{"id":3118,"date":"2015-04-29T14:06:22","date_gmt":"2015-04-29T18:06:22","guid":{"rendered":"http:\/\/www.silver-investor.com\/blog\/?p=3118"},"modified":"2018-06-10T10:54:51","modified_gmt":"2018-06-10T10:54:51","slug":"chase-cracks-down-on-cash-is-your-bank-next","status":"publish","type":"post","link":"https:\/\/www.themorganreport.com\/blog\/chase-cracks-down-on-cash-is-your-bank-next\/","title":{"rendered":"Chase Cracks Down on Cash… Is Your Bank Next?"},"content":{"rendered":"

 
\nChase Cracks Down on Cash… Is Your Bank Next?
\nby Clint Siegner<\/strong>
\nThe War on Cash Escalates<\/strong>
\n\"Image1\"<\/a>The Federal Reserve bank and its owners, the largest banks on Wall Street, want badly to be able to charge you interest for the privilege of depositing your funds. The problem is getting you to stand for it.
\nDepositors already complain vigorously about zero percent returns on checking and savings accounts. If they must start actually paying the bank to hold funds on deposit, many will opt to simply withdraw the cash and stuff it under their mattress or into a safe deposit box. That simply won\u2019t do.
\nThe Goal Is to Force You to Deposit Cash and Charge YOU<\/u> Interest<\/strong>
\nBankers in the U.S. can learn something from the Swiss. The Swiss National Bank recently implemented negative interest rates without first solving the “problem” of how to prevent cash from fleeing the banks. Predictably, depositors started doing some math.
\nIn one example, a sizable Swiss pension fund, calculated it would save 25,000 francs for every 10 million it held in the bank by simply withdrawing those millions and taking the bales of paper francs to be kept in a vault. The vault storage fees are less expensive than the negative interest rate.
\nJumping the gun on the implementation of negative rates put the Swiss banks in an awkward situation. Like all fractional reserve lenders, they don\u2019t have anywhere near enough cash to make good on the withdrawals that may be coming. The bank holding the pension money had little choice but to refuse the client\u2019s demand for millions of francs \u2013 funds the client is contractually entitled to. Telling clients \u201csorry, you can\u2019t make a withdrawal\u201d never goes over too well!
\nNevertheless, the Swiss National Bank is sticking to its guns. It is encouraging retail banks to be \u201crestrictive\u201d with regards to cash withdrawals. And it is berating actors such as the pension fund for trying to circumvent negative interest rates. Apparently no one should be questioning the wisdom behind the policy! But the bluster isn\u2019t hiding the fact that bankers stand upon shaky legal ground. The potential for a run on the banks remains.
\nInsiders here look anxious to avoid a similar situation. Willem Buiter, the chief economist at CitiBank, thinks he\u2019s got the answer<\/a> to this banker\u2019s quandary. Simply abolish cash. Or tax it punitively. He isn\u2019t the only one supporting this radical solution. Other economists, including the prominent Harvard professor Kenneth Rogoff, also think banning cash is a grand idea.
\nIf depositors\u2019 response to negative interest rates is predictable, so is the reaction from central planners. Effective herding is all about limiting the escape routes for members of the herd.
\nEliminating physical cash may well be a longer-term project, but it is not something the Fed can likely implement any time soon. In the meantime, there are other ways to prevent depositors from making their escape.
\nFor starters, officials can criminalize the use of cash<\/a> above certain amounts.
\nBanks can also implement new policies of their own. Joseph Salerno from the Mises Institute discovered <\/a>JPMorgan Chase leading the way. The bank very recently began test driving new rules in Cleveland as well as other markets. The bank will no longer accept cash from customers who want to use it to make mortgage payments, pay credit card balances or to cover their automobile loan.<\/u>
\nNo Cash or Bullion Allowed in Safe Deposit Boxes<\/strong>
\n\"Image2\"<\/a>Chase also rolled out new restrictions on what can be put into safe deposit boxes. The \u201cUpdated Safe Deposit Box Lease Agreement\u201d customers must sign states, \u201cYou agree not to store any cash or coins other than those found to have a collectible value.\u201d
\nExpect other banks to follow suit shortly. The new rules go on top of decades of inflationary monetary policy, making paper currencies worth perpetually less over time. Clearly bankers are plumbing customers\u2019 tolerance for pain.
\nMore and more people will be looking for ways to make it stop. This is where things promise to get interesting for gold and silver investors<\/a>.
\nFinancial repression, the attempt to force citizens to accept the government shears, has long been a driver of demand for physical precious metals. This demand will accelerate as measures become more draconian. Some bank customers, perhaps even the Swiss pension fund mentioned above, will decide that bullion is a better option than sitting on bales of depreciating paper currency or paying banks to hold deposits.
\nHere in the U.S., the banks are central to just about all bureaucratic efforts at control. Look for droves of people to try and sidestep the banks and the dollar itself. The next decade or two is almost certain to see rapid innovation in alternative ways to store value and transact. Ways that preserve privacy and are beyond the reach of bureaucrats. As these new systems seek to gain trust and acceptance, precious metals are almost certain to play a much bigger role.
\n <\/p>\n

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.
\nAs publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time!<\/strong> Where will you be when this happens?<\/p><\/blockquote>\n

 
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  Chase Cracks Down on Cash… Is Your Bank Next? by Clint Siegner The War on Cash Escalates The Federal Reserve bank and its owners, the largest banks on Wall Street, want badly to be able to charge you interest for the privilege of depositing your funds. The problem is getting you to stand forMore<\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[121,89],"tags":[],"yoast_head":"\nChase Cracks Down on Cash... Is Your Bank Next?<\/title>\n<meta name=\"description\" content=\"Chase Cracks Down on Cash... 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