If cryptocurrency is the enemy of the banks, why are they doing their best to help it out?
This is a strange twist in the plot that is unfolding.
The banking system enjoyed free reign for close to a century. They operated in a manner where allowed for the manipulation of just about everything, including the global economy. This was all done in an effort to pad their pockets.
It worked too.
Over the last 100 years, the inequality of income as just grown. As more people were fostered into "jobs" as small businesses were obliterated by the big boys, income levels started to flatten. This, of course, was only for those at the lower and middle end of the spectrum. Those at the top saw their incomes explode.
Such was the tail of Wall Street. We know much of the "growth" we saw was really just the distribution of debt. Globally, debt levels exploded to the point where insolvency is likely. There is no way to service all this debt, let alone pay it back.
Nevertheless, the bankers are still at it. We see their manipulation going full tilt. These days, their solution to everything is more debt.
To aid in this process, interest rates are at "historic lows". In fact, much of Europe is operating under negative interest rates. Oh what a time to be a debtor.
Of course, this completely screws over those who save. Essentially, with negative interest rates, one has to pay the bank to hold his or her money.
Even the bankers know how absurd this is. Last month, German Finance Minister Olaf Scholz told banks not to pass on the rates that the ECB was issuing to them.
Not all of them are listening.
Berliner Volksbank is one of the largest banks in Germany. It decided that it is going to pass on a -0.5% rate on deposits over 100,000 EUROS.
Some might think this is okay since it is only applying to the wealthy but that is not how things work.
What do you think those with deposits in this amount are going to do? Will they sit there and take the shave each year on their holdings?
Most likely not. They will pull their money out and move it elsewhere. This is one reason I believe the United States, as screwy as it is, can still sell its bonds. What would you prefer on your 100K EUROs, -0.5% of 1.6%? The answer is clear.
The next step is when the bank realizes the larger accounts are being cleaned out, thus they get the bright idea to lower the bar. Next up, 50,000 EURO deposits. Then 25,000. Perhaps 10,000 after that.
Keep in mind, the income tax in the United States was sold to the public as being a tax on the wealthy. Europe has repeatedly pulled the same stunt with the VAT.
With negative interest rates, one is guaranteed to have less money at the end of the year as compared to the beginning. This is where cryptocurrency can provide an alternative. While it is enormously volatile, there is the chance that solid projects will go up. This means that a lot of money over the next couple years could shift out of the traditional banking system and into cryptocurrency. I believe that decentralized finance (DeFi) is starting to explode.
Ultimately, investors (and even some savers) look for returns. We are seeing this being eliminated in the existing banking system. Hence, why would anyone keep the majority of their money there?
It will take some time before regular people start to trust cryptocurrency. That said, I would not be surprised to see a number of the big players start to use crypto as a hedge against what the central banks are doing.
This is only the start. I surmise you can expect a lot of the other banks in Germany to follow suit. This is going to open the floodgates. The bankers see a way to bilk people out of more money.
That is an opportunity that, based upon their track record, is impossible to pass up.
If you found this article informative, please give an upvote and resteem.