Commercial Paper

Make no mistake, the War on Cash is very real. And it’s unfolding before our very eyes.

"But they won’t, you know. Yellen and Draghi believe in the Taylor model and the Phillips curve. Gresham’s law will be found in the history books, but his corollary has little chance of making it into future economic textbooks. The result will likely be a continued imbalance between savings and investment, a yield curve too flat to support historic business models, and an anemic 1-2% rate of real economic growth in even the most robust developed countries."

As all eyes, ears, and noses anxiously await the scantest of dovishness from Kuroda and The BoJ tonight (despite numerous hints that they will not unleash moar for now), the data that was just delivered may have helped the bad-news-is-good-news case. Most notably Japanese household spending dropped 0.4% YoY (with tax hike issues out of the way) missing expectations by a mile as the 'deflationary' mindset remains mired in Japanese heads. AsiaPac stocks are hovering at the week's lows unable to mount any bid as China fixed the Yuan notably stronger and instigated a new central pricing plan for pork prices (which suggests concerns about inflation domestically). Once again Chinese margin debt reaches a new 8-week high as 'stability' has prompted releveraging among the farmers and grandmas.

No, Ben S. Bernanke will be someday remembered as the world’s most destructive battleship admiral. Not only was he fighting the last war, but his whole multi-trillion money printing campaign after September 15, 2008 was aimed at avoiding an historical Fed mistake that had never even happened!

In its efforts to prop up the Too Big To Fail banks, the Fed has made keeping your money in a bank a low value proposition.

Already, the big banks (the ones with the closest ties to the Federal Reserve) have begun turning away deposits OR charging them.

Deutsche Bank warned it expects to record a third-quarter loss of $7 billion, tied to a huge write-down in its corporate-banking-and-securities segment.  The bank said the charges are driven by the impact of expected higher regulatory capital requirements and its disposal of Postbank. It also said it will consider reducing or eliminating its common dividend for fiscal 2015.

DEUTSCHE BANK SEES 3Q NET LOSS EUR 6.2 BLN
DEUTSCHE BANK TO RECOMMEND DIVIDEND CUT OR POSSIBLE ELIMINATION

If you think this sounds like some kind of conspiracy theory, consider that France just banned any transaction over €1,000 Euros from using physical cash. Spain has already banned transactions over €2,500. Uruguay has banned transactions over $5,000. And on and on.

Q. Should somebody have gone to jail.

Bernanke: Yeah, yeah I think so. It would have been my preference to have more investigation of individual actions as obviously everything that went wrong, or was illegal, was done by some individial not by an abstract firm.

Moves will be made to ban physical cash in the coming months.

"This is a risky business. Can they get it wrong? Absolutely they can get it wrong."

Contrary to popular opinion, there are problems that are too big for the Central Banks to control.

"As interest rates go more negative, market participants will have increasing incentives to make payments quickly and to receive payments in forms that can be collected slowly. This is exactly the opposite of what happened when short-term interest rates skyrocketed in the late 1970s: people then wanted to delay making payments as long as possible and to collect payments as quickly as possible.... if interest rates go negative, we may see an epochal outburst of socially unproductive—even if individually beneficial—financial innovation."

Citing "continuing weakness in the medium-term growth outlook," Moody's has downgraded France:

*FRANCE CUT TO Aa2 FROM Aa1 BY MOODY'S, OUTLOOK TO STABLE

Apearing to blame The EU's "institutional and political constraints," Moody's expects French growth to be at most 1.5% and does not expect the debt burden to be materially reduced this decade.

Billionaires like Warren Buffett make fun of Gold, while ignoring the fact it has outperformed stocks ever since it was de-pegged from major currencies in 1967. This is part of a larger War on Cash implemented by the Central Banks.