In 2014, the Securities and Exchange Commission passed a rule requiring prime money market funds to move from a stable $1 per share net asset value to a floating net asset value. It also allowed fund boards to lower redemption "gates" and fees in times of market stress. That means money market fund managers will have the ability to suspend redemptions to allow for orderly liquidation of fund assets. In other words, who knows when you can get your money from a money market fund!
Of course these new rules are just intended to increase fund liquidity and to protect investors. HA!
The real reason is likely that money market funds are one of the main obstacles to the Federal Reserve imposing Negative Interest Rates(NIRP). Rather than invest in securities or other assets that would decline in value in a NIRP environment, people would leave their funds in prime money market accounts.
Schwab is also forcing cash out of money market funds and into Treasuries. (Schwab)
This is all part of the war on cash, a concentrated effort by the U.S. Government, the Federal Reserve and the financial industry to eliminate the use of cash in American society. Of course we are told we don't need cash and only criminals and drug dealers use cash. HA HA! Therefore, they tell us it is in our best interest to get rid of cash in the U.S. economy. Here is another commentators description of how cash is being demonized. (Mark St Cyr)
Grant Williams, who spoke at the Mauldin Strategic Investment Conference this past week warns why physical cash is being eliminated. (Mauldin Conference)
Citizens need to be prepared to resist the elimination of cash from our society and it makes it extremely easy for the government to track and control your life. When the government needs funds to pay on the national debt, they can just take 10% or 20% of the funds from your electronic bank account and there will be no recourse.
Be alert and on guard!
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