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“There could be a point where you’d really want to start withdrawing currency…”
So says Berkshire Hathaway (BRK) Chairman Warren Buffett in a recent CNBC interview. The “superinvestor” discussed the effects of negative interest rate policies (NIRP) around the globe.
“Are you talking about a potential run on the banks, essentially?” The interviewer seemed embarrassed to ask such an “outlandish” question.
Buffett mentioned he’d consider removing his company’s funds from the bank if they started charging him to keep it there. Right now he’s got a $60 billion hoard earning just 0.25%.
Buffett went on to mention the case of Munich RE. The European reinsurance company (an insurer of other insurance agencies) is the world’s second largest. It manages $231 billion in investments. And it began a radical experiment earlier this year…
To avoid negative interest rates, the company started storing $11 million in paper money in a vault. We covered the move in a Daily piece titled “The great global bank run has begun.”
One reader called our negative interest rate coverage “irresponsible journalism” and “fearmongering at its worst.”
Yet only months later, Warren Buffett is discussing the exact scenario—a massive global bank run—on CNBC. It doesn’t get more “mainstream” than that…
Bottom line: The forces at work here are real. Follow Tom’s advice: Pull some cash out of the corrupt banking system right now. As the world descends deeper into negative interest rates—and even more exotic “wealth taxes”—you’ll be glad you did.
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