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    Default Re: War on cash

    War On Cash Escalates: China Readies Digital Currency, IMF Says "Extremely Beneficial"

    Submitted by Tyler Durden on 01/20/2016 19:20 -0500


    Remember when Bitcoin and its digital currency cohorts were slammed by authorities and written off by the elite as worthless? Well now, as the war on cash escalates, officials from The IMF to China are seeing the opportunity to control the world's money through virtual (cash-less) currencies. Just as we warned most recently here, state wealth control is the goal and, as Bloomberg reports, The PBOC is targeting an early rollout of China's own digital currency to "boost control of money" and none other than The IMF's Christine Lagarde added that "virtual currencies are extremely beneficial."

    By way of background, as we explained previously, What exactly does a “war on cash” mean?
    It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.
    These limits are broadly called “capital controls.”

    Why Now?
    Why are governments suddenly so keen to ban physical cash?

    The answer appears to be that the banks and government authorities are anticipating bail-ins, steeply negative interest rates and hefty fees on cash, and they want to close any opening regular depositors might have to escape these forms of officially sanctioned theft. The escape mechanism from bail-ins and fees on cash deposits is physical cash, and hence the sudden flurry of calls to eliminate cash as a relic of a bygone age — that is, an age when commoners had some way to safeguard their money from bail-ins and bankers’ control.

    Forcing Those With Cash To Spend or Gamble Their Cash
    Negative interest rates (and fees on cash, which are equivalently punitive to savers) raise another question: why are governments suddenly obsessed with forcing owners of cash to either spend it or gamble it in the financial-market casinos?

    The conventional answer voiced by Mr. Buiter is that recession and credit contraction result from households and enterprises hoarding cash instead of spending it. The solution to recession is thus to force all those stingy cash hoarders to spend their money.

    * * *
    And so now we see China pushing for the early unleashing its own virtual currency, as Bloomberg reports
    Quote Issuance of digital currency can help reduce costs, curb crimes and money laundry, facilitate transactions and boost central bank’s control on money supply and circulation, PBOC says in statement on website after concluding a seminar today.

    PBOC has asked its research team, which was set up in 2014, to study application scenarios for digital currency and strive for an early rollout.
    PBOC Statement:
    Quote People's Bank of China digital currency seminar held in Beijing. From the People's Bank, Citibank and Deloitte digital currency expert, respectively, on the overall framework of digital currency currency evolving national digital currency, encryption currency issued by the State and other topics of discussion and exchange. People's Bank of China Governor Zhou Xiaochuan attended the meeting, the People's Bank of China Deputy Governor Chair Fan Yifei. Relevant research institutions, major financial institutions and advisory bodies of experts attended the meeting.

    The meeting pointed out that with the development of information technology and mobile Internet, cloud computing Trusted controlled, secure storage terminal evolution, block chain technology worldwide payment undergone tremendous changes, the development of digital currency is central Bank of currency and monetary policy has brought new opportunities and challenges. The People's Bank attaches great importance from 2014 to set up a special research team, and in early 2015 to further enrich the power of digital distribution and business operations monetary framework, the key technology of digital currency, digital currency issued and outstanding environment, digital currency legal issues facing the impact of digital currency on economic and financial system, the relationship between money and private legal digital distribution of digital currency, digital currency issuance of international experience conducted in-depth research, has achieved initial results.

    The meeting held that China's current economy under the new norm, explore the central bank issued digital currency has a positive practical significance and far-reaching historical significance. It can reduce the traditional distribution of digital currency note issue, the high cost of circulation, improve convenience and transparency of economic transactions and reduce money laundering, tax evasion and other criminal acts to enhance the central bank's money supply and currency in circulation control, better support economic and social development, the full realization of inclusive finance help. Future, digital currency issuance, circulation system also helps build our new financial infrastructure construction, further improve China's payment system, improve payment and settlement efficiency, promote economic quality and efficiency upgrades.

    The meeting urged the People's Bank of digital currency research team to actively absorb the important results and practical experience of digital currency research at home and abroad, continue to advance on the basis of preliminary work to establish a more effective organizational guarantee mechanism, to further clarify the strategic objectives of the central bank issued digital currency and do key technologies, multi-scene digital currency research applications for the early introduction of digital currency issued by the central bank. Design of digital currency should be based on economic, convenience and safety principles, and ensure the application of low-cost digital currency, wide coverage, digital currency payment instruments with other seamlessly, enhance the applicability and vitality of digital currency.

    The People's Bank in advancing digital currency research work with relevant international agencies, Internet companies to establish a communication link with the domestic and foreign financial institutions, traditional card-based payment institutions were widely discussed. At home and abroad to participate in discussions of attention to this work, and related research on expert theory, practice and exploration and development path with the people in the banking system conducted in-depth exchanges.
    Which was readily followed by yet another blessing from The IMF:
    • *IMF’S LAGARDE SAYS VIRTUAL CURRENCIES ARE EXTREMELY BENEFICIAL
    • *VIRTUAL CURRENCIES ALSO COULD BE DESTABILIZING: LAGARDE

    The International Monetary Fund extolled the potential benefits of virtual currencies
    and said they warrant a more nuanced regulatory approach, at a time when the future of bitcoin, the most well-known example, is in doubt.
    Quote “Virtual currencies and their underlying technologies can provide faster and cheaper financial services, and can become a powerful tool for deepening financial inclusion in the developing world,” IMF Managing Director Christine Lagarde said in a statement Wednesday to accompany the report.

