It’s strange. Once upon a time, banks are the ones looking for people to deposit money with them so that they could make money from the deposited money. They go all out to woe your money. Banks pay depositors an interest rate for the deposit so that the banks can lend the money to someone else at a higher interest rate, thereby making the difference. That was what we were taught in schools. On top of that, the banks not only lend out the depositor’s money, but by a sleuth of hand, they are allowed by law to lend out many times more the sum deposited on the basis of the fractional reserve system. This “economics 101 (before 2008)” doesn’t seem to function anymore. Banks DON”T want your money now! And we were told that many banks are insolvent or on the brink of insolvency.
The Germans don’t want your money. The Swiss don’t want your money. Now the Danes don’t want your money. Interest rates in these countries (in their currencies) are now below zero. In short, you pay the banks to keep your money. Your kitty shrinks when your money is deposited with them. You thought this is crazy. Not quite, it is true. Why then deposit your money in the banks? Why not stuff them under the pillow or basement tin cans? Is there still sanity in the world of finance?
Probing further, the clue to this strange phenomenon may be very simple. Central banks can just print money as and when they need them. Hence, your money is of no value to he who can just print money. There is no reason to use your hard-earned money in the form of bank deposits and pay you interest when the printing press is nearby. Taking your money becomes a liability, while printing money is free. In fact, in the digital world, printing money is a misnomer. Printing money in effect means altering the entries in a computer with more zeros. Save paper, save the trees! So charging you for your deposit seems fair. Your money is NOT wanted.
But there will be public outcry if a central banker goes public and tell the illiterate man on the street that he can just print money. Hell will break loose and civil unrest break out everywhere. No sane man will allow a banker to just print money at will considering that wages are hard earned-money. So, with another sleuth of tongue, a new phrase was introduced into the financial lexicon. That’s QE (nothing to do with Queen Elizabeth, though she may be complicit in QE) – the blessed Quantitative Easing that is meant to ease the world’s suffering and financial woes. Whosoever says bankers print money do not understand finance and are out of touch with the latest economics and financial theories. Bankers don’t print money. Bankers QE money into existence. USA does it with trillions of USD. Japan does a Abenomics. According to Reuters, “ECB launches 1 trillion euro rescue plan to revive euro economy” just days ago. There was no money printing. Bankers are just doing their duties saving the world from financial Armageddon. Those idiots on the streets who believe bankers just print money must be hallucinating or illiterate in finance. (Read: Destructive Forces Now Being Unleashed Across The Globe)
We citizens of the world must continue to work hard and sweat for our financial masters. They are working harder than us, worrying day after day about debt and the amount of money to print. There are so many zeros in the financial statements that handheld calculators can no longer handle. They have to use tedious manual calculations or high speed computers to balance the books. Therefore, we must sympathize with them. See, many bankers have committed suicide in recent days (read banker suicides). We mortal man need to be more compassionate. Please do not envy them and let greed overtake you.
A false balance is abomination to the Lord: but a just weight is his delight. When pride cometh, then cometh shame: but with the lowly is wisdom. The integrity of the upright shall guide them: but the perverseness of transgressors shall destroy them. …