Germans "Lose Faith In Banks", Rush To Buy Safes

Tyler Durden's picture

It is no secret that one of the most admirable qualities of the German public - in addition to its striking propensity for thrift in the aftermath of Weimar - is its stoic patience and pragmatism when dealing with adversity. However, over the past month, we grew increasingly confident that said patience would be tested, if only when it comes to matters of monetary trust vis-a-vis the local, neighborhood bank. First it was the news that Raiffeisen Gmund am Tegernsee, a German cooperative savings bank in the Bavarian village of Gmund am Tegernsee, with a population 5,767, finally gave in to the ECB's monetary repression, and announced it’ll start charging retail customers to hold their cash. Then, just last week, Deutsche Bank's CEO came about as close to shouting fire in a crowded negative rate theater, when, in a Handelsblatt Op-Ed, he warned of "fatal consequences" for savers in Germany and Europe - to be sure, being the CEO of the world's most systemically risky bank did not help his cause.

That was the last straw, and having been patient long enough, the German public has started to move. According to the WSJ, German savers are leaving the "security of savings banks" for what many now consider an even safer place to park their cash: home safes.

Indeed, as even the WSJ now admits, for years, "Germans kept socking money away in savings accounts despite plunging interest rates. Savers deemed the accounts secure, and they still offered easy cash access. But recently, many have lost faith." We wondered how many "fatal" warnings from the CEO of DB it would take, before this shift would finally take place. As it turns out, one was enough.

To be sure, the Germans are merely catching up to where the Japanese were over half a year ago. As we wrote in February, "look no further than Japan’s hardware stores for a worrying new sign that consumers are hoarding cash--the opposite of what the Bank of Japan had hoped when it recently introduced negative interest rates. Signs are emerging of higher demand for safes—a place where the interest rate on cash is always zero, no matter what the central bank does.

“In response to negative interest rates, there are elderly people who’re thinking of keeping their money under a mattress,” one saleswoman at a Shimachu store in eastern Tokyo told The Journal, which also says at least one model costing $700 is sold out and won’t be available again for a month.

 

 

“According to the BOJ theory, they should have moved their funds into riskier but higher-earning assets. Instead, they moved into pure cash that earned nothing,” Richard Katz, author of The Oriental Economist newsletter wrote this month.

 Now it's Germany's turn.

“It doesn’t pay to keep money in the bank, and on top of that you’re being taxed on it,” said Uwe Wiese, an 82-year-old pensioner who recently bought a home safe to stash roughly €53,000 ($59,344), including part of his company pension that he took as a payout.

Interest rates’ plunge into negative territory is now accelerating demand for impregnable metal boxes.

Burg-Waechter KG, Germany’s biggest safe manufacturer, posted a 25% jump in sales of home safes in the first half of this year compared with the year earlier, said sales chief Dietmar Schake, citing “significantly higher demand for safes by private individuals, mainly in Germany.”

Burg-Waechter KG, Germany’s biggest safe manufacturer, posted a 25% jump
in sales of home safes in the first half of this year compared with the
year earlier, said sales chief Dietmar Schake, citing “significantly higher demand for safes by private individuals, mainly in Germany.”

Rivals Format Tresorbau GmbH and Hartmann Tresore AG also report double-digit-percentage German sales increases. “Safe manufacturers are operating near their limits,” said Thies Hartmann, managing director of Hamburger Stahltresor GmbH, a family-owned safe retailer in Hamburg, which he says has grown 25% since 2014. He said deliveries take longer from safe makers, some of which are running three production shifts.

Thies Hartmann, managing director of the Hamburger Stahltresor store in Hamburg

The biggest irony in all of this, as we first pointed out last October, is the epic mistake that central bankers did by unleashing negative rates: instead of forcing savers to spend, it has - at least in the case of Japan and Germany - forced them to not only pull their cash out of the bank, thereby further slowing the velocity of money, but to save even more, forcing central bankers to come up with even more unprecedented "solutions" to a problem of their own creation.

As the WSJ adds, in a country where few people buy stocks, the possibility of having to pay fees on deposits has turned savers’ world—and their piggy banks—upside down.

“The moment the bank tells me I have to pay interest on my deposit I’ll take my €50,000 or whatever it is and put it under my pillow, or buy a safe and stick the money inside,” said Dagmar Metzger, a 53-year-old entrepreneur in Munich.

Alas, with every passing day, that moment gets ever closer.

Meanwhile, for those who can't find or afford a safe, there are other options. Ms. Metzger, a game hunter, said she would also consider squirreling cash away in her gun cabinet, which has solid locks. Paying to save is “preposterous,” said Marlene Marek, 58, owner of a Frankfurt bistro. “I would rather withdraw my money and stash it at home, or keep it in a safe-deposit box at a bank.”