    "The challenge will be how to reap all these benefits and at the same time prevent illegal uses, such as money laundering, terror financing, fraud and even circumvention of capital controls.”
    * * *

    However, as we detailed previously. there are three enormous flaws in this thinking.
    One is that households and businesses have cash to hoard. The reality is the bottom 90 percent of households have less income now than they did fifteen years ago, which means their spending has declined not from hoarding but from declining income.


    While corporate America has basked in the glory of sharply rising profits, small business has not prospered in the same fashion. Indeed, by some measures, small business has been in a six-year recession.



    The bottom 90 percent has less income and faces higher living expenses, so only the top slice of households has any substantial cash. This top slice may see few safe opportunities to invest their savings, so they choose to keep their savings in cash rather than gamble it in a rigged casino (i.e., the stock market).

    The second flaw is that hoarding cash is the only rational, prudent response in an era of financial repression and economic insecurity. What central banks are demanding — that we spend every penny of our earnings rather than save some for investments we control or emergencies — is counter to our best interests.

    This leads to the third flaw: capital — which begins its life as savings — is the foundation of capitalism. If you attack savings as a scourge, you are attacking capitalism and upward mobility, for only those who save capital can invest it to build wealth. By attacking cash, the central banks and governments are attacking capital and upward mobility.

    Those who already own the majority of productive assets are able to borrow essentially unlimited sums at near-zero interest rates, which they can use to buy more productive assets. Everyone else — the bottom 99.5 percent — is reduced to consumer-serfdom: you are not supposed to accumulate productive capital, you are supposed to spend every penny you earn on interest payments, goods, and services.
    This inversion of capitalism dooms an economy to all the ills we are experiencing in abundance: rising income inequality, reduced opportunities for entrepreneurship, rising debt burdens, and a short-term perspective that voids the longer-term planning required to build sustainable productivity and wealth.


    Benefits To Banks and the Government of Eliminating Physical Cash
    The benefits to banks and governments by eliminating cash are self-evident:
    1. Every financial transaction can be taxed.
    2. Every financial transaction can be charged a fee.
    3. Bank runs are eliminated.
    In fractional reserve systems such as ours, banks are only required to hold a fraction of their assets in cash. Thus a bank might only have 1 percent of its assets in cash. If customers fear the bank might be insolvent, they crowd the bank and demand their deposits in physical cash. The bank quickly runs out of physical cash and closes its doors, further fueling a panic.

    The federal government began insuring deposits after the Great Depression triggered the collapse of hundreds of banks, and that guarantee limited bank runs, as depositors no longer needed to fear a bank closing would mean their money on deposit was lost.

    But since people could conceivably sense a disturbance in the Financial Force and decide to turn digital cash into physical cash as a precaution, eliminating physical cash also eliminates the possibility of bank runs, as there will be no form of cash that isn’t controlled by banks.

    So, when the dust has settled who ultimately benefits by this war on cash - government and the central banks, pure and simple.
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    Default Re: War on cash

    Quote Posted by Hervé (here)
    So, when the dust has settled who ultimately benefits by this war on cash - government and the central banks, pure and simple.
    That will depend on whether the central authorities control digital currency.

    Unfortunately, the odds are heavily in favor of their getting that control.

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    Default Re: War on cash

    Quote Posted by Paul (here)
    Quote Posted by Hervé (here)
    So, when the dust has settled who ultimately benefits by this war on cash - government and the central banks, pure and simple.
    That will depend on whether the central authorities control digital currency.

    Unfortunately, the odds are heavily in favor of their getting that control.
    I can't seem to be able to start a new thread on Global 3.0 as Catherine Austin Fitts often states so I'll post here.
    https://youtu.be/4PQrz8F0dBI?list=PL4F1C94B5063C669E- 94' Charlie Rose with Sir James Goldsmith warning about globalization and GATT (General Agreements on Tariffs &Trade- which was the beginning of end.
    Last edited by Wide-Eyed; 22nd January 2016 at 08:21. Reason: typo

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    Default Re: War on cash

    Quote Posted by Wide-Eyed (here)
    I can't seem to be able to start a new thread on Global 3.0 as Catherine Austin Fitts often states so I'll post here.
    https://youtu.be/4PQrz8F0dBI?list=PL4F1C94B5063C669E- 94' Charlie Rose with Sir James Goldsmith warning about globalization and GATT (General Agreements on Tariffs &Trade- which was the beginning of end.
    Expanding and embedding, here is this 1994 Charlie Rose interview of Sir James Goldsmith warning about the GATT global trade treaty:

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    Default Re: War on cash

    Norway's Biggest Bank Demands Cash Ban

    Submitted by Tyler Durden on 01/23/2016 17:10 -0500


    The war on cash is escalating faster than many had imagined. Having documented the growing calls from the elites and propagandist explanations of the "benefits" to their serfs over the last few years, with China, and The IMF entering the "cashless society" call most recently, International Business Times reports that Norway - suffering from its own economic collapse as oil revenues crash - has joined its Scandi peers Denmark and Sweden in a call to "ban cash."

    By way of background, as we explained previously, What exactly does a “war on cash” mean?
    It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.
    These limits are broadly called “capital controls.”


    Why Now? Why are governments suddenly so keen to ban physical cash?
    The answer appears to be that the banks and government authorities are anticipating bail-ins, steeply negative interest rates and hefty fees on cash, and they want to close any opening regular depositors might have to escape these forms of officially sanctioned theft. The escape mechanism from bail-ins and fees on cash deposits is physical cash, and hence the sudden flurry of calls to eliminate cash as a relic of a bygone age — that is, an age when commoners had some way to safeguard their money from bail-ins and bankers’ control.
    Forcing Those With Cash To Spend or Gamble Their Cash
    The conventional answer voiced by Mr. Buiter is that recession and credit contraction result from households and enterprises hoarding cash instead of spending it. The solution to recession is thus to force all those stingy cash hoarders to spend their money.
    And the benefits of a cashless society to banks and governments are self-evident:
    1. Every financial transaction can be taxed.

