Schwab Ditching Money Markets For Fed Drip-line Proves U.S. Under Effective NIRP

Bye-bye money market:

``... between June and October 2016, Schwab will update the cash feature on your account(s) from the current retail prime or municipal money market fund sweep to the Schwab Government Money Fund" or the SWGXX, which "will invest at least 99.5% of its total assets in cash, U.S. government securities and/or repurchase agreements that are collateralized fully by cash and/or U.S. government securities; under normal circumstances, at least 80% of the fund's net assets will be invested solely in U.S. government securities including repurchase agreements. "

Talk about proof positive that the Fed didn't truly RAISE rates (tighten conditions) when it went to .25% -- it LOOSENED CONDITIONS by creating new repos where it was PAYING extra money into the financial system at the new rate... and now Schwab has abandoned ship from the private money market in favor of the Fed's new money-drip.

This dovetails with the point made in the comments at the bottom of this post -- namely that this sort of "NIRP structure", once put in place by a central bank, cannibalizes the private financial market and suffocates the economy, thus "incentivizing" central banks to do more of the same. Even though the Fed isn't "officially" at negative rates (because a few bucks occasionally change hands in the other direction in the rump-Fed funds market), it's structuring the money flows in and out of itself like any negative rate central bank... i.e. it is cannibalizing the normally-functioning financial system in a way that feeds on itself...