Imagine having to pay your bank to save your money with it…

I’m not talking about fees. I’m talking about a negative interest rate on your savings.

Instead of paying you interest… your bank confiscates a percentage of your nest egg every year.

It sounds like a version of capitalism from Alice in Wonderland.

But it’s the grim reality millions of German savers face today. As The Wall Street Journal reported on Monday…

Germany’s biggest lenders, Deutsche Bank AG and Commerzbank AG, have told new customers since last year to pay a 0.5% annual rate to keep large sums of money with them. The banks say they can no longer absorb the negative interest rates the European Central Bank charges them. […]

That is creating an unusual incentive, where banks that usually want deposits as an inexpensive form of financing, are essentially telling customers to go away.

German savers aren’t going to do much better by buying German government bonds, or bunds. The yield on the 10-year bund is minus 0.3%.

You have to pay to loan your hard-earned cash to the German feds. And they get paid to borrow. That’s about as through the looking glass as it gets…

You may not care too deeply about the plight of German savers. But as I (Chris Lowe) will show you in today’s dispatch, today’s Germany is tomorrow’s America.

As you’ll see, one savvy investor sees negative rates coming as soon as 2022.

Fortunately, there’s a way to sidestep negative rates… in the crypto market.

With one simple move you can make today, you can pick up fat income streams – no matter where interest rates go next.

First, a quick shoutout to new readers…

Every week, thousands of new readers sign up to one of the 19 paid investment advisories we publish at Legacy Research.

It’s the publishing alliance among Palm Beach Research Group, Brownstone Research, Casey Research, and Rogue Economics.

If you’re one of our new readers, congratulations. You want access to the most explosive investment opportunities in the market today. And you know you’re not going to find those kinds of ideas in the mainstream financial press.

That’s where The Daily Cut comes in…

Each day, I bring you the best “curated” moneymaking ideas from Teeka Tiwari, Jeff Brown, Dave Forest, Nick Giambruno, Jason Bodner, and the rest of the Legacy team.

And I don’t write to you only about opportunities to grow your wealth.

I also look out for threats to your wealth. And right now, vanishingly small… or negative… interest rates are one of the biggest challenges you face as a wealth builder.

We’ve been warning about negative interest rates for years…

In June 2014, at a subscriber conference in France, Legacy cofounder Bill Bonner described the world of negative interest rates as “Neverland,” after Michael Jackson’s ranch in California.

Both, Bill said, were “places where anything can happen… and something bad always does.”

Now, nearly seven years after Bill’s warning, mainstream investors are waking up to the threat.

Scott Minerd is one of them. He’s global chief investment officer at fund manager Guggenheim. He manages $310 billion of client funds there. And he has the best market intelligence money can buy.

As he told CNBC’s The Exchange this week, a model his firm uses to make investment decisions is flashing an important warning…

Our work shows […] we’re going to have a 10-year yield that’s negative. The mean expectation is for it to be about negative half of one percent.

Minerd’s model shows the yield on the 10-year Treasury note going negative by next year.

And he isn’t the only smart investor sounding the warning…

Warren Buffett is also worried…

Buffett is arguably the greatest investor alive. He heads up investment company Berkshire Hathaway (BRK.A).

Since he took over the firm in 1965, it’s racked up average annual gains of 20%. If you had invested $10,000 in BRK.A at the end of 1964, you’d now have over $270 million.

Over the weekend, Buffett warned his shareholders about disappearing income in the bond market…

And bonds are not the place to be these days. Can you believe that the income recently available from a 10-year U.S. Treasury bond – the yield was 0.93% at yearend – had fallen 94% from the 15.8% yield available in September 1981? In certain large and important countries, such as Germany and Japan, investors earn a negative return on trillions of dollars of sovereign debt. Fixed-income [aka bond] investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future.

Luckily, there’s a way to escape negative rates…

It’s easy. It’s available to everyone.

And it’s in the crypto market.

I know that may sound strange…

Bitcoin (BTC) and other cryptos are known for their rocket-like price appreciation… not for being steady income investments.

But over the past three years, a growing group of pioneering investors have been earning fat income streams from their crypto.

You may have learned about one type of crypto income opportunity we call “Tech Royalties” from colleague and crypto investing expert Teeka Tiwari.

He hosted an online summit about them last week. And it was a big hit among your fellow readers. (You can catch a free replay here.)

But today, I want to focus on a different, super simple way to pick up income on cryptocurrencies you own. And that’s depositing them with a crypto lender.

The biggest and best-known is BlockFi…

It operates in all 50 U.S. states.

And it allows you to use the cryptocurrency you own to earn annual interest rates of 3% up to 9.3%…(Note that in New York, you can use BlockFi only to take out a loan – not to earn interest or trade cryptos.)

You just open an account with BlockFi… and deposit your crypto in it. BlockFi then lends out your crypto to trusted institutional and corporate borrowers.

These loans are all over-collateralized. Borrowers have to put in enough collateral to cover potential losses in case of default. This makes loaning out your crypto on this platform extremely safe.

BlockFi pays you 6% a year on bitcoin deposits…

That’s about 4x the income available today on the 10-year U.S. Treasury note.

It’s 30x the average yield of 0.2% available on a 1-year CD in a regular bank.

And bitcoin is only the start…

You can earn 5.25% a year by depositing your ether (ETH) with BlockFi. It’s the world’s second-most valuable cryptocurrency, after bitcoin.

And you can earn 8.6% by depositing your Paxos Standard (PAX) with BlockFi. It’s a so-called stablecoin whose value moves in lockstep with the U.S. dollar.

You can even earn income on gold with BlockFi. It pays 5% a year on PAX Gold (PAXG) accounts.

Each PAXG coin is backed by one fine troy ounce of a 400-ounce gold bar, stored in vaults run by Brink’s.

Signing up for an account with BlockFi is easy… and takes just minutes. So if you own crypto, and you want to boost your returns with streams of income, it’s worth checking out.

There’s a lot more to say about this opportunity. But I’m running out of space today. So stay tuned for more tomorrow – including how the income you earn in the crypto market can explode higher.



Chris Lowe
March 3, 2021
Bray, Ireland