    2. Every financial transaction can be charged a fee.

    3. Bank runs are eliminated.

    In fractional reserve systems such as ours, banks are only required to hold a fraction of their assets in cash. Thus a bank might only have 1 percent of its assets in cash. If customers fear the bank might be insolvent, they crowd the bank and demand their deposits in physical cash. The bank quickly runs out of physical cash and closes its doors, further fueling a panic.

    The federal government began insuring deposits after the Great Depression triggered the collapse of hundreds of banks, and that guarantee limited bank runs, as depositors no longer needed to fear a bank closing would mean their money on deposit was lost.

    But since people could conceivably sense a disturbance in the Financial Force and decide to turn digital cash into physical cash as a precaution, eliminating physical cash also eliminates the possibility of bank runs, as there will be no form of cash that isn’t controlled by banks.
    So, when the dust has settled who ultimately benefits by this war on cash - government and the central banks, pure and simple.

    Which explains why Norway's biggest bank, DNB, has called for the country to stop using cash which is just the latest move in a country that has been leading the global charge toward electronic money in recent years, with several banks already not offering cash in their branch offices and some industries seeking to cut back on paper currency.
    DNB's proposal suggests eliminating the use of cash would cut down on black market sales and crimes such as money laundering.

    Quote “Today, there is approximately 50 billion kroner in circulation and [the country’s central bank] Norges Bank can only account for 40 percent of its use. That means that 60 percent of money usage is outside of any control. We believe that is due to under-the-table money and laundering,” Trond Bentestuen, a DNB executive, told Norwegian website VG, the Local reported.

    “There are so many dangers and disadvantages associated with cash, we have concluded that it should be phased out,”
    he added.
    The country has already moved in this direction. Bentestuen estimated that only about 6 percent of Norwegians use cash on a daily basis, with the numbers higher among elderly people.
    Norway’s Ministry of Finance is opposed to the proposal, however, and other critics have raised concerns about privacy issues as well as how the change would affect tourists. Privacy advocates in Norway have expressed worries for years that, without cash, there would be no way for an individual to purchase something without being tracked.

    In 2014, Finans Norge, a financial industry organization in Norway, said the country was on pace to be a cashless society by 2020, Ice News reported. While DNB said its proposal will take time to complete, executives suggested the country start phasing out cash by discontinuing the 1,000 kroner note so it could focus on updating its banking system.
    Quote “Eighty-five percent of our customers say that they never or only very rarely go to the bank. Therefore we think it is a mistake to maintain a very old structure with local branch offices. It is better to follow the customers and improve the offers where the customers are: digital,”
    Bentestuen said.
    In the meantime, DNB and Norway’s second largest bank, Nordea, have already stopped using cash in their branch offices. And the movement toward a goal of no cash has been going on for a while. The Norwegian Hospitality Association pushed to eliminate consumers’ right to pay cash at all stores and restaurants in 2013, The Local reported.

    Other countries including Denmark and Sweden have made similar pushes as their populations also rely largely on electronic money.
    If allowed to continue, state wealth control will exist.

    And thus, as we concluded previously, if you can’t withdraw your money as cash, you have two choices: You can deal with negative interest rates...or you can spend your money. Ultimately, that’s what our Keynesian central planners want. They are using negative interest rates and the War on Cash to force you to spend and “stimulate” the economy.

    If you ask us, these radical and insane measures are a sign of desperation.

    The War on Cash and negative interest rates are huge threats to your financial security. Central planners are playing with fire and inviting a currency catastrophe.
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    Default Re: War on cash

    .
    The war on cash continues. This was just posted on Zerohedge: So It Begins: Bloomberg Op-Ed Calls For An End Of Cash:

    =========
    In a moment of curious serendipity, a little over 90 minutes after we showed what a dystopian, centrally-planned, cashless society unleashed in a negative interest rate world would look like ("by forcing people and companies to convert their paper money into bank deposits, the hope is that they can be persuaded (coerced?) to spend that money rather than save it because those deposits will carry considerable costs"), and briefly after we laid out the countless recent warnings from "very serious people" that cash is evil and should be banned:... while warning to await a full-on coopted media assault about the dangers of cash "which is an anacrhonysm from a bygone era, and that the world will be so much better if only everyone dutifully exchanges the physical currency in their pocket for digital, traceable, and deletable 1s and 0s", none other than Bloomberg issued an editorial Op-Ed in which it had one simple message: "Bring On the Cashless Future."

    For those who were amused by our warning that a cashless world may be coming, here is precisely why the warning was issued, in Bloomberg's digital ink:

    ===
    Bring On the Cashless Future

    Cash had a pretty good run for 4,000 years or so. These days, though, notes and coins increasingly seem declasse: They're dirty and dangerous, unwieldy and expensive, antiquated and so very analog.

    Sensing this dissatisfaction, entrepreneurs have introduced hundreds of digital currencies in the past few years, of which bitcoin is only the most famous. Now governments want in: The People's Bank of China says it intends to issue a digital currency of its own. Central banks in Ecuador, the Philippines, the U.K. and Canada are mulling similar ideas. At least one company has sprung up to help them along.

