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The Dollar Is Dying
The Dollar Is Dying
Insulting the Captive Audience
This week, while perusing the Federal Reserve’s balance sheet figures, we came across a rather curious note. We don’t know how long the Fed’s had this note posted to its website. But we can’t recall ever seeing it. The note reads as follows:
“The Federal Reserve’s balance sheet has expanded and contracted over time. During the 2007-08 financial crisis and subsequent recession, total assets increased significantly from $870 billion in August 2007 to $4.5 trillion in early 2015. Then, reflecting the FOMC’s balance sheet normalization program that took place between October 2017 and August 2019, total assets declined to under $3.8 trillion. Beginning in September 2019, total assets started to increase.”
Directly below this note is the following chart:
Total assets of the Federal Reserve since 2008 – never-ending expansion (shaded areas indicate recessions) [PT]
Does this look like a balance sheet that expands and contracts over time?
Quite frankly, the Fed’s balance sheet chart, and the extreme dollar debasement that it illustrates, is a disgrace. The fact that the Fed had to add this flagrantly false note as preface to its disgraceful chart is an insult.
This is a direct offense to anyone who has built a modest savings account by exchanging their time for dollars. The time and effort put to obtaining these dollars is being stolen by the insidious process of central bank engineered money supply inflation. Year in and year out, these earned dollars will be worth less and less.
Moreover, normalization is a Fed lie. It never happened. Yes, $700 billion was contracted from the Fed’s Balance sheet between October 2017 and August 2019. But that was in the wake of a $3.5 trillion expansion. And it was quickly followed by another $3 trillion balance sheet expansion this spring.
…click on the above link to read the rest of the article…
Shortage of $50 Canadian Bills?
Shortage of $50 Canadian Bills?
A reader sent in this photo that was posted at the head office branch of Bank of Montreal in Vancouver, which is one of the largest banks in Canada. This is a trend that is beginning to appear around the world. However, central banks are using the virus as an excuse to cut off the supply of paper money to go all digital. This is not necessarily in accordance with the political direction of the immediate political agenda. It appears to be unfolding autonomously just to get people accustomed to the idea that physical money is on its way out.
There is a rise in hoarding cash globally. Canadian dollars are being hoarded domestically and to some extent in Asia alongside the US dollar. Europeans and Canadians are used to paper money and coins being canceled routinely so the average person understands that they cannot hoard euros.
In the case of Canada, the paper currency of the colonial governments, prior to each entering confederation, are no longer valid as was the case with the colonial paper money issued by the various states before joining the United States. However, the Dominion of Canada currency of Her Majesty’s Government issued 1870 and 1935, is also not valid. Additionally, Canadian chartered banks, from pre-Confederation to 1944, which also issued currency, is also not valid. Canada, like Europe, old banknotes are canceled and can be redeemed at the Bank of Canada.
Hoarding Cash
Hoarding Cash
The reason there is a shortage of cash developing around the world is rather straight-forward. The trust in the government is collapsing. Italy has just lowered the legal amount someone can pay for anything in cash from €3000 to €2000. Australia made it a criminal act to pay for anything with A$10,000 or more (US$7,000). In Switzerland, the limit on cash you can withdraw from an ATM is CHF5,000. In Germany, the limitation is typically €1000. Greeks abroad will be able to withdraw up to 5,000 euros ($5,800) a month.
In the United States, the US Treasury says the pandemic has significantly disrupted the supply chain and circulation patterns of US coins. Additionally, the US Mint has been printing fewer coins to protect its employees from COVID-19. The World Health Organization (WHO) has not advised banning paper money, but it has stressed the need for handwashing after touching cash, which is a subtle caution that money should be limited. Some central banks are deploying measures to sterilize paper money with heat or UV light. Even the Fed began a seven to 10-day quarantine for United States dollars returning to the country from Europe and Asia.
It is very clear that governments are trying to paint money as dirty, and the solution is to eliminate physical money, despite the fact that it has been in use since about the 7th century BC. All of a sudden, it is a danger after 28 centuries. This plays nicely into the Socialist’s dream to control everything!
“Panic-Driven Hoarding Of Bank Notes”: People Aren’t Abandoning Cash During The Pandemic, They’re Socking It Away
“Panic-Driven Hoarding Of Bank Notes”: People Aren’t Abandoning Cash During The Pandemic, They’re Socking It Away
Habits change in the midst of a global recession, not to mention a global pandemic. We have already looked at how the pandemic has caused seismic shifts in many industries, but it is also causing a shift in how people think about, handle and (in this case) hoard cash.
