Sunday, March 06, 2016
Two good items
Two encouraging items from Europe in the War on Savers:
(1) At Yves Smith's blog, a commenter from Poland reports a set of refreshing facts that aren't getting into the normal "news".
Poland, along with other ex-Soviet countries, is sticking firmly with paper rectangles. Most transactions are cash. Even checks are unpopular. Any bank in those countries that tried to place limits on cash transactions would get in real trouble, because the bureaucrats are accustomed to getting bribes in cash. It's the old Baptists and Bootleggers routine, sort of inverted. Verifies my general notion that old-fashioned venal corruption is far better for ordinary people than high-minded ideological corruption.
(2) Just outside the Soviet bloc, the banks in Bavaria have rebelled against NIRP, at least for their own transactions with the central bank.
And so Bavarian savings banks have had enough. The Frankfurter Algemeine has obtained a memo by the Association of Bavarian Savings Banks that openly encourages its member banks to stash cash in their own vaults rather than depositing it at the ECB and paying the penalty interest of 0.3% to the ECB on these deposits. “The savings banks therefore are asking if it might be more economical for them to keep high cash values in their safes and not - as usual – store them at the ECB,” the memo said.This won't necessarily transpose into interest for savers, but at least it's a semi-official recognition that ZIRP/NIRP is bad for somebody. Next day: It's fully official. A board member of Bundesbank has joined the call to halt anti-cash laws! Unfortunately there's nothing remotely encouraging in USA STRONG. All bad.
Labels: defensible spaces
¶ 12:57 AM
