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Cashless Society War Intensifies During Global Epocalypse
Cashless Society War Intensifies During Global Epocalypse
In the fall of 2015, the world descended into an economic apocalypse that will transform the globe into a single cashless society. This bold prediction is based on trends in nations all over the earth as shown in the article below.
As we enter 2016, we are only beginning to see this Epocalypse form through the fog of war. The war I’m talking about is the world war waged furiously by central banks against the Great Recession as the governments they supposedly serve fiddled while their capital burned.
The governments and banks of this world advanced rapidly toward forming cashless societies throughout 2015. The citizens of some countries are already embracing the move. In other countries, like the US, citizens fear the loss of autonomy that would come from giving governments and their designated central banks absolute monetary control.
The Epocalypse that I’ve been describing in this series will overcome that resistance during 2016 and 2017 as it wrecks economic havoc to such a degree that cash hold-outs will be ready for whatever holds the greatest promise of saving them from their collapsed monetary systems, fallen banks, deflated stocks and suffocating debt. One has only to think about how quickly and readily American citizens forfeited their constitutional civil liberties after 9/11 when George Bush and congress decreed that search warrants were not necessary if the government branded you a “terrorist.”
If this sounds like some wild conspiracy theory, consider the following: no less Sterling standard of global economics than The Economist predicted thirty years ago that by 2018 a global currency would rise like the phoenix out of the ashes of the world’s fiat currencies:
THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency.
…click on the above link to read the rest of the article…
Bank Of Russia Calls “Emergency” Meeting To Address Ruble Rout
Bank Of Russia Calls “Emergency” Meeting To Address Ruble Rout
Earlier today, we highlighted a dramatic plunge in the Russian ruble which has crashed to record lows against the dollar after staging its steepest two-day decline in nine months.
The sharp (and seemingly inexorable) decline in crude prices combined with Western economic sanctions and geopolitical turmoil have weighed on the currency of late and in the midst of a new leg down in oil, investors appear to be panic selling.
“Some investors are selling at any price,” Bernd Berg, an emerging-markets strategist in London at Societe Generale told Bloomberg by e-mail.
And even as Russian central bank Deputy Chairman Vasily Pozdyshev swears “there’s no systemic risk,” the Bank of Russia has now called an emergency meeting with state-run and private lenders to discuss the FX bloodbath.
- BANK OF RUSSIA TO MEET STATE-RUN, PRIVATE LENDERS: IZVESTIA
We Know How This Ends, Part 2
We Know How This Ends, Part 2
In March 1969, while Buba was busy in the quicksand of its swaps and forward dollar interventions, Netherlands Bank (the Dutch central bank) had instructed commercial banks in Holland to pull back funds from the eurodollar market in order to bring up their liquidity positions which had dwindled dangerously during this increasing currency chaos. At the start of April that year, the Swiss National Bank (Swiss central bank) was suddenly refusing its own banks dollar swaps in order that they would have to unwind foreign funds positions in the eurodollar market. The Bank of Italy (the Italian central bank) had ordered some Italian banks to repatriate $800 million by the end of the second quarter of 1969. It also raised the premium on forward lire at which it offered dollar swaps to 4% from 2%, discouraging Italian banks from engaging in covered eurodollar placements.
The “rising dollar” of 1969 had somehow become anathema to global banking liquidity even in local terms.
The FOMC, which had perhaps the best vantage point with which to view the unfolding events, documented the whole affair though stubbornly and maddeningly refusing to understand it all in greater context of radical paradigm banking and money alterations. In other words, the FOMC meeting MOD’s for 1968 and 1969 give you an almost exact window into what was occurring as it occurred, but then, during the discussions that followed, degenerating into confusion and mystification as these economists struggled to only frame everything in their own traditional monetary understanding – a religious-like tendency that we can also appreciate very well at this moment.
At the April 1969 FOMC meeting, Charles A. Coombs, Special Manager of the System Open Market Account, reported that the bank liquidity issue then seemingly focused on Germany was indeed replicated in far more countries.