While we have been told non-stop that the pandemic is going to prompt the demise of paper currency and the words “digital dollar” continue to make appearances in government white papers and studies, the Bank of England found that there was actually a marked increase in bills in circulation in places like the U.S., Canada, Italy, Spain, Germany, France, Australia and Russia.
And while we continue to hear arguments about a cashless society being more efficient and less virus-friendly, it would still pose a major challenge to implement and would – in the case of this study – directly contradict how people are handing their cash during the global pandemic, according to Bloomberg.
Charles Goodhart and co-author Jonathan Ashworth wrote in their study: “While the economic shutdowns and increased use of online retailing are currently diminishing cash’s traditional function as a medium of exchange, it seems that this is being more than offset by panic driven hoarding of banknotes.”
“Cash in circulation has actually been growing strongly,” they continued. And while it may just be a small portion of a percentage of the cash that Central Banks have printed, the velocity of money can’t be ignore for inflationary purposes.
The research stands at odds with President Donald Trump’s former economic adviser Gary Cohn, who recently advocated for the disappearance of cash. Up until now, cash use has been on the decline due to credit cards and electronic transferring of money.
…click on the above link to read the rest of the article…
The Biggest Economic Threat Today
The Biggest Economic Threat Today
Kind heaven, no! A fresh economic scourge is upon the land. Announces CNN:
“New Threat to the Economy: Americans Are Saving Like It’s the 1980s.”
Is a higher evil possible? Thus we are informed:
Americans are slashing their spending, hoarding cash and shrinking their credit card debt as they fear their jobs could disappear during the coronavirus pandemic…
Although caution is a logical response to that uncertainty, hunkering down also poses a risk to the recovery in an economy dominated by consumer spending. A so-called V-shaped recovery can’t happen if consumers are sitting on the sidelines…
The savings rate in the United States climbed from 8% in February to 13.1% in March. That was the highest savings rate since November 1981.
The article further reminds us that consumer spending constitutes some 70% of the United States economy.
And so the old bugaboo rises from the grave yet again — the “paradox of thrift.”
The Evils of Saving
The individual saver may be the model of prudence, of frugality, of forbearance… of thrift itself.
But if the entire nation tied down its money?
A savage cycle would feed and feed upon itself… until the economy is devoured to the final crumbs.
Consumption would dwindle to near-nonexistence. GDP would collapse in a heap. Waves of bankruptcies would wash through.
All this because the selfishness of savers. They refuse to untie their purse strings… and spend for the greater good.
This paradox of thrift is perhaps the mother myth of economists in the Keynesian line.
Yet no paradox exists whatsoever.
Today we maintain — again — that saving is an unvarnished blessing, at all times, under all circumstances.
Let us first plunge a stake through the squirming heart of another myth:
The myth that consumer consumption constitutes 70% of the United States economy…
…click on the above link to read the rest of the article…
Demand for Bank Notes in Dollars & Euros Spikes Despite Fears of Covid-19 Contaminated Cash
Demand for Bank Notes in Dollars & Euros Spikes Despite Fears of Covid-19 Contaminated Cash
A curious phenomenon.
In the United States, as coronavirus concerns grew and state after state went into lockdown, and as consumption plunged and unemployment exploded at a previously unimaginable rate, the amount of physical dollars in circulation spiked to $1.89 trillion, as of the Federal Reserve’s balance sheet on April 16, having jumped 9.1% compared to a year earlier.
During the darkest days of the Financial Crisis, the demand for U.S. dollar banknotes spiked at year-over-year rates of over 8% for ten straight months and peaked at rate of 11%. But that was nothing compared to what happened during the Y2K craze, when fears that computer systems would malfunction when dates rolled over in the new millennium triggered a mad rush for US dollar banknotes. In December 1999 the total value of dollar bills in circulation spiked by 16.9% from a year earlier, the highest rate since the war-years of the 1940s:
The total value of euro banknotes in circulation in March, as countries across the Eurozone went into Covid-19 triggered lockdowns, increased by €36 billion from February, to €1.31 trillion, according to the ECB. It was the fastest monthly increase since October 2008. And it was up 8.1% from a year earlier. This all happened as consumption in the region slumped to unprecedented levels.
Bank notes denominated in US dollars and euros, the two biggest global reserve currencies, are stashed away in large quantities in other countries with unstable currencies, and they’re used to trade certain types or merchandise on the global black market. The euro is also used as currency in some areas that are not part of the Eurozone. And the dollar is used actively in countries that are either fully or partially dollarized. The Fed has estimatedthat around 70% of 100 dollar bills, which account for nearly 80% of the total value of U.S. currency, are held abroad.
