Europe is now ground zero for the war on cash.
Europe is perhaps the most centrally controlled political system in the world: a place in which political and economic policies range from socialist (the public sector accounts for 30% of “free market” German’s employment) to extremely socialist (the public sector accounts for 56% of France’s employment).
As such, Europe is where a Central Banker can implement the most insane policy and get away with it.
Remember, it was Europe that first implemented “bail-ins” in which deposits were STOLEN to bail out a bank.
It was also Europe that first implemented Negative Interest rate Policy or NIRP.
And it was Europe that banned using physical cash in numerous transactions: France and Spain have banned any transaction over €1,000 or€2,500, respectively, from using physical cash.
Despite having implementing both NIRP and QE, Europe’s economy is lurching back towards deflation. So now the ECB is looking into even more extreme measures to trash cash in an attempt to drive capital into risk assets.
At the top of the list?
Staggering charges on banks that are “hoarding cash.”
Euro zone central bank officials are considering options such as whether to stagger charges on banks hoarding cash or to buy more debt ahead of the next European Central Bank meeting, according to officials.
Little over a week before the meeting to set the ECB’s policy course, numerous alternatives are open, from snapping up the bonds of towns and regions to introducing a two-tier penalty charge on banks that park money with the ECB.
Officials, who spoke on condition of anonymity, said that even buying rebundled loans at risk of non-payment has been discussed in preparatory meetings, although such a radical step is highly unlikely for now. The ECB declined to comment.
Source: UK Reuters.
That’s correct. Sitting on cash is now an evil thing according to Central Bankers in Europe.
This is not the end of the war on cash. Ultimately it will culminate in efforts to impose a carry tax on physical cash if not ban cash outright.
Indeed, we’ve uncovered a secret document outlining how the Fed plans to incinerate savings to force investors away from cash and into riskier assets.