…click on the above link to read the rest of the article…
We Know How This Ends, Part 1
We Know How This Ends, Part 1
The finance ministers and representatives of central banks from the world’s ten largest “capitalist” economies gathered in Bonn, West Germany on November 20, 1968. The global financial system was then enthralled by a third major currency crisis of the past year or so and there was great angst and disagreement as to what to do about it. While sterling had become something of a recurring devaluation tendency and francs perpetually, it seemed, in disarray, this time it was the Deutsche mark that was the great object of conjecture and anger. What happened at that meeting, a discussion that lasted thirty-two hours, depends upon which source material you choose to dissect it. From the point of view of the Germans, it was a convivial exchange of ideas from among partners; the Americans and British, a sometimes testy and perhaps heated debate about clearly divergent merits; the French were just outraged.
The communique issued at the end of the “conference” only said, “The ministers and governors had a comprehensive and thorough exchange of views on the basic problems of balance-of-payments disequilibria and on the recent speculative capital movements.” In reality, none of them truly cared about the former except as may be controlled by the latter. These “speculative capital movements” became the target of focused energy which would not restore balance and stability but ultimately see the end of the global monetary system.
Some background is needed before jumping into West Germany’s financial energy. The gold exchange standard under the Bretton Woods framework had appeared to have lasted as far as this monetary conference, but it had ended in practicality long before. In the late 1950’s, central banks, the Federal Reserve primary among them, had rendered gold especially and increasingly irrelevant in settling the world’s trade finance.
…click on the above link to read the rest of the article…
War On Cash Escalates: China Readies Digital Currency, IMF Says “Extremely Beneficial”
War On Cash Escalates: China Readies Digital Currency, IMF Says “Extremely Beneficial”
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
…click on the above link to read the rest of the article…
Greece’s Two Currencies
Greece’s Two Currencies
ATHENS – Imagine a depositor in the US state of Arizona being permitted to withdraw only small amounts of cash weekly and facing restrictions on how much money he or she could wire to a bank account in California. Such capital controls, if they ever came about, would spell the end of the dollar as a single currency, because such constraints are utterly incompatible with a monetary union.
Greece today (and Cyprus before it) offers a case study of how capital controls bifurcate a currency and distort business incentives. The process is straightforward. Once euro deposits are imprisoned within a national banking system, the currency essentially splits in two: bank euros (BE) and paper, or free, euros (FE). Suddenly, an informal exchange rate between the two currencies emerges.
Consider a Greek depositor keen to convert a large sum of BE into FE (say, to pay for medical expenses abroad, or to repay a company debt to a non-Greek entity). Assuming such depositors find FE holders willing to purchase their BE, a substantial BE-FE exchange rate emerges, varying with the size of the transaction, BE holders’ relative impatience, and the expected duration of capital controls.
On August 18, 2015, a few weeks after pulling the plug from Greece’s banks (thus making capital controls inevitable), the European Central Bank and its Greek branch, the Bank of Greece, actually formalized a dual-currency currency regime. A government decree stated that “Transfer of the early, partial, or total prepayment of a loan in a credit institution is prohibited, excluding repayment by cash or remittance from abroad.”
The eurozone authorities thus permitted Greek banks to deny their customers the right to repay loans or mortgages in BE, thereby boosting the effective BE-FE exchange rate. And, by continuing to allow payments of tax arrears to be made in BE, while prescribing FE as a separate, harder currency uniquely able to extinguish commercial bank debt, Europe’s authorities acknowledged that Greece now has two euros.
…click on the above link to read the rest of the article…
2016 Theme #3: The Rise of Independent (non-state) Crypto-Currencies
2016 Theme #3: The Rise of Independent (non-state) Crypto-Currencies
This week I am addressing themes I see playing out in 2016.
A number of systemic, structural forces are intersecting in 2016. One is the rise of non-state, non-central-bank-issued crypto-currencies.
We all know money is created and distributed by governments and central banks. The reason is simple: control the money and you control everything.
