"We Track the Financial Collapse For You, so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

Safeguard your financial future. Get our crucial, daily updates.

"We Track the Financial Collapse For You,
so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

Cash, Guns And Safes: Stress Is Spreading

The Bank For International Settlements just released a report stating that the spread of negative interest rates hasn’t caused the world to end. From this morning’s Bloomberg:

Negative Interest Rates Are Working Just Fine So Far: BIS

Negative interest-rate policies currently in use by central banks around the world have worked through their respective systems in much the same way as positive rates, though it’s not known how far below zero that would continue to be the case, the Bank for International Settlements said.

In its quarterly report published Sunday, the Basel-based “central bank for central banks” said that “so far, zero has not proved to be a technically binding lower limit for central bank policy rates.”

The BIS’s verdict on negative rates gives backing to the European Central Bank, the Bank of Japan and others at a time when such unconventional methods are facing increasing criticism for their potential impact on the financial industry and currency markets. A sell-off in European bank stocks this year was partly driven by fears that further rate cuts by the ECB would damage profitability in a sector still recovering from the debt crisis.

“The experience so far suggests that modestly negative policy rates are transmitted to money-market rates in very much the same way as positive rates are,” report authors Morten Bech and Aytek Malkhozov said. “Anecdotal evidence suggests banks seek to avoid negative rates by either extending maturities or lending to riskier counterparties.”

The report also presented calculations of the average effective rate that banks pay on cash above the minimum requirements or exemptions at the ECB, the Swiss National Bank, the Riksbank and the Danish central bank, showing that a lower negative policy rate doesn’t necessarily translate into a more expensive proposition for lenders.

The BIS report does include some caveats along the lines of “it’s early in the process and there’s no way to know if more deeply negative rates will cause trouble.” Still, the idea that the system isn’t being stressed by today’s negative rates is belied by some trends that have gotten a fair bit of press lately. Consider:

The New Cash Hoarders

(Wall Street Journal) – Negative interest rates have the law-abiding scrambling for bills.

Are Japan and Switzerland havens for terrorists and drug lords? High-denomination bills are in high demand in both places, a trend that some politicians claim is a sign of nefarious behavior. Yet the two countries boast some of the lowest crime rates in the world. The cash hoarders are ordinary citizens responding rationally to monetary policy.

The Swiss National Bank introduced negative interest rates in December 2014. The aim was to drive money out of banks and into the economy, but that only works to the extent that savers find attractive places to spend or invest their money.

With economic growth an anemic 1%, many Swiss withdrew cash from the bank and stashed it at home or in safe-deposit boxes. High-denomination notes are naturally preferred for this purpose, so circulation of 1,000-franc notes (worth about $1,010) rose 17% last year. They now account for 60% of all bills in circulation and are worth almost as much as Serbia’s GDP.

Japan, where banks pay infinitesimally low interest on deposits, is a similar story. Demand for the highest-denomination 10,000-yen notes rose 6.2% last year, the largest jump since 2002. But 10,000-yen notes are worth only about $88, so hiding places fill up fast. That explains why Japanese went on a safe-buying spree last month after the Bank of Japan announced negative interest rates on some reserves. Stores reported that sales of safes rose as much as 250%, and shares of safe-maker Secom spiked 5.3% in one week.

That academics and bureaucrats have responded by calling for the partial elimination of cash isn’t helping calm the masses. From the above Wall Street Journal article:

“In certain circles the 500 euro note is known as the ‘ Bin Laden,’” former U.S. Treasury SecretaryLarry Summers wrote last month in calling for a global ban on notes worth more than $50 or $100. He noted interest from European Central Bank President Mario Draghi and said that “if Europe moved, pressure could likely be brought on others, notably Switzerland.”

Fellow Harvard economist Kenneth Rogoff wants to retire cash altogether, primarily because “a significant fraction, particularly of large-denomination notes, appears to be used to facilitate tax evasion and illegal activity.” But he doesn’t hide the additional monetary-policy motive: “Getting rid of physical currency and replacing it with electronic money,” he wrote in 2014, would allow central bankers to set negative interest rates without people “bailing out into cash.”

