«One of the truly mind-boggling absurdities in modern finance has been the creation of ‘negative interest rates’ around the world… This trend has persisted across Europe, Japan, and many other parts of the world, but not America… until now!»
One of the truly mind-boggling absurdities in modern finance has been the creation of ‘negative interest rates’ around the world.
Negative interest rates are particularly prominent in Europe.
Starting back in 2014, the European Central Bank (ECB) slashed its main interest rate to below zero.
One bizarre effect of this policy is that some banks have passed on these negative interest rates to their retail depositors.
This trend has persisted across Europe, Japan, and many other parts of the world.
Yet at least Americans were able to breathe a sigh of relief that negative interest rates hadn’ t crossed the Atlantic.
Well, that’s not entirely true.
Recently I was reading through Bank of America’s most recent annual report; it’s filled with some shocking facts about the -real- level of wealth in the Land of the Free… which I’ ll tell you more about next week.
But here’s one of the things that caught my eye: Bank of America has $592.4 billion in deposits from retail customers, i.e. regular folks who bank at BOA.
And according to its annual report, BOA paid its retail depositors an average interest rate of 0.04% last year.
Seriously. That’s a tiny, laughable amount of interest. But hey, at least it’s positive.
That 0.04% average rate means the bank paid its retail depositors a total of $236 million in interest.
Yet at the same time, Bank of America charged those very same retail depositors $4.