The invention of the blockchain and crypto-currencies such as Bitcoin have opened the door to non-state, non-central-bank currencies–money that is global and independent of any state or central bank, or indeed, any bank, as crypto-currencies are structurally peer-to-peer, meaning they don’t require a bank to function: people can exchange crypto-currencies to pay for goods and services without a bank acting as a clearinghouse for all these transactions.
This doesn’t just open the possibility of escaping the debt-serfdom of central and private banks–it opens the door to an entire global economy that’s free of the inequality and concentration of wealth and power that is the only possible output of central bank created and distributed money.
Max Keiser and Stacy Herbert and I discuss these possibilities in The Keiser Report: Radically Beneficial World (25:43).
Recall that central bank money is borrowed into existence, which means interest must be paid until the money is extinguished by the payment of debt.
In effect, today’s wars, bread and circuses, etc. will be paid for in perpetuity by our kids, grandkids and their kids. This is debt-serfdom. The only possible output of borrowing money into existence is debt-serfdom.
Debt jubilees, no matter how well-intended, simply maintain the system of bank-issued money and debt-serfdom: dialing back the debt load from impossible to bearable does nothing but continue financial feudalism.
…click on the above link to read the rest of the article…
2016 Is “Terminal Phase of Most Destructive Ponzi Scheme” in History
2016 Is “Terminal Phase of Most Destructive Ponzi Scheme” in History
This article was written by SGT and was first published at SGTreport.com.
Editor’s Comment: Most anyone who follows the economic news already knows that the signs of collapse are all over the wall, but what numbers and statistics on paper can’t convey is the pain that ordinary people are going to feel as a result of the financial decisions being made by central banks, and the actions being taken by indifferent Wall Street players.
The consequences of the 2008 economic collapse have been bad enough, though for the most part they have been subtle and hidden from view. However, the next round may well be bad enough that no one can turn away from the suffering and displacement that more economic chaos will bring. It is obvious enough who has sown the next wave, and even more plain to see who will be paying the price.
2016 Will Be Economically Devastating For Millions of Americans
by SGT Report
As Andy Hoffman from Miles Franklin recently noted there isn’t enough time in a day to cover the runaway train, snowballing avalanche, out-of-control pandemic that is the “terminal phase” of history’s largest, most destructive fiat Ponzi scheme. But we’ll try in this 2015 recap as 2016 comes barreling at us like a freight train Andy says, it will be an economically devastating year for millions of Americans.
If We Don’t Change the Way Money Is Created and Distributed, We Change Nothing
If We Don’t Change the Way Money Is Created and Distributed, We Change Nothing
The only real solution in my view is to create and distribute money at the base of the pyramid rather than to those in the top of the pyramid.
Many well-intended people want to reform the status quo for all sorts of worthy reasons: to reduce wealth inequality, restore democracy, create good-paying jobs, and so on.
All these goals are laudable, but if we don’t change the way money is created and distributed, nothing really changes: wealth inequality will keep rising, governance will remain a bidding process of the wealthy, wages will continue stagnating, etc.
If the money creation/distribution system isn’t transformed, “reform” is nothing more than ineffectual policy tweaks that offer do-gooders the illusion of progress.
Mike Swanson of Wall Street Window and I discuss the The Future of Currencies and CHS’s New Book A Radically Beneficial World (33:21)
Few are willing to admit that the way we create and distribute money at the top of the wealth pyramid necessarily generates increasing wealth inequalitybecause once we admit this, we realize 1) the money system itself is the source of inequality and 2) we have to change the money system if we want to stave off the inevitable rise of wealth inequality to the point that it generates social disorder.
In the current system, money is created by central and private banks at the top of the wealth/power pyramid, and distributed within the top of the wealth pyramid. The only possible output of this system is rising wealth inequality and debt-serfdom for three reasons:
1. Those with first access to nearly free money can outbid savers and serfs who must borrow at much higher rates of interest to snap up income-producing assets. In effect, borrowing unlimited sums at near-zero rates guarantees that those with this privilege have a built-in advantage in buying income-producing assets.
