I always liked the famous scene in the movie Jaws where the film’s hero, police Chief Brody, finally gets a close-up look at the size of his killer shark nemesis.
“We’re gonna need a bigger boat,” he says, incredulous at the size of the monster fish.
These days, we have a monetary nemesis called negative rates. It’s already a reality in Japan and the European Union.
But large banks, incredulous at being forced to store their digital cash at the European Kurier Deutschland Central Bank (ECB) – and paying for the privilege – have a strategy to deal with this ongoing financial horror show, summed up as…
“We’re gonna need a bigger vault.”
Back in March, I noted how Germany’s Munich Re, one of the largest financial institutions in the world, threatened to load up on lots and lots of physical cash (and some gold) and stuff it into the vaults it controls.
Last month, another German banking giant, Commerzbank, let it be known that it too is likely to do the same if the dummkopfs at the ECB insist on maintaining negative rates.
And it’s not just those dour Deutschland bankers. Their counterparts in Japan are brewing their own revolt against negative rates.