Greenspan is likely to cut interest rates to 1% next week.

US banks warn that if official rates fall below 1 per cent, they will start to have trouble covering costs on cash accounts and may be forced to charge interest instead of paying it.

"Rates are now so low some people are wondering if it makes more sense to store their money under the mattress," said Rory Robertson, a New York economist for Macquarie Bank.

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