Relevant:
- Cash Is King as Europe Adapts to Negative Interest Rates
- Banks Warn Fed They May Have To Start Charging Depositors
- Schwab Ditching Money Markets For Fed Drip-line Proves U.S. Under Effective NIRP
- ECB Doing Whatever It Takes Can't Push Euro-Area Banks to Lend
- Japan to print additional ¥10,000 bills as more people stash their cash at home
2016-03-03 — wallstreetexaminer.com
Why does capital flow from Europe to the US as fast as Stupor Mario can print it? This is so simple, even a caveman would get it, but unfortunately, put 12 central bankers in a room and they lock the door to keep reality out. Capital flows to the US because Europe has negative interest rates (NIRP) and the US has positive interest rates. Big investors, speculators, businesses, and securities dealers all have the option of where to send and keep their money, and if Europe is stupid enough to tax them for keeping cash there, then by god, they'll just move it somewhere else.
...
Money printing in the form of the ECB's asset purchases should cause a euro for euro increase in deposits, but that has not occurred. That's because a substantial portion of the ECB's newly printed money flees the Eurozone altogether to avoid the NIRP tax. Total deposits are barely higher than the level reached when the ECB began outright QE in March 2015.
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