On a different but related note, gun sales are up along with cash and safes. See Gun Sales Soar After Obama Calls for New Restrictions, which includes this fairly striking chart of Americans’ shift from rifles to handguns. The red line is handgun sales as a percentage of total sales. We’re clearly envisioning more up close and personal uses for our guns these days:

Gun sales March 16

Similar trends are taking hold in Europe, where gun culture is not traditonally part of the mainstream.

German Gun Sales and Permit Applications Soar After Cologne Sex Attacks

(Breitbart) – Gun sales and gun permit applications have soared in Germany in the wake of the sex attacks in Cologne on New Years Eve. Cologne, Düsseldorf and Frankfurt are all reporting an influx of requests for permits with Cologne police estimating at least 304 applications since the attacks. In 2015 the entire year saw only 408 applications total in the city.

Spokesman Andre Hartwich of the Düsseldorf police estimates at least eight to ten application requests per day, which if continued throughout the year would dwarf the previous year’s requests total of 1,500.

Ralph Pipe of the Frankfurt Police procedural office has said, “We have been beginning every day with at least 13 applications,” in comparison to last year in which there were only one or two applications per day.

Cologne police also mentioned that pepper spray is not covered under the Arms Act and does not require a permit or license. Sales of pepper spray in Germany have likewise increased and, as Breitbart London has reported, many vendors are even sold out.

This is all part of the same process, in which fiat currency printing presses lead to excessive debt and unwise foreign adventures, which lead to slowing growth, greater wealth inequality and geopolitical blowback, culminating in the kind of generalized mess that we see today.

People react to these uncertainties by trying to protect themselves with cash and guns, and governments respond by trying to limit citizens’ ability to do so.

If this play has a third act, it will involve the abolition of cash in some major countries, the rise of various kinds of black markets (silver coins, private-label cash, cryptocurrencies like bitcoin) that bypass traditional banking systems, and a surge in civil unrest, as all those guns are put to use.

The speed with which cash, safes and guns are being accumulated — and the simultaneous intensification of the war on cash — imply that the stress is building rapidly, and that the third act may be coming soon.

13 thoughts on "Cash, Guns And Safes: Stress Is Spreading"

  1. So a better idea would be to imprison the criminals that make such idiotic proposals and have done this to the financial system and threaten the remainder with prison if they don’t get going to make sure this never happens. Of course they won’t and the dollar will crash anyway. I wonder where they plan on hiding from all those armed victims of theirs once that happens?? You think the electorate is angry now just wait till they find out these criminals and psychopaths emptied their bank accounts and any remaining value in the US dollar too. There will be Hell (for them) to pay and pay they will…

  2. I ‘ve stated several times in the past concerning my ongoing conversion to cash that it isn’t easy. I’ve been forced to make more frequent smaller withdrawls after attempting a couple of large ones which resulted in the bank being brought to a standstill. They no longer have much currency on hand.
    I was out of town a few weeks ago and stopped in a local Wal – Mart and of course tried to use the self checkout but the station attendant said the machines were only accepting cards since the store was out of cash. That situation was highly informative.
    Secondly , I’m baffled at the level of trust average citizens have in the banksters at this stage in the game.

    1. What leads you to believe that anyone trusts them (banksters)? What alternative does anyone have? I for one, am not ‘going to cash’, but rather physical PMs.

      1. I’m happy you asked that question. I’m an observer in the strongest sense of the word. I know tons of people who in spite of the headlines you and I read everyday continue to pour thousands of Dollars in into ZIRP accounts. Even among those who know what’s coming I continue to see few efforts to change course. There has to be solid belief that the banksters can be trusted, right? Perhaps the outside chance that everybody else is really wrong and in the end we’ll be alright after all ?

        As for alternative, first I would say any alternative that guards the individuals safety is superior to the banksters. I’ve been moving cash out of banks over the last year and I can assure you of my funds safety.

        Even among those who know what’s coming I continue to see few efforts to change course.

    2. Go to a strip club… Talk to the girls.. It’ll cost you a bit, but not near as much as many other ways of getting your cash out of the system.. Talk especially to the door girl or whoever cashes out “funny money” for the dancers…

      Max out your credit card there.. The best is if you can get a cute enough girl you trust to work there.. Either as a waitress but preferably as an “entertainer”.

      If it is a no go with somebody you know, start hanging around the club and get to know folks.. Find out who the drug addicts or just insane hot messes are. Party a bit, but keep your head.. Most of all have fun with it. Talk to the limo and cab drivers that work that club mostly.. Have a lunch or two with them.. They can quickly point out the girls to work with vs. the trifling dope head that will steal your money..

