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In uncertain times, “cash is king,” but central bankers are systematically moving to eliminate that option. Is it really about stimulating the economy? Or is there some deeper, darker threat afoot?

Remember those old ads showing a senior couple lounging on a warm beach, captioned “Let your money work for you”? Or the scene in Mary Poppins where young Michael is being advised to put his tuppence in the bank, so that it can compound into “all manner of private enterprise,” including “bonds, chattels, dividends, shares, shipyards, amalgamations . . . .”?

That may still work if you’re a Wall Street banker, but if you’re an ordinary saver with your money in the bank, you may soon be paying the bank to hold your funds rather than the reverse.

Four European central banks – the European Central Bank, the Swiss National Bank, Sweden’s Riksbank, and Denmark’s Nationalbank – have now imposed negative interest rates on the reserves they hold for commercial banks; and discussion has turned to whether it’s time to pass those costs on to consumers. The Bank of Japan and the Federal Reserve are still at ZIRP (Zero Interest Rate Policy), but several Fed officials have also begun calling for NIRP (negative rates).

The stated justification for this move is to stimulate “demand” by forcing consumers to withdraw their money and go shopping with it. When an economy is struggling, it is standard practice for a central bank to cut interest rates, making saving less attractive. This is supposed to boost spending and kick-start an economic recovery.

…click on the above link to read the rest of the article…

Who Exactly is Trying to Kill off Cash?

November 24, 2015

Who Exactly is Trying to Kill off Cash?

In the Irish city of Cork, business leaders recently launched a three-month pilot project to encourage consumers to abandon the archaic use of cash by offering the chance to enter into a prize draw if they use electronic means of payment. It is a cheap, almost insulting inducement, but nonetheless probably an effective one. The ultimate aim of the scheme is to transform Cork into the first Irish city to go completely cashless.

The Race to Kill Off Cash

A few years ago such an aspiration — to do away with physical cash, a form of payment that has served mankind, for better or worse, richer or poorer, for millennia — might have seemed a little odd. Not anymore. Today cities all over the globe and even entire nations appear to be in a mad rush to kill off cash.

One obvious place that springs to mind is Scandinavia, where Denmark and Sweden are engaged in a neck and neck race to become Europe’s first cashless nation. But the trend extends far beyond Scandinavia. In London, where physical money has been practically abolished from the public transport system, the borough of Brent has proudly declared itself the first district council to go completely cashless — with a little bit of help from MasterCard.

In May this year the city of Bergamo launched an ambitious pilot schemeto become Italy’s first cashless city. The initiative, which awards people who use electronic payments with discounts on retail products, is sponsored by (once again) MasterCard, together with CartaSi, Visa, UbiBanca, Banca Popolare di Bergamo and Banco Popolare.

Meanwhile, in the UK region of South Gloucestershire, the local Conservative Party is spitting venom about the lack of “a genuinely comprehensive, multi-model, London-style [i.e. completely cashless] ‘Oyster’ payment system” for new planned Metrobus routes.

…click on the above link to read the rest of the article…

Hang Onto Your Wallets: Negative Interest, the War on Cash, and the $10 Trillion Bail-in

November 21, 2015

Hang Onto Your Wallets: Negative Interest, the War on Cash, and the $10 Trillion Bail-in

That may still work if you’re a Wall Street banker, but if you’re an ordinary saver with your money in the bank, you may soon be paying the bank to hold your funds rather than the reverse.

That is the theory, but central banks have already pushed the prime rate to zero, and still their economies are languishing. To the uninitiated observer, that means the theory is wrong and needs to be scrapped. But not to our intrepid central bankers, who are now experimenting with pushing rates below zero.

…click on the above link to read the rest of the article…

They’re coming for your cash

November 15, 2015

They’re coming for your cash

It might sound like a conspiracy theory spun by right-wing crazies. But judging by the increasing desperation of governments to reboot the world economy, it just might happen.

“It” is the recall or confiscation of cash, i.e., dollars, euros, pounds, etc., in physical form. And a key justification that those calling for this radical measure cite is that it reinforces the ability of central banks to impose negative interest rates.