…click on the above link to read the rest of the article…
Voluntary Enslavement
Voluntary Enslavement
In recent years, I’ve been predicting that the governments, particularly those of the EU and US, will seek to eliminate paper currency. The objective will be to make monetary transactions between private parties as difficult as they can, by requiring that all transactions take place through financial institutions. If they can do this, they will effectively make a run on banks impossible in the future as the banks will simply shut off the money tap, as the Greek banks did. This power will additionally make negative interest rates and confiscations more possible.
A few years ago, this forecast was seen by most as poppycock, but the prelude has now begun, with most of the world’s banks disallowing large transfers and some lowering these amounts over time. Many governments are aiding the effort, requiring reporting on some transfers.
At some point, governments and banks will seek to eliminate paper currency, completing the encirclement of private party monetary transfer. From that point on, it would be illegal for any transfer of money to be undertaken except through a financial institution (most probably through the use of a plastic card or smartphone).
At about the same time as I began predicting the above, I also began forecasting what I considered to be a companion campaign against virtual currencies, such as Bitcoin. Such currencies will prove to be a threat to a bank-only transfer system as they would provide an alternate method of payment between private parties – one that does not come under the control of any government. Governments and financial institutions will therefore seek to eliminate virtual currencies, or make them too difficult to use.
The greatest weakness inherent in virtual currencies, in my view, is that they’re intangible. Unlike precious metals which, once physically possessed, exist forever, virtual currencies exist only as an idea. Like all fiat currencies, they have value only as long as two parties continue to have faith in their value.
…click on the above link to read the rest of the article…
Reinventing Banking: From Russia to Iceland to Ecuador
Reinventing Banking: From Russia to Iceland to Ecuador
Global developments in finance and geopolitics are prompting a rethinking of the structure of banking and of the nature of money itself. Among other interesting news items:
- In Russia, vulnerability to Western sanctions has led to proposals for a banking system that is not only independent of the West but is based on different design principles.
- In Iceland, the booms and busts culminating in the banking crisis of 2008-09 have prompted lawmakers to consider a plan to remove the power to create money from private banks.
- In Ireland, Iceland and the UK, a recession-induced shortage of local credit has prompted proposals for a system of public interest banks on the model of the Sparkassen of Germany.
- In Ecuador, the central bank is responding to a shortage of US dollars (the official Ecuadorian currency) by issuing digital dollars through accounts to which everyone has access, effectively making it a bank of the people.
Developments in Russia
In a November 2015 article titled “Russia Debates Unorthodox Orthodox Financial Alternative,” William Engdahl writes:
A significant debate is underway in Russia since imposition of western financial sanctions on Russian banks and corporations in 2014. It’s about a proposal presented by the Moscow Patriarchate of the Orthodox Church. The proposal, which resembles Islamic interest-free banking models in many respects, was first unveiled in December 2014 at the depth of the Ruble crisis and oil price free-fall. This August the idea received a huge boost from the endorsement of the Russian Chamber of Commerce and Industry. It could change history for the better depending on what is done and where it further leads.
Engdahl notes that the financial sanctions launched by the US Treasury in 2014 have forced a critical rethinking among Russian intellectuals and officials. Like China, Russia has developed an internal Russian version of SWIFT Interbank payments; and it is now considering a plan to restructure Russia’s banking system. Engdahl writes:
…click on the above link to read the rest of the article…
Debunking Anti-Gold Propaganda
Debunking Anti-Gold Propaganda
A meme is now circulating that gold is the investment equivalent of a pet rock, and that the smart investor should sell gold, and buy stocks. That’s a ridiculous notion. In fact, if you believe in buying low and selling high, this is the time to buy gold, and sell stocks.