      Cut the girl in for like 5 to 10%.. The club will take 1 to 2%, remember that when you settle up with the girl.. This is as good as your bank card or credit card will let you max out.. You can even get fresh stacks of 100’s with this.. The money also disappears..

      Now the girl might have to worry about her taxes, that depends on how the club does their 1099 reporting.. Find out..

      Be calm and cool how you get to this.. It’s like dealing drugs, nobody smart does business with a random stranger.. Invest a bit to get in the “inside” of the club..
      Consider the month or so you take to get in a fun investment.

      If you’re married and have a good stable marriage, bring the old lady along for the fun.. Make clear to her what is really up and why.. Honestly, if you can’t, you better fix that more pressing issue before this economy takes the next dive.

    3. P.S. to my earlier post:

      Do this at the higher end clubs, known as “showclubs”.. They have the most expensive drinks in town, nice decor and usually avoid playing “urban” music like hip hop and rap.. You’ll know it’s the right place when you see the right “demographics” in the entertainers and customers.. The girls will be mostly model material..

      Steer clear of the youngest ones, be cautious of the older ones… Your best bet will be one of the older ones.. Talk with her.. Check her intelligence, get to know her and a few others.. Then decide who you can and can’t work with..

      The strip clubs have the most cash of anything in the U.S. right now.. Far more on a Friday night than several banks.

      Good luck!

  3. Speaking of which, there are some PHENOMENAL deals on rifles these days: S&W M&P15 for ~$550, RUGER AR556 for ~$650, AK platforms for ~$500. When the next anti-gun hysteria begins, we’ll look back at these as ‘the good ole days’.

  4. This, and a number of articles like this that I’ve read lately, are very disturbing. However, after “recovering” from their initial impact and thinking about how this may play out practically, I think that many of these efforts just won’t work (even for the PTB) and it will become obvious pretty quickly. It’s ridiculous to think that NIRP is benign – it’s already causing all kinds of problems and rates are just barely negative. Secondly, banning cash is just not going to fly. There are far too many small but important ways in which cash is used that a lot of push back by just about everyone will ensue. There is so little cash in circulation compared to all the digital currency that it’s just not worth the effort and “bad press” to eliminate it. Even if they just tried to eliminate “large” denomination bills (think of the poor Japs – their 10,000 yen Note is worth only about $88) there would be all kinds of lawsuits about “legal tender”, etc. Happily, there have been a number of court decisions that have opposed state tyranny recently.

    That said, I still think it’s wise to convert at least some of your savings to cash because if a lot of people start to do that the banks will run out very quickly. Here’s an interesting article about that: http://www.zerohedge.com/news/2016-02-27/global-run-physical-cash-has-begun-why-it-pays-panic-first

  5. What does Serbia have to do with high denomination Swiss bank notes? Perhaps the word should be Swiss instead of Serbia.

  6. The problem of unintended consequences will continue. I believe this will be the sequence
    1. NIRP to try and force more debt and more consumption
    2. People hoard cash and guns as noted here
    3. Outlaw cash to stop the hoarding and force debt and consumption.
    4. Outlaw guns to stop people from trying to protect themselves.
    5. People hoard silver and gold.
    6. Outlaw silver and gold ownership to force debt and consumption. Note this was one of FDR’s solutions to the great depression and it did not work.
    7. Depression of the economy and of the people.
    8. Revolution!!!!!!
    These guys never learn. On one issue Trump is right we really do have “Stupid Leaders”

  7. Every country that has had oppressive monetary policy that outright cheats the people has turned to alternative currencies or barter. This time will be no different.

    Negative rates will spur more gold and silver hoarding, more crypto currencies, more ‘black markets’.

    The system of the corrupt money printers is dying at their own hands.

    Good riddance.

Leave a Reply

Your email address will not be published. Required fields are marked *


Zero Fees Gold IRA

Contact Us

Send Us Your Video Links

Send us a message.
We value your feedback,
questions and advice.



Cut through the clutter and mainstream media noise. Get free, concise dispatches on vital news, videos and opinions. Delivered to Your email inbox daily. You’ll never miss a critical story, guaranteed.

This field is for validation purposes and should be left unchanged.