With zero interest rate policies already happening in Japan, the winds of change have brushed up farther west to the shores of the U.K. as Natwest warns businesses might have to pay to hold cash... Hmmm, let's examine.
Currently, UK policy only allows businesses to pay to hold cash at banks, but A number of large banks including HSBC, The Post Office and First Direct are already offering savings accounts with rates as low as zero. What is the next step as economies continue to support tightening lending policies? (http://www.telegraph.co.uk/news/2016/07/25/savers-fear-negative-interest-rates-as-natwest-warns-businesses/)
Think of this for a moment.... Over the past 6 years, Deutsche Bank's stock has been demolished from trading in the high $140's all the way down to $14 due to its disastrous derivatives book (the bomb waiting to happen). Italian Banks' bad debt currently equals 20% of the country's total GDP causing their shares to be slashed by a third (http://www.ft.com/cms/s/0/a594eb58-443c-11e6-b22f-79eb4891c97d.html#axzz4FZZi2u00),
With Japan going negative, the Eurozone financially stressed out, and the US Equities markets being propped up by stock buybacks rather than R&D and hiring capital, (http://seekingalpha.com/article/3968290-stock-buyback-conundrum-will-companies-keep-much-longer) do you believe this model is sustainable? If so, for how long, and what, aside from a rape and pillage of savers would do so? Sound off!
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