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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Mustafa Kemal's picture

If it was only gambling, that might be alright. But they will use it to bailin.

Handful of Dust's picture

Is plural of "safe" the word "saves"?

Like "wife" and "wives"?

I went two publik skool.

mary mary's picture

The words are clearly related.  When you save, put your savings in your safe.  Don't put your savings in someone else's bank.

Montana Cowboy's picture

They take their money out of the bank and buy a safe when the contract rate of return goes below zero. Smart? Nope. They are dopes because they still had money in the banks. A saver realizes the combined effect of bank interest and inflation. This REAL rate of return dropped below zero long before the interest rate did. Where were all these number-crunching geniuses back when that line was crossed? They have been willingly accepting wealth losses for years. Now that their money is out of the banks, these people still suffer inflationary losses on the cash. They still have their wealth invested in banks because they are holding bank notes. They just don't have those bank notes on deposit with another bank. NOT A SOLUTION!

Mustafa Kemal's picture

You dont think they might put gold in there too?

mary mary's picture

What "bank interest"?  How much "bank interest" did you receive last year?  Less than $0.99?  More than $1.01?

Bankers have become so arrogant that they actually believe everyone "has to" give them their business. 

Freedom is the right to say "I'm just not going to do any more business with you".  Now watch Freedom.  You bankers did it to yourselves.

And, again, are there not any Montana Cowboys who would sell you a banker like you a cow and take payment in gold?  Of course there are.

Montana Cowboy's picture

Mary, I have tried to establish those relationships in advance in case the SHTF. I have had limited success but its not easy. The Hutterites (like Amish) control thousands of acres of farm and ranch land in Montana. They produce the best of everything from whole hogs to cherry pies to organic veggies. I had a meeting on the subject of food for metals and they simply wouldn't hear about it. They said they can't pay their bills with metals. The day may come when that changes. I think so many people live paycheck to paycheck that nobody can afford to save. They need every dollar to pay bills. If they take metals, they can't hold on to them.

mary mary's picture

Thank you for the information.

Offthebeach's picture

Correct.
It is not their, savers, money.
It's not money at all, it is a note, a I.O.Y..
It is a note from the central bank, and it can increase or decrease in value in the market, or the central bank can do as they want or need.

People are not savers, they are junior, very junior partners. Extreamly junior.

Neo-peasentry. The worker ants, peasents of the new financial feudalism.

Twee Surgeon's picture

Buy a Safe or buy a big magnet to open a safe with ? locksmiths be locksmithing. https://www.youtube.com/watch?v=TBhfnIu9lTw

SJEqualizer's picture

That's not a 'safe'.  Hint:  don't buy a safe at Costco, and don't buy a Sentry 'safe'.

onmail1's picture

America destroys its friends & allies

those who copy america will meet ruin

 

Yen Cross's picture

   I'd throw Hitlery in one of those safes, but she'd probably chew her way out.  lol

 

   All the great comments are making me want to buy the Oceans Trilogy  ~ box set.

Volaille de Bresse's picture

"I'd throw Hitlery in one of those safes, but she'd probably chew her way out"

 

No her pH1 super-acidic vaginal juices would corrode the steel.

HenryKissingerChurchill's picture

Germans told the world about the joos once

Now Shemitah end is coming goys

Bear's picture

I don't think it's that they have lost faith as much as making a ration economic decision ... Why pay someone to hold something you can hold for free ... simple logic

moneylover3's picture

Now only IF you can keep the money safe from rapefugees & jihadis

Wahooo's picture

Isn't it relatively easy to bust open one of these safes?

ToSoft4Truth's picture

Add it up, can't trust the FED or Banks but can trust their product, cash. 

niemand's picture

Made in Germany..still not convinced?..:-)

ramgold2206's picture

Germans also learned another lesson from Weimar days... cash in itself is not safe... so that is why they are also steadily and stealthy building up their own personal gold reserves.. smart people the Germans.

http://ramgold.ilp24.com/20249

slowimplosion's picture

A safe is nothing less than a flashing arrow to a thief saying "here is the cash".  If he can't open it or simply haul it off to where he can brute force it, he can put a gun to your head and you will open it.

 

If you have cash there are lots of better ways of storing it than a safe. IMHO

northern vigor's picture

Get a good safe and leave it empty so the buggers waste their time. Then hide the good stuff under the cement floor.

 

Last of the Middle Class's picture

Cash, my ass, they're hiding those illegal guns they're not supposed to have.

niemand's picture

the empire strikes back. If we cannot win with the gods we will call in the devil. whatever fuckin´works. zee german way..

conraddobler's picture

It's just fucking paper.

It will have no value if the say it has no value it's a great con.  We all use it because it's accepted but it has NO REAL VALUE so if they turn off the switch they have lost nothing but you have lost everything.

See how that works?

If they say you can't own a house they'll take that too.

If they say you can't own land they'll take that too.

If they say you can't raise your children they'll take those too.

Do you fucking see a pattern here?

They will take everthing the only thing you own that they will gladly take but can't is your soul.

Don't ever give them that.

They will not give that back.

shutterbug's picture

FIRST buy a safe with your papers,

SECOND buy physical gold and silver with the rest of your papers,

THIRD store your gold and silver in your safe,

FOURTH keep your remaining papers, they can be a bit useful for cold nights when you burn them in your heater...

ipso_facto's picture

FIFTH buy security system to protect your family and safe.

SIXTH buy firearms to use when security system is breached (by migrants of other ne'er-do-wells)

Dg4884's picture

Hell, I started in 2013 with a small safe.  By 2015, I had a faux wall built to hide my new long gun safe with plenty of room for papers, cash, PM and ammo.  We have just enough cash in the bank to pay bills (fuck those banker peckerwoods) and store the rest.  We are smart enough to avoid the SAR in the process. 

When this shit goes down, we will make our cash raid at SAMS club and be done witht the fiat until whatever dust is going to settle, settles.  So worn out from the corruption, collusion, and false flags.

Have a good Tuesday fellow ZH'ers.

Goldbugger's picture

Better put commodities in that safe because when the paper burns the safe will be worth more than the contents.

Bombberman's picture

Lose what? DAX still up 1% daily

Malus's picture

I guess someone just has to look up Uwe Weise's address, she's stashing $60k at her house somewhere. What a bs article. Pump the fear.....

northern vigor's picture

The sun and the wind were looking down at a man with a hat on. The wind bet the sun that it could get the hat off him before the sun could.

The bet was on...the wind blew hard but the man buckled down and held on the harder the wind blew. Finally the sun took a turn and shone nicely...soon the man took the hat off.

Same thing with savers and their money. The harder the central banks make it, the harder the folk hang onto their money.

Mustafa Kemal's picture

DB stock price still over 14.  I dont get it.

dynomutt's picture

Hey everyone, feed the pig!

John C Durham's picture

Probably we will see that the expanding Safe market will next come to the US. Gold, Silver, Cash. At least get money out of the largest banks and into a Community Bank that has a history of making it through Depressions.

roadhazard's picture

A safe in a home is not smart imho. It just lets people know you have something valuable. Use your imagination.