    Much depends on the details, of course. But this is a welcome trend. In theory, digital legal tender could combine the inventiveness of private virtual currencies with the stability of a government mint.

    Most obviously, such a system would make moving money easier. Properly designed, a digital fiat currency could move seamlessly across otherwise incompatible payment networks, making transactions faster and cheaper. It would be of particular use to the poor, who could pay bills or accept payments online without need of a bank account, or make remittances without getting gouged.

    For governments and their taxpayers, potential advantages abound. Issuing digital currency would be cheaper than printing bills and minting coins. It could improve statistical indicators, such as inflation and gross domestic product. Traceable transactions could help inhibit terrorist financing, money laundering, fraud, tax evasion and corruption.

    The most far-reaching effect might be on monetary policy. For much of the past decade, central banks in the rich world have been hampered by what economists call the zero lower bound, or the inability to impose significantly negative interest rates. Persistent low demand and high unemployment may sometimes require interest rates to be pushed below zero -- but why keep money in a deposit whose value keeps shrinking when you can hold cash instead? With rates near zero, that conundrum has led policy makers to novel and unpredictable methods of stimulating the economy, such as large-scale bond-buying.

    A digital legal tender could resolve this problem. Suppose the central bank charged the banks that deal with it a fee for accepting paper currency. In that way, it could set an exchange rate between electronic and paper money -- and by raising the fee, it would cause paper money to depreciate against the electronic standard. This would eliminate the incentive to hold cash rather than digital money, allowing the central bank to push the interest rate below zero and thereby boost consumption and investment. It would be a big step toward doing without cash altogether.

    Digital legal tender isn't without risk. A policy that drives down the value of paper money would meet political resistance and -- to put it mildly -- would require some explaining. It could hold back private innovation in digital currencies. Security will be an abiding concern. Non-cash payments also tend to exacerbate the human propensity to overspend. And you don't have to be paranoid to worry about Big Brother tracking your financial life.

    Governments must be alert to these problems -- because the key to getting people to adopt such a system is trust. A rule that a person's transaction history could be accessed only with a court order, for instance, might alleviate privacy concerns.

    Harmonizing international regulations could encourage companies to keep experimenting. And an effective campaign to explain the new tender would be indispensable.

    If policy makers are wise and attend to all that, they just might convince the public of a surprising truth about cash: They're better off without it.

    To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.
    ===

    And so it begins. It will most certainly not end there.

    =========

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    Default Re: War on cash

    Germany Unveils "Cash Controls" Push: Ban Transactions Over €5,000, €500 Euro Note

    Submitted by Tyler Durden on 02/03/2016 09:43 -0500


    It was just two days ago that Bloomberg implored officials to “bring on a cashless future” in an Op-Ed that calls notes and coins “dirty, dangerous, unwieldy, and expensive.”

    You probably never thought of your cash that way, but increasingly, authorities and the powers that be seem determined to lay the groundwork for the abolition of what Bloomberg calls “antiquated” physical money.

    We’ve documented the cash ban calls on a number of occasions including, most recently, those that emanated from DNB, Norway’s largest bank where executive Trond Bentestuen said that although “there is approximately 50 billion kroner in circulation, the Norges Bank can only account for 40 percent of its use.”

    That, Bentestuen figures, “means that 60 percent of money usage is outside of any control." "We believe," he continues, "that is due to under-the-table money and laundering.”

    DNB goes on to say that after identifying “many dangers and disadvantages” associated with cash, the bank has “concluded that it should be phased out.”

    On Tuesday we got the latest evidence that officials across the globe are preparing to institute a cashless “utopia” when Handelsblatt reported (in a piece called "The Death of Cash) that the Social Democrats - the junior partner in Angela Merkel’s coalition government - have proposed a €5,000 limit on cash transactions and the elimination of the €500 note.

    Berlin is using a familiar scapegoat to justify the plan: the need to fight "terrorists" and “foreign criminals."

    “Limits on cash transactions would discourage foreign criminals from coming here to launder money,” says a paper penned by the Social Democrats. “If sums over €5,000 have to pass through traceable bank transactions, laundering would be severely hampered, it adds.”

    On Wednesday, we got confirmation of the plan from Deputy Finance Minister Michael Meister who told reporters that Germany is proposing a euroarea ban on cash transactions over €5,000 to combat terrorism financing and money laundering.

    “Since money laundering and terrorism financing are cross-border threats,” it makes sense to adopt a bloc-wide “solution”, but “if a European solution isn’t possible, Germany will move ahead on its own,” he added.

    This comes at a rather convenient time for policy makers in Europe. Rates are already sitting at -0.30% and are likely to be cut by an additional 10bps in March. But that’s not likely to do anything to curb the disinflationary impulse. Mario Draghi isn’t anywhere close to his inflation target and it says a lot about how ineffective the ECB has been when everyone is relieved to see annual inflation running at the “brisk” pace of 0.4%.

    As a reminder, the gradual phasing out of cash strips the public of its economic autonomy. Central bankers can only control interest rates down to a certain “lower bound.” Once negative rates are passed on to depositors - and trust us, that’s coming - people will simply start pulling their money out of the bank. The more negative rates go, the faster those withdrawals will be.

    When you ban cash you eliminate this problem. In a cashless society with a government-managed digital currency there is no effective lower bound. If the economy isn’t doing what a bunch of bureaucrats want it to do, they can simply make interest rates deeply negative, forcing would-be savers to become consumers by making them choose between spending or watching as the bank simply confiscates their money in the name of NIRP.