She is not the only one - many Germans have a similar idea, which has led to safes selling out, and creating waiting lists for safe-deposit boxes in some big cities as a growing number of Germans prefer self-sufficiency. “When you put money in a safe-deposit box, everyone notices, and you’re paying fees,” said Mr. Wiese, the Hamburg retiree, who said his new safe is roughly twice the size of a hotel safe.

And while one could blame retail savers for being conspiracy theorist nuts, in Germany it is the very biggest corporations who have been, throughout 2016, rebelling against the ECB's idiotic policies. Indeed, banks and other financial institutions themselves are also keeping more cash. As we reported earlier in the year, reinsurance giant Munich Re AG said earlier this year it would cache over €20 million in cash in a safe, alongside gold bars the company stockpiled two years ago.

“We are testing that and are happy that this works without any glitches and at reasonable costs,” said Chief Financial Officer Jörg Schneider. The reinsurer said it would consider augmenting its cash stash.

Finally, in what may be the pinnacle fo practicality over stupidity, Germans are particularly focused on safes because they prefer cash to plastic. “Only cash is real,” goes an old saying.

Well, yes, until it is confiscated as sad Harvard economists have been urging in recent months.

Unlike their more "hip" Scandinavian peers, roughly 80% of German retail transactions are in cash, almost double the 46% rate of cash use in the U.S., according to a 2014 Bundesbank survey. Germans also keep more cash in their wallets and visit ATMs more often, withdrawing on average $256 at a time, the study found. Americans withdraw $103 on average.

Germany’s love of cash is driven largely by its anonymity. One legacy of the Nazis and East Germany’s Stasi secret police is a fear of government snooping, and many Germans are spooked by proposals of banning cash transactions that exceed €5,000. Many Germans think the ECB’s plan to phase out the €500 bill is only the beginning of getting rid of cash altogether.

And they are absolutely right; we can only wish more Americans showed the same foresight as the ordinary German.

Meanwhile, the WSJ concludes, Ms. Metzger is a member of an activist group demanding the existence of cash be guaranteed in Germany’s constitution.  "I don’t want to become completely transparent,” she says.”I don’t want everyone to know whether I buy chocolate, strawberries or mangoes at the store.”

Alas, if "erudite" Harvard economists like Larry Summers and, now, David Rogoff get their way, Ms. Metzger's, and everyone else's, worst nightmare will soon come true.

Until that moment, however, as a final reminder, in a fractional reserve banking system, only the first ten or so percent of those who "run" to the bank to obtain possession of their physical cash and park it in the safe will succeed. Everyone else, our condolences.

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Tarzan's picture

Funny, here in the woods, we skip the safe and go for 4" PVC Pipe, two end caps, glue and a shovel.....

Here2Go's picture
Here2Go (not verified) Tarzan Aug 29, 2016 9:44 PM

IKR (i kno right)

NoDebt's picture

Germans haven't given up on banks, they've given up on the leadership of their whole society.

When you live in a socialist paradise that's promised you cradle-to-grave care and your government starts telling you to stock up on food, water and other supplies what is one to make of that?

I'll tell you what I would infer:  "We, your government, that has promised you everything will be taken care of if you just pay HUGE portions of your income in taxes and give up most of your God-given rights is INCAPABLE OF PROVIDING FOR YOUR MOST BASIC OF NEEDS, let alone all the little extras we falsely promised you along the way.  Thanks for all the money.  You're on your own now, suckers.  Time to re-learn the self-reliance we denigrated and told you to give up for all these years."

 

 

King Tut's picture
King Tut (not verified) NoDebt Aug 29, 2016 10:52 PM

Up until the very final day of the war AH had the full support of the Gernan people- compare that to Merkel's support in peacetime Germany now. 

JamesBond's picture

Going to need a bigger safe when inflation hits Germany again...

 

jb

SomethingSomethingDarkSide's picture

wacky wavy inflatable armed tube weimar

Food Loaf Junkie's picture

Just convert the paper into gold and the space problem is solved

wildbad's picture

old story..still true...moar true.  smart germans

RaceToTheBottom's picture

One step away from a gold run.  All they need is some inflation scare and gold goes to 3000$ and then up from there...

Jonas Parker's picture

"According to the WSJ, German savers are leaving the "security of savings banks" for what many now consider an even safer place to park their cash: home safes."

The safe won't keep their cash secure because fiat currecy can be canceled with a stroke of a pen. Gold and silver, on the other hand...

Offthebeach's picture

Um, not quite. Hence Gestapo ( Secret State Police ). They didn't exist for cupcakes and tea. Early 1920's Nazis were assasinating opponents, bombings, drive bys, death squads. By mid 1930's mass round ups of even moderate oponents to camps or executions. All media/ schools under Nazi control.