…click on the above link to read the rest of the article…
COVID-19 and the War on Cash: What Is Behind the Push for a Cashless Society? [SHORT]
COVID-19 and the War on Cash: What Is Behind the Push for a Cashless Society? [SHORT]
Cash may well become a casualty of the COVID-19 pandemic.
As these COVID-19 lockdowns drag out, more and more individuals and businesses are going cashless (for convenience and in a so-called effort to avoid spreading coronavirus germs), engaging in online commerce or using digital forms of currency (bank cards, digital wallets, etc.). As a result, physical cash is no longer king.
Yet there are other, more devious, reasons for this re-engineering of society away from physical cash: a cashless society—easily monitored, controlled, manipulated, weaponized and locked down—would play right into the hands of the government (and its corporate partners).
To this end, the government and its corporate partners-in-crime have been waging a subtle war on cash for some time now.
What is this war on cash?
It’s a concerted campaign to shift consumers towards a digital mode of commerce that can easily be monitored, tracked, tabulated, mined for data, hacked, hijacked and confiscated when convenient.
According to economist Steve Forbes, “The real reason for this war on cash—start with the big bills and then work your way down—is an ugly power grab by Big Government. People will have less privacy: Electronic commerce makes it easier for Big Brother to see what we’re doing, thereby making it simpler to bar activities it doesn’t like, such as purchasing salt, sugar, big bottles of soda and Big Macs.”
Much like the war on drugs and the war on terror, this so-called “war on cash” is being sold to the public as a means of fighting terrorists, drug dealers, tax evaders and now COVID-19 germs.
Digital currency provides the government and its corporate partners with the ultimate method to track, control you and punish you.
…click on the above link to read the rest of the article…
Mapping out the Banking Elite’s Goal for a Cashless Monetary System – Part Two
Mapping out the Banking Elite’s Goal for a Cashless Monetary System – Part Two
In the first part of this article we traced the development of the ‘Utility Settlement Coin‘ – a project that began in 2015 and which has now evolved through the inception of a consortium called Fnality International. Fnality are comprised of a number of the world’s biggest banks including Barclays and UBS, all of whom are shareholders in the scheme. Their objective as stated on the company’s website reads:
Fnality International has been founded to create a network of decentralised Financial Market Infrastructures (dFMIs) to deliver the means of payment-on-chain in tomorrow’s wholesale banking markets.
In practice, what Fnality are seeking to deliver is the construction of a distributed ledger technology based global payment system, one that can ‘facilitate tokenised, peer-to-peer markets‘.
Before we look into this more, let’s examine some of the key figureheads behind the project. First there is the CEO Rhomaios Ram, who for the best part of two decades worked for Deutsche Bank in roles that included European Head of Currencies & Commodities and Head of Transaction Banking in the UK and Ireland. The Chairman of Fnality, Jim Turley, has also worked at Deutsche Bank in various different positions. Outside of commercial banking, Turley once served on the board of the New York Fed Foreign Exchange Committee.
But perhaps the standout name on Fnality’s management team is Daniel Heller, the firm’s advisor on regulatory affairs. Described as an expert in financial sector regulation and financial stability, Heller has a track record of having served at both the Bank for International Settlements and the International Monetary Fund. At the BIS he was head of the Secretariat of the Committee on Payment and Settlement Systems, whilst at the IMF he was the executive director for Switzerland, Poland, Serbia, Azerbaijan, and four Central Asian republics.
…click on the above link to read the rest of the article…
Economists Puzzled By Surge In US Money Supply
Economists Puzzled By Surge In US Money Supply
Summary:
- Uncertainty incites a dash to cash, which we’ve seen at an accelerated pace beginning about five months ago, amounting to $887.4B; In the two weeks ended September 30th, MZM rose by $158.1B, a figure that has only been eclipsed in the immediate aftermath of 9/11
- Declining inflation expectations have netted record levels of households expecting rising real income gains; and yet, consumers are less confident about economic growth with a third anticipating rising unemployment captured in the continued rise in the fear of the unknown
- Those aged 45 and under expect annual income gains of more than twice households as a whole; this corroborates the top-third of income earners’ (managers’) higher unemployment rate expectations vis-à-vis middle-income-earners’ (worker bees’) job market outlook
We Americans are drawn to nicknames that evoke our cities’ characteristics: The Big Apple, The Windy City, Hotlanta. But those passionate Italians demand their cities be identified by the vividness of color, an element that played right into the logo design of the world’s most iconic sports car. As for the horse, that image was painted on the SPAD S.XIII flown by Francesco Baracca, Italy’s World War I flying ace who recorded an astounding 34 kills before being killed himself in 1918. As recounted by Enzo Ferrari, fate stepped in as such, “In ‘23, I met count Enrico Baracca, the hero’s father, and then his mother, countess Paulina, who said to me one day, ‘Ferrari, put my son’s prancing horse on your cars. It will bring you good luck’. The horse was, and still is, black, and I added the canary yellow background which is the color of Modena.”