    Obviously, banning transactions above €5,000 is a long way from a wholesale ban on cash and several other countries have similar limits on cash transactions. Still, there’s no reason why the same rationale (i.e. fighting terror financing) can’t be applied to smaller sums - or all cash transactions. After all, it’s not as though “foreign criminals” only transact in amounts over €5,000 and since “follow the money” is usually the best way to get to the bottom of a perceived “problem,” having a ledger of everything someone or some group does financially would likely be an effective way to crack down on illicit activity.

    We would argue that the cost to society of creating an economy wherein people’s economic decisions are completely dictated by small groups of economists far outweighs any benefits that would accrue from using a centrally planned digital currency to deter crime.

    As for how a cash ban would go over in Germany, we seriously doubt the public would take it laying down given that only 18.7% of transactions in the country involve plastic cards.
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    Default Re: War on cash

    Article by Nick Giambruno, editor of the Crisis Speculator and Dr. Joe Salerno interview:

    The War on Cash: Transparently Totalitarian

    by Nick Giambruno, Senior Editor
    The War on Cash: Transparently Totalitarian


    George Orwell once wrote “If you want a picture of the future, imagine a boot stamping on a human face—forever.”

    Not exactly a cheery thought, and one I don’t agree with.

    While the forces pushing for centralization of power have been prevailing for decades, they haven’t won a total victory yet. Technologies that empower the individual and that tend toward decentralization—including the Internet, encryption, 3D printing, and cryptocurrencies—offer a powerful ray of hope, reasons to be optimistic about the future.

    So the tug of war between the collectivists and the rest of us continues.

    One thing that would tip the scales heavily in favor of the collectivists would be victory in the War on Cash. Their goal is to eliminate the use of hand-to-hand currency, so that governments can document, control, and tax everything.

    It’s exactly like what Ron Paul said: “The cashless society is the IRS’s dream: total knowledge of, and control over, the finances of every single American.”

    One way they are waging the War on Cash is to lower the threshold at which reporting a cash transaction is mandatory or at which paying in cash is simply illegal. In just the last few years…

    Italy made cash transactions over €1,000 illegal;

    Switzerland has proposed banning cash payments in excess of 100,000 francs;

    Russia banned cash transactions over $10,000;

    Spain banned cash transactions over €2,500;

    Mexico made cash payments of more than 200,000 pesos illegal;

    Uruguay banned cash transactions over $5,000; and

    France made cash transactions over €1,000 illegal, down from the previous limit of €3,000.

    I recently spoke about this with Dr. Joe Salerno, an Austrian economist with the Mises Institute. Joe is the best chronicler of the global War on Cash and is here to offer an Austrian rebuttal to the economic nonsense peddled by advocates of this war.

    I am happy to bring you his informed insight.

    Until next time,


    Nick Giambruno
    Senior Editor
    INTERNATIONALMAN.com

    Nick Giambruno: What is the War on Cash?

    Joe Salerno: The War on Cash is the attempt by governments to phase cash out of their economies. Governments hate cash because they hate the financial privacy cash makes possible. And they prefer that you keep your money in a bank to help prop up an unsound fractional reserve banking system.

    Nick: How did you get interested in this topic?

    Joe: I noticed that every time there was a war on something—a war on crime, a war on drugs, a war on terror and so forth—the more the government encroached on financial privacy. The US government has long been waging a hidden war on cash.

    One symptom of the war is that the largest denomination of US currency is the $100 note. US currency used to be issued in denominations running up to $10,000 (including also $500; $1,000; $5,000 notes). The US government stopped printing large denomination notes in 1945 and officially discontinued their issuance in 1969, when the Fed began removing them from circulation.

    Since then, the largest currency note available has a face value of $100. But since 1969, the inflationary monetary policy of the Fed has caused the US dollar to depreciate by over 80%, so that a $100 note today has less purchasing power than a $20 bill in 1969.

    So in addition to lowering the nominal size of the largest bill, they also reduced the bill’s purchasing power through inflation.

    Despite this enormous depreciation, the Federal Reserve has steadfastly refused to issue notes of larger denomination. This has made large cash transactions extremely inconvenient and has forced the American public to make much greater use than is optimal of electronic-payment methods. Of course, this is precisely the intent of the US government.

    Nick: Looking around, what are the latest examples of the War on Cash?

    Joe: One right here in the United States occurred in 2011. It flew under the radar for a while. The State of Louisiana banned “secondhand dealers” from making more than one cash transaction per week. The term has a broad definition and includes Goodwill stores, specialty stores that sell collectibles like baseball cards, flea markets, garage sales and so on. Anyone deemed a “secondhand dealer” is forbidden to accept cash as payment. They are allowed to take only electronic means of payment or a check, and they must collect the name and other information about each customer and send it to the local police department electronically every day.

    Continued here....
    Last edited by TrumanCash; 5th February 2016 at 17:36.

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    Default Re: War on cash

    Banning Cash: Serfdom in Our Time

    "Negative interest rates mean that your bank account shrinks day by day, automatically."

    Over the last few months a stream of articles have crossed my screen, all proclaiming the need of governments and banks to eliminate cash. I’m sure you’ve noticed them too.

    It is terrorists and other assorted madmen, we are told, who use cash. And so, to protect us from being blown up and dismembered on our very own street corners, governments will have to ban it.

    It would actually take some effort to imagine a more obvious, naked attempt at fearmongering. Cash – in daily use for centuries if not millennia – is now, suddenly, the agent of spring-loaded, instant death? And we’re supposed to just accept that line?