Saying they had support was the same thing the Nazis said, with their totalitarian control methods which by late in the war had common public displays of hangings of youths and resigned citizens who failed to show display sufficient enthusiasm.

Chupacabra-322's picture

Germans a couple of years ago were also buying old school type writers when the whole Snowden thing

Handful of Dust's picture

I like the kind of "safes" that the thief can pick up and carry off in the trunk of his car.

DownWithYogaPants's picture

You mean like Al Gore's lock box?

The one he kept his testicles in?

bamawatson's picture

except when he was getting a massage

Offthebeach's picture

In the freezer in a old Fiji 35mm film canister

justdues's picture

Trick is to weld iron bars to the base so they stick out and then concrete it in to the bottom of a cupboard or under the stairs or wherever.


Bemused Observer's picture

Those old typewriters are great. I got a 1906 Underwood at a yard sale for 5 bucks. Works great. And you FEEL like you are typing on one of those...such a satisfying "clackety-clack!". I want to get an old table fan and fasten strips of cloth to the grill.

Makes me feel like Mickey Spillane...he sure could write.

More Ammo's picture

NoDebt,  At least they are telling their people to stock up and not pretending all is well. 

As you know in the USSA preppers are "Domestic Terrorist".

 

http://www.networkworld.com/article/2228920/microsoft-subnet/ridiculous-...

If:

  •   Expressions of libertarian philosophies (statements, bumper stickers)
  •   Second Amendment-oriented views (NRA or gun club membership, holding a CCW permit)
  •   Survivalist literature (fictional books such as "Patriots" and "One Second After" are mentioned by name)
  •   Self-sufficiency (stockpiling food, ammo, hand tools, medical supplies)
  •   Fear of economic collapse (buying gold and barter items)
  •   Religious views concerning the book of Revelation (apocalypse, anti-Christ)
  •   Expressed fears of Big Brother or big government
  •   Homeschooling
  •   Declarations of Constitutional rights and civil liberties
  •   Belief in a New World Order conspiracy

 

wisehiney's picture

With just one end cap makes a great fireworks launcher.

NoDebt's picture

Potato cannon.  Hairspray, piezo-electric grill ignitor, a spud, and 4 feet of PVC pipe.  It brings a nostalgic tear to my eye just thinking about it.  I was doing shit like this when I was in MIDDLE SCHOOL and nobody said anything to us about it other than "be careful".

Hell, I used to make megnesium "burn bombs" that would melt through anything (including concrete) by stripping the powder off of a bezillion dime store sparklers when I was back in elementary school.  I almost burned the house down one time when the friction of stripping the stuff off the wire caused it to spark and ignite the pile already sitting on the aluminum foil tray below I built to catch it.  That's when I realized magnesium was one BADASS metal.  Still to this day possibly my favorite substance to do dangerous things with.

Wanna burn a hole through the top of that fancy new safe you just bought?  Give me enough sparklers and I'll burn you a hole through the top of it.  Burn everything inside of it to shit while I'm at it, too.

 

 

wisehiney's picture

Beer can cannon.

1 with combustion chamber, six both ends cut out, duct taped joints.

3 squirts lighter fluid, spin in the air five or six times to gasify,

and a match.

BOOM!

Great for noise.

If using to launch tennis balls, use thick walled vege cans.

Rusty PBR can will fuck you up when it blows in your hands.

NoDebt's picture

I never did that, unfortunately.  Sounds absolutely awesome.

your drunk mom's picture

AWESOME!  Should work great for chasing any sea lions away from my fish!

Food Loaf Junkie's picture

Wow does that bring back memories, we would launch tennis balls into the air and all our little brothers and sisters would run around trying to catch them before they hit the ground.  Sometimes we would be laughing so hard we couldn't stand up.  And yes after our fathers looked over our "tennis ball launchers" we were told the same thing "Just be careful"  Good clean fun and learning how to use items on hand for completely different purposes, junior McGiver stuff.

Offthebeach's picture

Tennis ball cannon.

Tennis ball cannon

Screwdriver punch hole in side at bottom.

Roll ball in.

Spray hair spray in hole. Amount no matter.

Aim, sort of.

Fick lighter at hole.

+1 for flaming tennis ball.

Should cross football field width to opposition team.

peddling-fiction's picture

Try to use a massive fresnel lens on concrete. Be careful. Bang.

It will melt a padlock and leave a puddle.

NoDebt's picture

Funny you should mention that.  I had one of them, too (well, something similar anyway).  It was a present for my birthday when I was single-digits old.  It was a good sized (8") magnifying lens mounted in what looked like a short 3-legged stool.  Designed so little a little tike like me could see little things appear big.

Well... it took me all of an hour to figure out what that bad boy could do in direct sunlight.  I don't think there was a single ant left alive anywhere near my driveway for weeks.  Lit paper on fire with it, too.  