Negative rates mean that lenders literally pay businesses and consumers to borrow money. They also penalize savers for hoarding it. The Danish and Swiss national banks have gone the farthest into negative territory, with interest rates of -0.75%. That means €100,000 in a euro-denominated account in Switzerland would be worth only €99,250 after one year. While these rates apply only to “excess reserves” banks maintain at the central bank, nothing stops banks from requiring depositors to share the pain.

But that’s not enough, according to some economists. Citicorp’s chief economist, a technocrat named Willem Buiter, thinks the US needs much lower interest rates to push the economy out of the doldrums. He thinks negative interest rates around -6% would do the job. But there’s one condition: For his plan to work, he says, the government must abolish cash.

It’s easy to understand why Buiter might not have warm and fuzzy thoughts about cash. After all, if your bank is taking 6% from your savings, $100 in your account would be worth only $94 at the end of one year, $88.36 after two years, and $83.06 after three years. On the other hand, a $100 bill with Ben Franklin’s picture on it would still be worth… well, $100. Buiter understands that as long as cash exists, no one will voluntarily keep their savings in accounts with negative interest rates.

…click on the above link to read the rest of the article…

Time to Keep Your Cash in the Microwave?

October 31, 2015

Time to Keep Your Cash in the Microwave?

The Fed’s Big Pivot

NORMANDY, France – “Now, I think I’ve seen everything” is an expression that – like “this is the end of history” and “I’ll never leave you” – usually turns out to be premature. But it is what we found ourselves saying yesterday. Not out loud. We just moved our lips in mute amazement.

micxrowave Modern cash storage method pioneered by desperate Swedes
Photo credit: SWNS.com

On Tuesday, the Italian government sold a 2-year note yielding MINUS 0.023%. We don’t know what is more preposterous: that the Italians were able to borrow money at a negative nominal interest rate or that the press reported this transaction with a straight face.

Everything is awesome: an essentially bankrupt government sells two year notes at a negative yield! Today’s make-believe world created by central bankers and regulators is probably the biggest economic powder keg yet – click to enlarge.

It should have provoked howls of laughter, withering scorn, and unvarnished derision. But here at the Diary, we will not point the finger and chuckle. We will not invoke our usual tone of sarcasm. We will not damn the whole thing to Hell with loud and blustery cussing.

Instead, we’ll take the high road; we just want to know what it means. But before we get to that, let us pick up the news. Here’s the latest, from Bloomberg:

“Federal Reserve officials pivoted toward a December interest-rate increase, betting that further job gains will lead to higher inflation over time and allow them to close an unprecedented era of near-zero borrowing costs. The Federal Open Market Committee dropped a reference to global risks and referred to its “next meeting” on Dec. 15-16 as it discussed liftoff timing in a statement released Wednesday in Washington, preparing investors for the first rate rise since 2006.”

…click on the above link to read the rest of the article…

Moneyweek: Hands Off Our Cash Petition

October 21, 2015

Moneyweek: Hands Off Our Cash Petition

Andy Haldane recently floated the idea of abolishing cash so that radical monetary policy like negative interest rates can be implemented.

You can sign the Moneyweek petition against this here:

http://moneyweek.com/wp/hands-off-our-cash-petition

Whereas the Bank of England’s Chief Economist Andrew Haldane announced on 18th September 2015 his intention to abolish use of cash in Britain in order to allow the bank to impose negative interest rates on savers;

Whereas this would allow banks to charge you to keep your money on deposit and make it impossible to remove your money as cash in response;

Whereas Denmark, Sweden and Switzerland have already imposed negative interest rates;

Therefore, we the undersigned, as concerned savers and investors of Great Britain, do call on Her Majesty’s British Government to:

1 Guarantee that cash will not be abolished from use in the UK

2 Guarantee that negative interest rates will not be imposed undemocratically on British savers

3 Establish a form of public consultation on the specific mandate and monetary policy limitations of the Bank of England

Legal Fictions and new Battlegrounds in the War on Cash

October 8, 2015

Legal Fictions and new Battlegrounds in the War on Cash

Greece – Ground Zero in the War on Cash?