    But there are good reasons why the insiders are promoting these stories now. The first of them, perhaps, is simply that they can: After 9/11, a massive wave of compliance surged through the West. It may not last forever, but it’s still rolling, and if the entertainment corporations can pump enough fear into minds that want to believe, they may just get them to buy it.

    The second reason, however, is the real driver:

    Negative Interest Rates

    The urgency of their move to ban one of the longest-lasting pillars of daily life means that the backroom elites think it will be necessary soon. It would appear that the central banks, the IMF, the World Bank, the BIS, and all their backers, see the elimination of cash as a central survival strategy.

    The reason is simple: cash would allow people to escape from the one thing that could save their larcenous currency system: negative interest rates.

    To make this clear, I like to paraphrase a famous (and good) quote from Alan Greenspan, back from 1966, during his Ayn Randian days: The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

    That was a true statement, and with a slight modification, it succinctly explains the new war on cash:

    The preservation of an insolvent currency system requires that the owners of currency have no way to protect it.

    Cash is currency that you hold in your own hands, that stands more or less alone. It is primarily external to bank control. Electronic money – bank balances, credit, etc. – remains inside the banking system and fully subject to bank control.

    A combination of no cash and negative interest rates would be a quiet, permanent version of what was done in Cyprus, where the government simply shut down everything, allowed only the smallest deductions via ATMs, and then stole money from thousands of bank accounts at once.

    The Cypriot spectacle was fairly large, however, and that tends to undermine the legitimacy of rulership. So, it is much better to have no ATMs and no cash at all. There would be no lines of angry people talking to each other, only isolated losers with no recourse, licking their wounds while the talking heads on television tell them to stay calm and watch the flashing images.

    Negative interest rates would give the banks 100% control over your purchases. They could, even in the worst pinch, allow you to purchase food while freezing the rest of your money. The average person would have no recourse and would simply be robbed… but very smoothly and with no human face to blame on.

    Negative interest rates mean that your bank account shrinks day by day, automatically. Your $1000 in January becomes $950 by December. And where does that money go? To the banks, of course, and to the government. They syphon your money away, drip by drip, and there’s nothing you can do about it. This accomplishes several things for them at once:

    It finances government, limitlessly and automatically. Forget tax filings; they can just take as they please.

    It pays off the bad debt of the big banks. (And there are oceans of debt.)

    It forces you to spend everything you’ve got, as soon as you get it. (Otherwise it will shrink.)

    It gives the system full control over your financial life. Everything is monitored, everything is tracked, and every single transaction must be approved by them (or not). If they decide they don’t like you, you’re instantly reduced to begging.

    In short, this is a direct return to serfdom.

    I suggest that you start talking to your friends and neighbors about this now, before it’s too late. Don’t let them comply without a fight.

    Paul Rosenberg
    www.freemansperspective.com

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    Default Re: War on cash

    I had companies that worked with barter exchanges in SF ,Ca. in the 90's. It is a fair and reasonably powerful means of exchange. It did go full circle across the goods and services sectors in the city and was viewed by most or both sides of the exchange as efficient, and fair. Perhaps this digital currency growth will serve as wake up call to develop barter exchanges further rather than capitulate to war on cash.

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    Default Re: War on cash

    Quote Posted by Wide-Eyed (here)
    I had companies that worked with barter exchanges in SF ,Ca. in the 90's. It is a fair and reasonably powerful means of exchange. It did go full circle across the goods and services sectors in the city and was viewed by most or both sides of the exchange as efficient, and fair. Perhaps this digital currency growth will serve as wake up call to develop barter exchanges further rather than capitulate to war on cash.
    What exactly is a "barter exchange" and how does it work?

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    Default Re: War on cash

    The War On Paper Currency Begins: ECB Votes To "Scrap" 500 Euro Bill

    "In other words, if overnight the €307 billion worth of €500 bills were eliminated, the notional value of the entire amount of European physical currency in circulation would decline by 30% to €700 billion!"

    Draghi Denies ECB Waging War on Cash With Big Banknote Review (Yeah, right, even though it would eliminate 30% of all cash)

    I am wondering if they are just going to just stop printing them or if they are going to make people turn them in.


    Harvard "scholar" and former Standard Chartered CEO Peter Sands who just last week said the US should ban the $100 note as it would "deter tax evasion, financial crime, terrorism and corruption."

    What if the US actually followed Peter Sands' advice? --

    "...$100 bills account for for $1.08 trillion of the $1.38 trillion total in circulation. So should the Fed react to the ECB's "scrapping" of the €500 bill, which accounts for 30% of the value of currency in circulation, then the Fed would respond in kind, by eliminating 78% of all paper currency in circulation by value.

    "Not a bad way to launch a global ban on paper currency ahead of a global NIRP regime, and all, of course, in the name of fighting "tax evasion, financial crime, terrorism and corruption."
    Last edited by TrumanCash; 15th February 2016 at 17:29.

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    Default Re: War on cash

    Quote Posted by TrumanCash (here)
    I am wondering if they are just going to just stop printing them or if they are going to make people turn them in.
    Perhaps, just guessing here, they will:
    1. Stop issuing them (banks would accept them for deposit or exchange for smaller bills, but no longer hand them out).
    2. Start charging "Negative Interest" on them ... their value if submitted to a bank teller window would start declining.

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    Default Re: War on cash

    Larry Summers Launches The War On Paper Money: "It's Time To Kill The $100 Bill"

    This is a Washington Post oped (today) written by Larry Summers, former US Secretary of the Treasury.

    "What should happen next? I’d guess the idea of removing existing notes is a step too far. But a moratorium on printing new high denomination notes would make the world a better place."