There is NO WAY you could sell a product like that as a children't toy today.  NO WAY.

I also had Lawn Darts when I was a kid.  Nobody under 45 knows what Lawn Darts are because they were inanely dangerous and were quickly banned.  Imagine a giant DART that weighed about a pound being thrown up in the air in an attempt to get as close to a pin as possible (like playing horseshoes but with a deadly weapon).  God, I had the coolest shit to play with when I was a kid!

 

OverTheHedge's picture

We used to make Dutch Arrows: more spear than arrow, launched withith a throwing stick - hours of fun for all the family. Flaming arrows were fun after dark.

http://www.instructables.com/id/How-to-make-a-Dutch-Arrow-centrifugally-...

Probably classed as a terrorist weapon now

Bam_Man's picture

We had BB pistol gunfights.

I had old Daisy ".44 Peacemaker" and M1911 relica BB pistols that had worn out springs, but could still shoot a BB with enough velocity to leave a good welt.

Would probably get arrested (if not shot dead by cops) for that today.

zuuma's picture

Lawn darts are a great gift idea.

http://milwaukee.craigslist.org/tag/5747198431.html

You can get a set of those clackers on strings to go with 'em.  And ride around on your Honda ATC 90 3-wheeler.

 

A little pricey, now.

wisehiney's picture

My friends young Marine son burned a hole in my deck last year with one of those burn bombs.

Duct taped a big wad of stripped sparklers into a ball, lit and threw it out into the yard.

It exploded, flew sixty feet or so into the air and landed on my deck.

I was just glad it was not onto someones head or car or my house.

I could not raise hell at him.

He learned that kind of shit from me.

NoDebt's picture

Yep, you obviously know the destructive power of those things first hand.  A desk is what I was stripping the sparklers on when it all went horriby wrong.  Went THROUGH the desk, THROUGH the carpet, THROUGH floor, THROUGH the ceiling drywall on the floor below it and into the dining room table on the first floor before finally exhausting itself.  

I was in MASSIVE trouble, as you can imagine.  I didn't even try to lie.  I just told the truth and had my ass spanked raw over it (plus being grounded for 130 years).  And I deserved every damned bit of it.  Sparkler stripping was then relegated to something I only did out in the woods when nobody was watching.  Did I mention I almost burned the woods down a couple months later?  Yep.  That was me.  A little pyromaniac in training back in the day.

 

Tarzan's picture

The things we did as kids would land us in jail today.

We used the soda cans taped together and a tennis ball, with rubbing alcohol instead of lighter fluid.

One day a friend and I took his dads shot gun shells, all of them, and cut them open. He was not happy... Took a 12" piece of copper tube.  bent one end, put ALL the gun powder in it, and crimped the other end.  We built a fire on a dirt road in the woods behind the house and threw her in the fire.  We hid behind the trees for what seemed forever, and finally the thing went off.  The fire was gone, BOOM, and we were too.  We ran fast as we could back home.  Scared the shit out of me.  That was the last of my bomb making days!

By the way, if your serious about hiding your goods and don't want to risk a leak, add a bicycle air valve to the 4" PVC and fill it with air.  Test it's holding pressure, then bury it.

More Ammo's picture

yes Tarzan, I read articles about kids getting arrested for setting off Mentos/Coke two liter bottles.  Totally Bogus even today.

peddling-fiction's picture

"A little pyromaniac in training back in the day."

Have you moved on to bigger and better?

OceanX's picture

Last year, this guy put a mortar on his head, in front of his family...

http://www.detroitnews.com/story/news/local/oakland-county/2015/06/29/ma...

GunnerySgtHartman's picture

A great Darwin Award candidate!

ikhan's picture

Thats when your body will turn to 9mm swiss cheese as you are spending half the day scraping enough Mg to burn thru my safe.

 

Second point, who cares aboit cash? Get gold and silver, ve your own cwntral bank....oh and have a few firearms to help prune the safe crackers out there...

snblitz's picture

thermite: rust & aluminum

grind up a soda can and scrape some rust off a piece of steel laying around in your yard. You will need a scale to get the proportions right.

thermite is hard to ignite. Magnesium fire starter will help.

ThanksChump's picture

You can buy powdered aluminum and ferric oxide in bulk.

It's the 21st century.

zuuma's picture

or empty out your Etch-A-Sketch

YourAverageJoe's picture

AS do I, but in the city, ya gotta have something to keep yer shit in that can be easily access and is secured to the foundation.

I do keep handguns stashed around the house.

Mustafa Kemal's picture

I suspect in Stuttgart or Berlin things might be different.

beemasters's picture

"Funny, here in the woods, we skip the safe and go for 4" PVC Pipe, two end caps, glue and a shovel"

And how do you do your withdrawals? (just imagining...) :)

Rakksan's picture

One end can be a clean-out.