Spain recently issued 1 BILLION euros worth of bonds that yield a paltry 4%. And they’re due in 2064.

Spain will no longer be Spain be then - broken into several pieces.

Human stupidity is infinite - matched only by misplaced human optimism.

Yes, Obama, the CIA figurehead (his first job was working for the CIA),  will solve everything

0% yield is so attractive only because it matches your IQ.

JRobby's picture

Good observation

The USSA will also be split into several nations by then if things change.

If they remain the way they are currently going, it will be a one nation global police state.

p00k1e's picture

The USSA will also be split into 'FEMA Regions'. 

PT's picture


If I remember rightly, written in 1994, Peter Sawyer said that within a decade the US would no longer be a nation.  (Unfortunately it was just a quick note near the end of the book with no explanation).  Okay, so he was wrong.  But I think we can agree that he was on the right track.  I'd love to know what he knew that led him to that conclusion back then.  He also foresaw an incident that would lead to the Australian govt confiscating guns.  Didn't happen the way he envisaged it but we had the Port Arthur massacre and then the end result was the same.

He first entered the public eye with a book called, "Dole Bludging, a Tax Payers Guide".  (He worked for the dole office and tried to eliminate some scamming.  Reporting to his superiors didn't work so he eventually wrote a book.)  I never got to read that book but it's on my wish list.  Try looking for it.  You'll quickly find the "edge of the internet".

SAT 800's picture

Probably all of us should just print out that header about the Spanish Bonds and put it on the wall behind our computer monitors, so we can look at it every day. It's a good way to sum up the stage of the madness we're in now. Of course, most of this money is "other peoples money". Like when your investment adviser calls you up to tell you he just got you a "perfectly safe" 4% return on your retirement money; "Oh, thank you Mr. Adviser; you're such a wise man". Gonna be some really unhappy people out there in investment land.

Moustache Rides's picture

I don't understand how a bank can do this.  When you deposit money in a bank you are loaning it to them.  That's why interest gets generated.  The loan is also why banks can then make loans to other people becuase your money has become their money because you loaned it to them.

Alea Iactaest's picture

Yes, it becomes "their" money.

Yes, the risk is all yours.

Yes, you have to be mentally deficient to think keeping your money in the bank with NO return and substantial (potential) risk is a good idea.

Act accordingly, you evil hoarders.

NotApplicable's picture

Banks used to loan real money, which was scarce. Today? They loan debt-money, and have no need for your deposits, except for window dressing.

seek's picture

And every other bank is doing the exact same thing, so there's no competition for your deposits (though there is for fees, it appears.)

No competition = no need to have higher rates as well.

Hacked Economy's picture

Moustache, this is incorrect, although it's the way most people (including me when I was taught finances at a younger age) view the banking system.

In actuality, you are not loaning money to the bank, but enjoining yourself by purchasing shares.  Read the fine print in any Bank or Credit Union application, and you'll see this.  This is the basis for the "bail-in" mindset that was exercised in Cyprus and has been explored by larger U.S. banks...if the institution needs capitalization to balance its books and remain solvent, then the money in "your" account is available for that purpose.  Remember, in a legally-binding agreement you have with your bank, you have a vested interest in keeping the bank solvent because you own "shares" in it.  The bank is therefore not legally stealing from you, but simply acting in the best interests of the corporation.

Ethically, it's horrible.  But legally it's all clear.  Keep this in mind and do as many others do...divide your money up between physical cash outside the system and multiple banks and/or credit unions inside it.  It's a moderate hedge against an unexpected bail-in against your money.

Moustache Rides's picture

That's just heinous.  Thanks for the clarification

Hacked Economy's picture

After following ZH for 3+ years, I'm very surprised (and disappointed?) that nobody else here provided the clarification.  Surely more ZH'ers here are aware of this truth about banks, yes?  (please say yes, and don't call me Shirley...)

PT's picture

I also thanks for the clarification.  Much better than all I knew.  I would have just pointed out that the banks do what the banks do because they keep getting away with it.  All my banking is done under duress.  If I don't have direct deposit then I can't get a job (can't claim the dole either).  No job then I starve to death.  No access to toilets and showers and I can't look clean, neat, tidy and employable.

It's a legalised extortion racket and they twist the screws whenever they feel like it.  Followed by the "You deserve it because it's all your fault" speech.  The supreme arrogance of the all powerful.

Moustache Rides :  Sounds like you need a little more education.
"Liars Poker" by Michael Lewis
"The Big Short (Inside The Doomsday Machine)" by Michael Lewis

Just a couple of fun little books that should help you get up to speed.  No doubt others can also recommend other books or essays.  I keep falling back to those two, not just for the information but for the fun factor in delivering that information.

Dame Ednas Possum's picture

...or stack bullion and then go boating.

Id fight Gandhi's picture

The banking system is purposely nebulous.

But to be clear : loans create deposits

PT's picture

... and thanks to direct deposit and Electronic Funds Transfer, the banks have close to 100% of the money 100% of the time.  Let that one sink in for a bit.

P.S.  And they STILL "need" to be "bailed out"!

Singelguy's picture

That is the way it USED to work. The banks now borrow from the central banks for 0% interest, invest it in the stock market, or buy back stock, or play the currency and derivative markets. They don't need the depositors anymore.

Grande Tetons's picture

So, you are saying I get nothing and take all the risk? 

Awesome. Maybe, I can store my PMs with you cats at the same time. 

SAT 800's picture

I'm sure they'd be glad to help you out; for a reasonable fee, of course.