Should Americans Hoard Cash?
Should Americans Hoard Cash?
QUESTION: Martin, I appreciate all the information that you provide and just got done reading about money shortage and hoarding. Would it be good for US citizens to hoard also? Is there any difference in hoarding dollars or gold and silver coins? Thanks for your comments.
DM
ANSWER: In order for gold and silver to be a medium of exchange, it requires the general population to accept that. The older generations know what a silver quarter or a $20 gold coin might be. However, the younger generation does not. Paper dollars will still be best to hoard for every day use until about 2022. At that time, we will have to reassess the climate of the monetary system. There are those videos where people were offered a 10 oz bar of silver of a chocolate bar. They took the chocolate.
Gold and silver should be in coin form. Bars will not be easily used among the average person.
8-Reasons To Hold Some Extra Cash
8-Reasons To Hold Some Extra Cash
Over the past few months, we have been writing a series of articles that highlight our concerns of increasing market risk. Here is a sampling of some of our more recent newsletters on the issue.
- Never Hurts To Ring The Cash Register
- Looking For A Sellable Rally
- Bull vs. Bear Case
- Don’t Fear A Bear Market
- Risk Happens Fast
The common thread among these articles was to encourage our readers to use rallies to reduce risk as the “bull case” was being eroded by slower economic growth, weaker earnings, trade wars, and the end of the stimulus from tax cuts and natural disasters. To wit:
These “warning signs” are just that. None of them suggest the markets, or the economy, are immediately plunging into the next recession-driven market reversion.
However, The equity market stopped being a leading indicator, or an economic barometer, a long time ago. Central banks looked after that. This entire cycle saw the weakest economic growth of all time couple the mother of all bull markets.
There will be payback for that misalignment of funds.“
As I noted on Tuesday, the divergences between large-caps and almost every other equity index strongly suggest that something is not quite right. As shown in the chart below, that negative divergence is something we should not discount.
However, this is where it gets difficult for investors.
- The “bulls” are hoping for a break to the upside which would logically lead to a retest of old highs.
- The “bears” are concerned about a downside break which would likely lead to a retest of last December’s lows.
- Which way will it break? Nobody really knows.
This is why we have been suggesting raising cash on rallies, and rebalancing risk until the path forward becomes clear. Importantly:
…click on the above link to read the rest of the article…
“Cashless” Sweden Suddenly Warns Citizens: Hoard Banknotes & Coins In Case Of Cyber-Attack Or War
“Cashless” Sweden Suddenly Warns Citizens: Hoard Banknotes & Coins In Case Of Cyber-Attack Or War
For years, we have commented on the Swedish government and the Riksbank pushing for a “cashless society.”
The Riksbank has over 1,000 articles posted on its website on the “cashless society“. The emphasis worked: between 2013 and 2017, the amount of cash in circulation dropped by 35%, earning Sweden a reputation as the world’s “most cashless nation”:
Many of Sweden’s bank branches had stopped handling cash altogether.
Figures from the Royal Institute of Technology in Stockholm show that only 18% of all payments made today in Sweden are in cash – a 15% drop from the previous year. Meanwhile figures from the Swedish Trade Federation show that most Swedish retailers say that 80% of their commerce is from card payments. A number that probably will be 90% by 2020. Such is the appetite for digital commerce in Sweden that many predicted it could become the world’s first cashless society.
But, now, as The Daily Mail reports, The Swedish Civil Contingencies Agency, an arm of the government, has sent guidance to every home telling residents to squirrel away “cash in small denominations” in case of emergencies ranging from power cuts or technology glitches to terrorism, cyber-attacks by a rogue government or war.
Riksbank, the country’s central bank, last week called for an inquiry into the risks posed by a future cashless society.
Officials told parliament that hard cash was important “not just in times of crisis and war, but also in peacetime.”
In December, Britain’s Access to Cash Review warned that Britain too was ‘sleepwalking into a cashless society’, the Daily Mail reported.
Chair Natalie Ceeney said, “If we don’t take action now in this country, we’re only a couple of years away from Sweden.”
