Saturday, May 20, 2017
Waging a War on Cash, Governments and Central Banks Seek Cashless Societies
Does the notion of a cashless society seem preposterous to you? Well, such plans are being discussed in central banks and other corridors of power around the world.
While you may not have realized it, the war on cash is underway.
No one imagined negative interest rates 10 years ago. Such a notion seemed like fantasy. Now it’s reality. Negative interest rates disincentivize saving and encourage spending. It’s a policy intended to keep cash circulating throughout the economy by keeping it out of banks.
But what if people take their money out of banks and, instead of spending it, keep it hidden at home to avoid negative rates? A cashless society prevents that. It gives governments and central bankers complete authority. There is nowhere to hide money or keep the government from confiscating it, which is what negative rates are -- pure, unmasked confiscation.
A cashless society gives bankers and government total control. Stealing your savings via negative interest rates or other means (see the Cypress “bail in”) is effortless and guaranteed. Additionally, in a cashless society, all purchases are tracked. There is a record of all of every purchase you make: what you bought, where you bought it, and the time and day of your purchase. It’s a privacy nightmare.
In such a scenario, all of your money is forced into the banking system, like it or not.
There is no way to protect your savings or yourself in a cashless society. Digital money takes no effort to create. It is fiat currency on steroids. All money is instantly created via digital key strokes. This inflation of the money supply is the essence of price inflation — devaluing money and causing the cost of goods and services to rise in response.
A move away from cash allows governments to confiscate their citizen’s money via negative interest rates. There is nowhere to run, nowhere to hide. It’s the same reason that governments and banks hate gold: it exists outside the banking system and they can’t charge interest on it. It competes with official currency.
Since negative interest rates compel depositors to withdraw their money from the bank, bankers and governments have devised a method to prevent this drain of money. By eliminating physical money in favor of digital currency, the central bank/government can confiscate your money at will.
Eliminating high-denomination currency is the first step to eliminating all physical currency and it a devious, insidious plan. These “Masters of the Universe” think they can do anything they want.
Former Treasury Secretary Larry Sanders is the latest to publicly call for the elimination of the $100 bill. As ZeroHedge noted, of the $1.4 trillion in total U.S. currency in circulation, $1.1 trillion is in the form of $100 bills. By eliminating the $100 bill the value of 78% of all currency in circulation would be instantly wiped out.
Suddenly, there would be very little paper money to keep outside the banking system to avoid negative interest rates, aka, confiscation.
There is, however, a bit of good news in this otherwise dystopian story.
Americans still love cash. Despite the broad usage of credit cards, debit cards and mobile payments, cash still dominates many forms of payments. A 2014 Federal Reserve report found that consumers use cash more frequently than any other payment instrument, including debit or credit cards.
Forty percent of consumer transactions were made with cash, making up the single largest share, followed by debit cards at 25 percent and credit cards at 17 percent.
Getting rid of $100 bill would be no easy task. A Federal Reserve study a few years ago estimated that two-thirds of all $100 bills are held by foreigners. The dollar is the global reserve currency, used to settle almost all trade debts. Many foreign governments and their citizens hold dollars, much of which is in the form of $100 bills since they make storing and transporting large amounts of money easier. Many foreigners horde dollars during (or in case of) an economic crisis, when their own currencies are plunging in value.
The $100 bill is extremely popular. The only note that has wider circulation is the $1 bill — and just barely.
The financial authorities argue that eliminating cash would deter tax evasion, financial crime, terrorism, corruption and drug dealing.
Don’t fall for that hyperbole. The real reason is to control you and your money, while oppressing your freedom via financial repression.