Europe has officially gone full retard. Yeah, we know, Europe was starting to grow again and the six year crisis was now behinds us. Well Europe is doing so peachy and people are so awash with cash that it is now time to pay the bank so they can “safeguard” money. You heard right, ECB Chair and ex-Goldman Sachs alum Mario Draghi has lowered main interest rates.
More detail from Business Insider…
Specifically, the ECB cut the deposit rate to -0.1%, from 0.0%, effective from June 11, 2014.
This is a historic development, as it’s the first time a major central bank has cut any main interest rate to negative in a bid to spur lending and spending.
And Zerohedge sums it up nicely:
Today’s decision by the ECB to officially lower the deposit facility rate to negative (as in you pay the bank to hold your deposits) is shocking, but not surprising.
We can sum up the European reality as something along the lines of…paying the banks interest on home loans, credit cards, car loans, etc…and then paying the banks again that little extra every month to hold on to your actual deposits. Meanwhile the IMF, ECB and other Brussels bureaucrats come in every now and again to take a little deposit haircut off the top (Cyprus style) or simply levy austerity taxes on your property until they beat you into serfdom submission.
Ah the European dream is alive and well.