The Demise of Physical Money: A Retail Worker’s Perspective
The Demise of Physical Money: A Retail Worker’s Perspective
Something I have come to realise about money is that the more you come into direct contact with it, the less alluring it becomes. That may sound like a hollow platitude, but when your history of paid work has predominately involved handling thousands of pounds through face to face transactions and back office duties, the worthlessness of fiat currency burrows into your psyche.
That is not a fatuous comment. I recognise that the entity I proclaim to be worthless is the same entity that allows me to eat and to sleep with a roof over my head. Nevertheless, it is not as simple as surmising that it is the intrinsic value of money that grants the ability to exchange funds for goods. Money has no intrinsic value as I came to discover.
This time two years ago I secured a job working in the cash office of a UK supermarket. It was an opportunity that came about just as I had begun to question the true nature and value of money.
My perception of cash changed on coming across a postcard pack published by the Bank of England called, ‘Your Money: What the Bank Does‘. The pack is no longer available through the bank’s revamped website, but fortunately I downloaded a copy before it was taken down.
Contained within the pack is a section titled, ‘Banknotes and the Promise to Pay‘. Here, the bank offers up a compelling question:
What gives modern banknotes their face value, when they cost only a few pence to make?
The answer may or may not surprise you:
…click on the above link to read the rest of the article…
The Super Wealthy Are Already Preparing For NIRP and Worse
The Super Wealthy Are Already Preparing For NIRP and Worse
The Global Elite are preparing for Negative Interest Rate Policy (NIRP) and Wealth Grabs.
How do I know?
They’re moving their money into physical cash.
Physical cash represents one of the rare loopholes in our current financial system. When money is in actual physical cash it can’t be charged interest by a bank engaged in NIRP. It’s also much easier to hide from the Political Class intent of imposing wealth taxes and other capital grabs.
With that in mind, consider that the number of $100 bills in circulation has DOUBLED since 2008. In fact, there are now MORE $100 bills that $1 bills in the financial system.
The number of outstanding U.S. $100 bills has doubled since the financial crisis, with more than 12 billion of them across the world, according to the latest data from the Federal Reserve. C-notes have passed $1 bills in circulation, Deutsche Bank chief international economist Torsten Slok said in a note to clients this week.
Source: CNBC
Let’s be blunt here, the folks who have a lot of money to hide are usually the ones with the best connections to the elites.
As a result, they typically know what is coming down the pike before the rest of us. Which is why it’s critical to pay attention to what these people DO rather than just say.
Consider the following:
- The IMF has already called for a wealth tax of 10% on NET WEALTH.
- More than one Presidential candidate for the 2020 US Presidential Race has already openly called for a wealth tax in the US.
- Polls suggest that the majority of Americans support a wealth tax.
And if you think this will stop with the super wealthy, you’re mistaken. You could tax 100% of the wealth of the top 1% and it would finance the US deficit for less than six months.
Which means…
…click on the above link to read the rest of the article…
Global De-Banking On The Rise? $100 Bills See Mysterious Surge In Circulation
Global De-Banking On The Rise? $100 Bills See Mysterious Surge In Circulation
It has been three years since the establishment launched its official ‘war on cash’ by eliminating Europe’s €500 bill, under the pretense that this effort would be fighting financial crime, terrorism, corruption and drug dealers.
Of course, as we wrote at the time, what Europe and the rest of the world’s elites would be truly doing is setting the scene for ever more aggressive NIRP, and by removing the highest denomination bank notes, it would make evading negative rates that much more difficult and costly (albeit would certainly favor gold).
How did the ‘war on cash’ workout? Not so well, as CNBC’s Kate Rooney points out, the amount of $100 bills in circulation is surging. And it’s leaving some economists scratching their heads.
The number of outstanding U.S. $100 bills has doubled since the financial crisis, with more than 12 billion of them across the world, according to the latest data from the Federal Reserve. C-notes have passed $1 bills in circulation, Deutsche Bank chief international economist Torsten Slok said in a note to clients this week.
Generally, economists believe the surge is related to people around the world wanting to hoard cash, a similar force that’s driven the interest in cryptocurrencies. High denomination, high value currency notes have historically been a preferred form of payment for criminals, given the anonymity, lack of transaction record and relative ease with which they can be brought across borders.
Nicholas Colas, co-founder of DataTrek Research, has been down the “rabbit hole of a topic” for more than a decade. He said the growth in $100 bills in circulation is a signal the world is relying on them as a store of value — and still using them for international crime.
…click on the above link to read the rest of the article…