We believe it was our friend Claudio Grass of Global Gold in Switzerland who first mentioned that the eurocracy may possibly have plans to use the Greek crisis as an opportunity to expand the ongoing war on cash. It stands to reason: Greece is well known for its extremely large “shadow economy” (the name for economic activity that flies under the radar of the greedy grasp of the State). Greece’s citizens not unreasonably regard the State as akin to a mafia organization which they are trying to avoid as much as possible (unless it promises them free goodies to buy their votes – they do of course gladly accept those).

We vividly recall an interview with a Greek shipping magnate about the constitutional provision that has relieved the country’s shipping industry from income tax. The interviewer asked (we are paraphrasing) whether the magnate thought it “fair” that this was so, and if he wasn’t troubled by his conscience in light of the Greek government debt crisis. The shipping magnate replied (again paraphrasing) along the lines of: “Just look at the government in Athens. They’re nothing but a bunch of crooks. Would you hand over your money voluntarily to Al Capone? Surely not. Well, neither do I.”

al capone Not someone you want to hand your money to…
Photo credit: Bettmann / Corbis

A great many ordinary Greeks undoubtedly agree with the shipping magnate. They have a very cynical, but ultimately quite well-informed view of the political class and the State. The reason why the Greeks are way ahead of most other European citizens in this department is rooted in history. Greece had been under Ottoman occupation from the 15^th century until 1821. The so-called millet system led to the Orthodox Christian Greek community remaining a fairly cohesive group. However, the Greeks certainly chafed under Ottoman rule.

…click on the above link to read the rest of the article…

Cash Withdrawal Limits and “Bank Holidays” Coming

September 13, 2015

Cash Withdrawal Limits and “Bank Holidays” Coming

Concerns that next crisis may be imminent
Bail-ins, withdrawal limits and negative interest rates may be imposed
FT proposes a ban on “barbarous relic” cash
Central banks would have people “completely under their control” – Bonner
Gold in safe jurisdictions will again protect wealth

Collapsing commodities prices, erratic market turmoil and the bursting of Chinese bubbles are leading to a crisis in confidence in the economic system across the globe. The long-expected crisis to which the global financial and systemic crisis in 2008 may have been a mere prelude may be upon us.

Governments have no appetite for further bailouts. The EU states have passed legislation which will make the banks or rather unfortunate and unsuspecting depositors liable for the bank’s lending and speculative profligacy.

It is claimed that this is to “protect” the taxpayer. In reality it will likely lead to bail-ins – the confiscation of deposits. It is likely that that in a crisis within the banking system this bail-in mechanism would be imposed on an impromptu “bank holiday” followed by limits on cash withdrawals as were applied in Cyprus and more recently to depositors in Greece.

As has been pointed out by many other analysts, the unelected powers-that-be have used all their conventional weaponry to stave off the consequences of their irresponsible ultra loose monetary policies and massive buildup of debt globally – the largest ever seen in the history of the world.

The typical response to a crisis has been to slash rates from somewhere around 6% – the historic post war norm in the west – to between 0% and 1%. This has stored up an even crisis in the future – the question is not if we have another crisis but when.

…click on the above link to read the rest of the article…

The Case for Outlawing Cash

September 3, 2015

The Case for Outlawing Cash

Losing Confidence

GUALFIN, Argentina – September is here. As expected, market volatility is increasing. The Great Zombie War is intensifying. And investors are getting scared. On Tuesday, the Dow lost 470 points – a nearly 3% drop. Bloomberg:

“U.S. stocks joined a worldwide sell-off, after equities’ worst month in more than three years, amid continuing concerns that China’s slowdown will weigh on the global economy.

‘The problem is, as much as China is the catalyst for this, it’s also that we’re seeing weakness in fundamentals here,’ said Matt Maley, an equity strategist at Miller Tabak & Co LLC in New York.

‘A lot of company earnings were hurt by China in the second quarter and it’s only gotten worse. People are losing confidence with the whole situation there breaking down, not just in the stock market but in data as well.’”

Burning_Money Now they even want to do away with the State’s own scrip – because it might help you to escape the depredations of madcap central bankers.
Image credit: Stephen Krow / Getty Images

Yes, investors are losing confidence…they’re probably losing confidence in corporate managers, for instance. Who wants to own stock in companies run by numskulls who buy back shares in their companies at record prices just before a major sell-off?