It pays to remain as objective as you can be when analyzing any investment. People have a tendency to fall in love with an asset class, usually because it’s treated them so well. We saw that happen most recently with Internet stocks in the late ’90s and with houses up to 2007. Investment bubbles are driven primarily by emotion, although there’s always some rationale for the emotion to latch on to. Perversely, when it comes to investing, reason is recruited mainly to provide cover for passion and preconception.
In the same way, people tend to hate certain investments unreasonably, usually at the bottom of a bear market, after they’ve lost a lot of money; even thinking about the asset means reliving the pain and loss. Love-and-hate cycles occur for all investment classes.
But there’s only one investment I can think of that many people either love or hate reflexively, almost without regard to market performance: gold. And, to a lesser degree, silver. It’s strange that these two metals provoke such powerful psychological reactions – especially among people who dislike them. Nobody has an instinctive hatred of iron, copper, aluminum, or cobalt. The reason, of course, is that the main use of gold has always been as money. And people have strong feelings about money. Let’s spend a moment looking at how gold’s fundamentals fit in with the psychology of the current market.
…click on the above link to read the rest of the article…
Switzerland To Vote On Ending Fractional Reserve Banking
Switzerland To Vote On Ending Fractional Reserve Banking
One year ago (and just two months before the shocking announcement the Swiss Franc’s peg to the Euro would end, dramatically revaluing the currency, and leading to massive FX losses around the globe and for the Swiss National Bank) the Swiss held a referendum whether to demand that their central bank should convert 20% of its reserves into gold, up from 7% currently. After the early polls showed the Yes vote taking a surprising lead, the Diebold machines kicked in and the result was a sweeping victory for the No vote, without a single canton voting for sound money.
Ironically, this unexpected nonchallance about the Swiss central bank’s balance sheet by one of Europe’s more responsible nations took place just before the same bank announced CHF30 billions in losses on its long EUR positions following the revaluation of the CHF. It also took place when not just Germany, but the Netherlands and Austria announced they would repatriate a major portion of their gold in a move which, all spin aside, signals rising concerns about the existing monetary system.
We wonder if the Swiss have changed their mind about just how prudent it is to have their central bank operate as one of the world’s largest – and worst – after its CHF 30 billion loss in Q1 FX traders, and hedge funds with $94 billion in stock holdings, since then.
We may soon have the answer, because in what is shaping up to be another historic referendum on the treatment of money, earlier today the Swiss Federal Government confirmed that it had received enough signatures and would hold a referendum as part of the so-called “Vollgeld”, or Full Money Initiative, also known as the Campaign for Monetary Reform, which seeks to ban commercial banks from creating money, and which calls for the central bank to be given sole power to create the money in the financial system.
…click on the above link to read the rest of the article…
A Free Market in Interest Rates
A Free Market in Interest Rates
Unless you’re living under a rock, you know that we have an administered interest rate. This means that the bureaucrats at the Federal Reserve decide what’s good for the little people. Then they impose it on us.
In trying to return to freedom, many people wonder why couldn’t we let the market set the interest rate. After all, we don’t have a Corn Control Agency or a Lumber Board (pun intended). So why do we have a Federal Open Market Committee? It’s a very good question.
Someone asked it at the recent Cato Monetary Conference. George Selgin answered: no matter if the Fed stands pat or does something, it’s still setting rates. This is a profound truth, which brings us to a fatal flaw in the dollar.
In our irredeemable currency, interest cannot be set by the market. There’s literally no mechanism for it. To understand why, let’s start by looking at the gold standard.
Under gold, the saver always has a choice. If he likes the rate of interest, he can deposit his gold coin. If not, he can withdraw it. By withdrawing, he forces the bank to sell an asset. That in turn ticks down the price of the bond, which is the same as ticking up the rate of interest. His preference has real teeth, and that’s an essential corrective mechanism.
Unfortunately, the government removed gold from the monetary system. Now you can own it, but your choices have no effect on interest. If you buy gold, then you get out of the banking system. However, the seller takes your place, getting rid of his gold and thereby taking your place in the banking system. The dollars and gold merely swap owners, with no effect on interest rates.
…click on the above link to read the rest of the article…
