By J. D. Heyes. As we predicted, the cash crisis in America is beginning, and the occasion has been marked by a recent announcement from one of the country’s largest banks. Beginning May 1, JPMorgan Chase will begin charging certain (wealthy) depositors for the “right” to keep their money in JPMorgan Chase banks.

As noted by GovtSlaves.info, the bank sent some of its larger depositors a letter that said it would charge them a “balance sheet utilization fee” of 1 percent annually on deposits in excess of the money they require for operations. In other words, that amounts to a negative interest rate on many of those deposits.

“The targeted customers – mostly other financial institutions – are already snatching their money out of the bank,” Bloomberg News reports, adding that this is “exactly what Chief Executive Officer Jamie Dimon wants. The goal is to shed $100 billion in deposits, and he’s about 20 percent of the way there so far” . . .

Peter Coy, writing for Bloomberg News, urged readers to “pause for a second” to “marvel at how strange this is.” Historically, banks have always paid interest to depositors; it was a reward, of sorts, to depositors by the banks for the use of depositors’ money to make loans and conduct additional financial business that enabled the bank to make money.

Now, however, keeping huge amounts of cash on hand is apparently no longer seen as good business. Large financial institutions like JPMorgan Chase are shunning cash unless customers “are willing to pay for the privilege” of depositing it, Coy wrote. (Read more from “The Cash Crisis Begins as Chase to Start Charging 1% Fee on Bank Deposits” HERE)

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The Death of Cash

By Peter Coy. JPMorgan Chase recently sent a letter to some of its large depositors telling them it didn’t want their stinking money anymore. Well, not in those words. The bank coined a euphemism: Beginning on May 1, it said, it will charge certain customers a “balance sheet utilization fee” of 1 percent a year on deposits in excess of the money they need for their operations. That amounts to a negative interest rate on deposits. The targeted customers—mostly other financial institutions—are already snatching their money out of the bank. Which is exactly what Chief Executive Officer Jamie Dimon wants. The goal is to shed $100 billion in deposits, and he’s about 20 percent of the way there so far.

Pause for a second and marvel at how strange this is. Banks have always paid interest to depositors. We’ve entered a new era of surplus in which banks—some, anyway—are deigning to accept money only if customers are willing to pay for the privilege. Nick Bunker, a policy analyst at the Washington Center for Equitable Growth, was so dazzled by interest rates’ falling into negative territory that he headlined his analysis after a Doors song, Break on Through (to the Other Side).

In recent months, negative rates have become widespread in Europe’s financial capitals. The European Central Bank, struggling to ignite growth, has a deposit rate of –0.2 percent. The Swiss National Bank, which worries that a rise of the Swiss franc will hurt trade, has a deposit rate of –0.75 percent. On April 21 the cost for banks to borrow from each other in euros (the euro interbank offered rate, or Euribor) tipped negative for the first time. And as of April 17, bonds comprising 31 percent of the value of the Bloomberg Eurozone Sovereign Bond Index—€1.8 trillion ($1.93 trillion) worth—were trading with negative yields. (Read more about the fee on bank deposits HERE)

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