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    Default Re: War on cash

    In related news, from Zerohedge, Larry Summers Launches The War On Paper Money: "It's Time To Kill The $100 Bill":

    ========
    Yesterday we reported that the ECB has begun contemplating the death of the €500 EURO note, a fate which is now virtually assured for the one banknote which not only makes up 30% of the total European paper currency in circulation by value, but provides the best, most cost-efficient alternative (in terms of sheer bulk and storage costs) to Europe's tax on money known as NIRP.

    That also explains why Mario Draghi is so intent on eradicating it first, then the €200 bill, then the €100 bill, and so on.

    We also noted that according to a Bank of America analysis, the scrapping of the largest denominated European note "would be negative for the currency", to which we said that BofA is right, unless of course, in this global race to the bottom, first the SNB "scraps" the CHF1000 bill, and then the Federal Reserve follows suit and listens to Harvard "scholar" and former Standard Chartered CEO Peter Sands who just last week said the US should ban the $100 note as it would "deter tax evasion, financial crime, terrorism and corruption."

    Well, not even 24 hours later, and another Harvard "scholar" and Fed chairman wannabe, Larry Summers, has just released an oped in the left-leaning Amazon Washington Post, titled "It’s time to kill the $100 bill" in which he makes it clear that the pursuit of paper money is only just starting. Not surprisingly, just like in Europe, the argument is that killing the Benjamins would somehow eradicate crime, saying that "a moratorium on printing new high denomination notes would make the world a better place."

    Yes, for central bankers, as all this modest proposal will do is make it that much easier to unleash NIRP, because recall that of the $1.4 trillion in total U.S. currency in circulation, $1.1 trillion is in the form of $100 bills. Eliminate those, and suddenly there is nowhere to hide from those trillions in negative interest rate "yielding" bank deposits.
    ========

    Hmmm ... ceasing the printing of new notes ... sounds to me like a sensible step to take, a few months before a monetary reset that exchanges our (US) Federal Reserve Notes for some Treasury Notes, as part of a world-wide monetary reset that removes the US Dollar from its Reserve status.

    ... start collecting the old paper now, especially the high denomination notes, so that a re-issuance, only in smaller denominations, later on, would be less disruptive.

    Perhaps one would then also want to start removing the $500 Euro, if for no reason other than to ensure that it didn't start replacing the disappearing $100 US Fed note, in common usage.

    (P.S. -- Looks like TrumanCash beat me to this one by ten minutes, in his post just above.)

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    Thumbs up Re: War on cash

    Quote Posted by TrumanCash (here)
    Quote Posted by Wide-Eyed (here)
    I had companies that worked with barter exchanges in SF ,Ca. in the 90's. It is a fair and reasonably powerful means of exchange. It did go full circle across the goods and services sectors in the city and was viewed by most or both sides of the exchange as efficient, and fair. Perhaps this digital currency growth will serve as wake up call to develop barter exchanges further rather than capitulate to war on cash.
    What exactly is a "barter exchange" and how does it work?
    BayAreaBarterExchange- http://california.14thstory.com/bay-...ange-inc.html- closed due to the California Franchise Tax Board failing to recognize their system of bartering businesses excess goods and services amoungst themselves as tax free events.

    An example of another company currently performing well as bartering exchange is BAY BUCKS. http://www.shareable.net/blog/bay-ar...rrency-network

    Here is another Barter Co.- https://www.imsbarter.com/san-francisco-barter
    Last edited by Wide-Eyed; 17th February 2016 at 02:04. Reason: more examples cited

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    Default Re: War on cash

    Quote Posted by Paul (here)
    In related news, from Zerohedge, Larry Summers Launches The War On Paper Money: "It's Time To Kill The $100 Bill":

    ========
    Yesterday we reported that the ECB has begun contemplating the death of the €500 EURO note, a fate which is now virtually assured for the one banknote which not only makes up 30% of the total European paper currency in circulation by value, but provides the best, most cost-efficient alternative (in terms of sheer bulk and storage costs) to Europe's tax on money known as NIRP.

    That also explains why Mario Draghi is so intent on eradicating it first, then the €200 bill, then the €100 bill, and so on.

    We also noted that according to a Bank of America analysis, the scrapping of the largest denominated European note "would be negative for the currency", to which we said that BofA is right, unless of course, in this global race to the bottom, first the SNB "scraps" the CHF1000 bill, and then the Federal Reserve follows suit and listens to Harvard "scholar" and former Standard Chartered CEO Peter Sands who just last week said the US should ban the $100 note as it would "deter tax evasion, financial crime, terrorism and corruption."

    Well, not even 24 hours later, and another Harvard "scholar" and Fed chairman wannabe, Larry Summers, has just released an oped in the left-leaning Amazon Washington Post, titled "It’s time to kill the $100 bill" in which he makes it clear that the pursuit of paper money is only just starting. Not surprisingly, just like in Europe, the argument is that killing the Benjamins would somehow eradicate crime, saying that "a moratorium on printing new high denomination notes would make the world a better place."

    Yes, for central bankers, as all this modest proposal will do is make it that much easier to unleash NIRP, because recall that of the $1.4 trillion in total U.S. currency in circulation, $1.1 trillion is in the form of $100 bills. Eliminate those, and suddenly there is nowhere to hide from those trillions in negative interest rate "yielding" bank deposits.
    ========

    Hmmm ... ceasing the printing of new notes ... sounds to me like a sensible step to take, a few months before a monetary reset that exchanges our (US) Federal Reserve Notes for some Treasury Notes, as part of a world-wide monetary reset that removes the US Dollar from its Reserve status.

