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Saturday, March 19, 2016

Libya’s U.N.-backed government to move to Tripoli within days

Libya’s U.N.-backed unity government will move to Tripoli from Tunis “within a few days”, its prime minister said in a television interview broadcast on Thursday.

Fayez Seraj said a security plan agreed with police and military forces in Tripoli, with some armed groups, and with the United Nations, would allow the Presidential Council and the government it nominated to transfer to the Libyan capital.

The unity government was named under a plan to end the political chaos and conflict that has beset Libya since the uprising that toppled Muammar Gaddafi five years ago.

Since 2014, the country has had two rival parliaments and governments, one based in Tripoli and one in the east.

“We, the government of national accord, will be in the capital Tripoli soon … within a few days,” Seraj told Jordan-based Libya HD channel in a pre-recorded interview.

“The armed groups will remain in their camps until an agreement is found with them about whether their members will be integrated and young people absorbed within certain programs according the security plan,” he said.

The unity government has faced opposition from hardliners on both sides of Libya’s political divide, and the prime minister of the government based in Tripoli this week warned the unity government not to move there.

But Western powers have been pushing hard for the unity government to start work, hoping that it will be able to tackle the threat from Islamic State, both by drawing together Libyan armed factions, and by requesting international help.

Libyan prime minister-designate under a proposed National Unity government Fayez Seraj attends a joint news conference with European Union foreign policy chief Federica Mogherini in Tunis, Tunisia January 8, 2016. REUTERS/Zoubeir Souissi

Seraj said the Presidential Council saw a need to take advantage of the “international momentum” around Libya, but it was up to Libyans to determine their needs.

“If the international community provides assistance I do not think the Libyans would reject that, but within the rules and standards, and according to what Libyans want,” he said.

“Direct intervention is unacceptable, and we have sent that message clearly.”

Credit to True News
Read more at http://www.trunews.com/libyas-u-n-backed-government-to-move-to-tripoli-within-days/#HmdKy0eHR0u2IYhX.99

German Response to Negative Interest Rates: Safe Deposit Boxes

Image result for safe box

The Japanese response to negative interest rates was to buy personal safes. The German response is to pull money out of bank accounts and stick it in safe deposit boxes. Both are perfectly understandable reactions to the prospect of having to pay interest to a bank for holding deposits. It is particularly interesting in Germany, where the Bundesbank a few years ago admitted that the average real rate of return on savings deposits has been negative for nearly the past 40 years. Now that nominal rates have turned negative too, the facade of savings accounts as a safe place to park money to earn a little bit of income has finally been ripped away.

The major risk, of course, is that because of the fractional-reserve banking system, if enough depositors withdraw their funds the bank collapses. If a bank maintains a reserve of 10% and depositors withdraw a total of 10% of their deposits, the bank will have no money left to satisfy withdrawals, pay checks drawn on the bank’s accounts, etc., and will have to cease operating. In fact, even less than 10% of deposits being withdrawn can start to lead to problems with payments. If that were to happen the bank would have to start coming to the discount window for help. If it had to rely on discount window lending enough times, regulators might look to shut the bank down preemptively. If a big enough bank goes down, or if enough banks find themselves in such a situation, panic might set in and result in a bank run, with depositors rushing to withdraw their money while they still can. Witness the situation in Cyprus a few years ago.

That is the risk that the move toward negative interest rate entails, but one which no central bank is willing to admit. It must be sitting at the back of policymakers’ minds, but they probably think that if they don’t discuss the possibility of a total collapse of the banking system then it won’t ever happen. We are in uncharted waters right now, with central bankers who have failed over and over again yet who still possess an unshakable confidence in their own knowledge, expertise, and abilities, the “pretence of knowledge” which Hayek so eloquently explained. A banking system collapse is closer now than at any time previously, and probably closer than anyone suspects, which is why negative interest rates are so dangerous. All it takes is just one more rate cut, one more move into a further negative territory to push enough people off the edge, to get them to withdraw their deposits, which will result in a severe banking panic. Central banks are playing with fire when they institute negative interest rates and we’re all at risk of getting burned.

Credit to lewrockwell.com