Starting today, the Royal Bank of Scotland will become the first bank in the U.K. to impose a negative interest rate on depositors. The negative rate will apply only to corporate customers, including mutual fund managers and pension funds, holding deposits of certain foreign currencies including euros. This means that RBS—in which the U.K. government still maintains a majority ownership stake since its 2008 bailout—will actually charge these customers to “borrow” their deposits. A few weeks ago, RBS notified more than one million small-business customers that they could also be charged for deposits if the Bank of England lowered the target interest rate, which now stands at .25%, into negative territory. Experts are warning that the latest move by RBS would “set alarm bells ringing” among small businesses and ordinary customers. The stage is set for a glorious and long overdue old-fashioned bank run if the BOE ventures to push rates into negative territory.
Meanwhile in the eurozone, since the ECB rate cut the interest rate in March to minus 0.4%, banks have paid a total of about 2.64 billion euros to keep their funds on deposit at the eurozone’s 19 central banks. With European central bankers threatening further rate cuts, private financial institutions are exploring the feasibility of circumventing the charges by converting central bank electronic deposit credits into cash and storing it in nonbank facilities. The German insurance company Munich Re is reportedly already storing tens of millions of euros at “a manageable cost,” and Commerzbank, Germany’s second biggest lender, is considering a similar option.
Of course any significant movement to convert bank reserves into cash would undermine the goal of central-bank rate cutting, because the cost of holding bank reserves in cold hard cash would not respond to a change in interest rates, short circuiting central bank efforts to stimulate further bank lending. More significant, if the movement to convert deposits into cash spreads to the nonbank public, it would bring down the fractional-reserve banking system in short order.
The neoconservatives were the driving force in the George W. Bush administration’s war on Iraq and, in so doing, went a long way toward forming US policy in the Middle East that has continued under Obama.
Neoconservatism emerged at the tail end of the 1960s as some individuals, predominantly pro-Zionist Jewish intellectuals, became disenchanted with the more radical turn of mainstream liberalism, which among other things, they believed, had become threatening to Jewish interests, including Israel.
After failing in efforts to convert the Democratic Party to their thinking, the neocons would switch from the Democratic Party to the Republican Party as Ronald Reagan became president in 1980 and would play a significant role in pushing the Reagan administration’s hardline anti-Soviet foreign policy. With the demise of Soviet Communism, the neocons’ foremost concern became Israel and the Middle East.
Before the beginning of the George W. Bush administration in 2001, the neocons had developed plans for reconfiguring the Middle East, involving the use of military force to replace dictatorial regimes with democracies. Not by happenstance, the targeted dictatorial regimes were staunch enemies of Israel, and included Iraq, Iran, Syria, and even Saudi Arabia. The neocons planned to begin with Saddam’s Iraq, seen as the weakest link, the elimination of which would pave the way for regime change elsewhere.
Breaking: Did Washington Just Declare a 'No Fly' Zone in Syria?
Reading between the lines in today's Pentagon press briefing, a bombshell US policy shift is becoming more apparent: Syrian forces and their Russian partners are being told that conducting military operations in some parts of Syrian airspace opens them up to being shot down by the US military.
US Warns Syrian Military...Against Operating Inside Syria!
Just when you thought US foreign policy could not get more absurd. Lt. Gen. Stephen Townsend, who is listed as "commander of US forces in Iraq and Syria," has issued a warning to the Syrian military that if its counter-insurgency operations on Syrian soil leave US troops on Syrian soil "feeling threatened," the US military would "defend itself."
Five Minutes Five Issues: Disappearing Trials, Trump’s Taxes, Indian Marijuana, Hospital Bombing, Freest States
A new episode of Five Minutes Five Issues posted on Saturday. You can listen to it, and read a transcript, below. You can also find previous episodes of the show at Stitcher, iTunes, YouTube, and SoundCloud.
‘Aleppo Child Survivor Image Will be Used as Propaganda for More War - Not Less’
When the government wants you to cry over something – a very murderous government – you have to look beyond that and think ‘what are they trying to do, what additional killing are they trying to justify’, Lew Rockwell, chairman of the Mises Institute, told RT.
Ron Paul: US Intervention Contributes to Risk of Ukraine Fighting Expansion
Ron Paul, interviewed Friday by Stuart Varney at Fox Business, says “trouble has been brewing” around Ukraine since the United States government in 2014 “participated in the coup” in the European nation, resulting in political upheavals including the ousting of President Viktor Yanukovych. The coup also set in motion developments leading to secession of Crimea from Ukraine and fighting between the Ukraine government’s forces and people in eastern Ukraine.