    ... start collecting the old paper now, especially the high denomination notes, so that a re-issuance, only in smaller denominations, later on, would be less disruptive.

    Perhaps one would then also want to start removing the $500 Euro, if for no reason other than to ensure that it didn't start replacing the disappearing $100 US Fed note, in common usage.

    (P.S. -- Looks like TrumanCash beat me to this one by ten minutes, in his post just above.)
    Spot on Paul; scary developments http://www.zerohedge.com/news/2016-0...sh-coming-soon

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    Default Re: War on cash

    So ... why are they going after cash, especially larger denominations?
    1. War on terrorists
    2. War on crime (drugs and prostitution)
    3. War on positive interest rates (allow NIRP)
    4. Setup for a global monetary reset, including replacing US Federal Reserve Notes
    We're hearing variations of 1 through 3.

    I suspect the critical motivator is 4.

    But it's going to take a few months, at least, of major stress on Europe and the US to "sell" such a monetary reset. So far, the stress is not at that level, at least not in most of the US.

    May we live in interesting times.

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    Default Re: War on cash

    The Political War on Cash
    So long, Ben Franklin. Politicians want to coerce you to spend.


    Originally posted Op-Ed via The Wall Street Journal:

    These are strange monetary times, with negative interest rates and central bankers deemed to be masters of the universe. So maybe we shouldn’t be surprised that politicians and central bankers are now waging a war on cash. That’s right, policy makers in Europe and the U.S. want to make it harder for the hoi polloi to hold actual currency.

    Mario Draghi fired the latest salvo on Monday when he said the European Central Bank would like to ban €500 notes. A day later Harvard economist and Democratic Party favorite Larry Summers declared that it’s time to kill the $100 bill, which would mean goodbye to Ben Franklin. Alexander Hamilton may soon—and shamefully—be replaced on the $10 bill, but at least the 10-spots would exist for a while longer. Ol’ Ben would be banished from the currency the way dead white males like him are banned from the history books.

    Limits on cash transactions have been spreading in Europe since the 2008 financial panic, ostensibly to crack down on crime and tax avoidance. Italy has made it illegal to pay cash for anything worth more than €1,000 ($1,116), while France cut its limit to €1,000 from €3,000 last year. British merchants accepting more than €15,000 in cash per transaction must first register with the tax authorities. Fines for violators can run into the thousands of euros. Germany’s Deputy Finance Minister Michael Meister recently proposed a €5,000 cap on cash transactions. Deutsche Bank CEO John Cryan predicted last month that cash won’t survive another decade.

    The enemies of cash claim that only crooks and cranks need large-denomination bills. They want large transactions to be made electronically so government can follow them. Yet these are some of the same European politicians who blew a gasket when they learned that U.S. counterterrorist officials were monitoring money through the Swift global system. Criminals will find a way, large bills or not.

    The real reason the war on cash is gearing up now is political: Politicians and central bankers fear that holders of currency could undermine their brave new monetary world of negative interest rates. Japan and Europe are already deep into negative territory, and U.S. Federal Reserve Chair Janet Yellen said last week the U.S. should be prepared for the possibility. Translation: That’s where the Fed is going in the next recession.

    Negative rates are a tax on deposits with banks, with the goal of prodding depositors to remove their cash and spend it to increase economic demand. But that goal will be undermined if citizens hoard cash. And hoarding cash is easier if you can take your deposits out in large-denomination bills you can stick in a safe. It’s harder to keep cash if you can only hold small bills.

    So, presto, ban cash. This theme has been pushed by the likes of Bank of England chief economist Andrew Haldane and Harvard’s Kenneth Rogoff, who wrote in the Financial Times that eliminating paper currency would be “by far the simplest” way to “get around” the zero interest-rate bound “that has handcuffed central banks since the financial crisis.” If the benighted peasants won’t spend on their own, well, make it that much harder for them to save money even in their own mattresses.

    All of which ignores the virtues of cash for law-abiding citizens. Cash allows legitimate transactions to be executed quickly, without either party paying fees to a bank or credit-card processor. Cash also lets millions of low-income people participate in the economy without maintaining a bank account, the costs of which are mounting as post-2008 regulations drop the ax on fee-free retail banking. While there’s always a risk of being mugged on the way to the store, digital transactions are subject to hacking and computer theft.

    Cash is also the currency of gray markets—amounting to 20% or more of gross domestic product in some European countries—that governments would love to tax. But the reason gray markets exist is because high taxes and regulatory costs drive otherwise honest businesses off the books. Politicians may want to think twice about cracking down on the cash economy in a way that might destroy businesses and add millions to the jobless rolls. The Italian economy might shut down without cash.

    By all means people should be able to go cashless if they like. But it’s hard to avoid the conclusion that the politicians want to bar cash as one more infringement on economic liberty. They may go after the big bills now, but does anyone think they’d stop there? Why wouldn’t they eventually ban all cash transactions much as they banned gold and silver as mediums of exchange?

    Beware politicians trying to limit the ways you can conduct private economic business. It never turns out well.

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    Default Re: War on cash

    Don't you just love the commercials for bank cards? Everyone is dancing around, partying at Starbucks or where ever, sliding their draft cards through the machine. Everyone is smiling and happy ...... until some hillbilly tries to pay in cash. Screeech, the party stops and everyone stares at the fiend holding cash.

    Subtle if you are ignorant. Like a rock in your face if you are wise to the agenda.
    The quantum field responds not to what we want; but to who we are being. Dr. Joe Dispenza

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