The still yo-yoing DJIA – “investors” (we use the term loosely) came back out to play on Wednesday already, via StockCharts, click to enlarge.

Or maybe they’re wondering whether the world’s $200 trillion in total debt (roughly 300% of total output) can possibly be paid back? Or maybe they’re beginning to puzzle out how scammy and fraudulent the Fed’s policies are.

…click on the above link to read the rest of the article…

The Financial Times Calls for Ending Cash, Calls it a “Barbarous Relic”

August 28, 2015

The Financial Times Calls for Ending Cash, Calls it a “Barbarous Relic”

Screen Shot 2015-08-27 at 3.01.39 PM

Earlier this week, as the financial world was mesmerized by a min-stock market crash, the Financial Times published a dastardly little piece of fascist propaganda.

There is no more egregious anti-liberty economic policy imaginable than banning cash. I covered this earlier in the year in the post, Martin Armstrong Reports on a Secret Meeting in London to Ban Cash. Here’s an excerpt:

At this point, anyone paying even the slightest bit of attention to the central planning economic totalitarians running the fraudulent global financial system is aware of the blatant push in the media to acclimate the masses to accepting a “cashless society.”

In the mind of an economic tyrant, banning cash represents the holy grail. Forcing the plebs onto a system of digital fiat currency transactions offers total control via a seamless tracking of all transactions in the economy, and the ability to block payments if an uppity citizen dares get out of line.

While we’ve all seen the idiotic arguments for banning cash, i.e., it will allow central planners to more efficiently centrally plan economies into the ground, Martin Armstrong is reporting on a secret meeting in London with the aim of getting rid of any economic privacy that remains by ending cash.

Three months later, the Financial Times publishes an article titled, The Case for Retiring Another “Barbarous Relic.” When you start to see increased propaganda about banning cash, you know the status quo is very scared and things are getting very serious. You’ve been warned.

From the FT:

The fact that people treat cash as the go-to safe asset when banks are teetering is heavy with historical irony. Paper money was once the symbol of monetary irresponsibility. But even as individuals have taken recent crises as reasons to stock up on banknotes, authorities would do well to consider the arguments for phasing out their use as another “barbarous relic”, the moniker Keynes gave to gold.

…click on the above link to read the rest of the article…

Stop Financializing the Human Experience

August 11, 2015

Stop Financializing the Human Experience

In this financialized hall of mirrors, narcissism replaces identity and the authentic self is rendered incoherent.

Correspondent Dani A.M. (of Removing the Shackles) was kind enough to identify three bits of advice from my recent conversation with Max Keiser onSummer Solutions (25:45): (9:20 min: “We’ve been brainwashed into financializing the human experience.”)

1. Stop financializing the human experience

2. Acquire skills, not credentials

3. Vote with your Feet

These are the themes I’ll be addressing this week.

What does financializing the human experience mean? It means turning everything into a financial transaction that profits an enterprise and the state.Since the state needs profitable enterprises to generate its tax revenues (and to pay wages that generate payroll/income taxes), the state is an implicit partner in everyfinancializing the human experience transaction.

In an increasingly cashless, debt-dependent culture, every financial transaction generates income for banks: credit card and debit card fees, interest on credit cards, etc.

Here are some common examples:

— Mom and Dad work long hours to afford childcare. Maybe they like working for the state or Corporate America more than caring for their kids (or sharing the care of several kids with other parents), but the system incentivizes maximizing income and paying for childcare as a profitable transaction.

In other words, childcare for many has been distilled down to a financial decision.

— Dinner with friends is purchased, generating income for an enterprise, a bank and taxes for the state. If people no longer learn how to cook, then sharing a meal with friends necessarily becomes a financial transaction.

— A sense of self must be purchased via signifiers of identity and self-worth.

The obsession with brands and other signifiers of belonging reflects one thing, and only one thing: a pervasive fragility of self. Unsurprisingly, our selfhood is incredibly fragile in a culture that glorifies the impossible (thin, fit, super-smart, witty, personable, creative, wealthy oh and of course humble) and sows insecurity as a means of selling you something.

…click on the above link to read the rest of the article…

The War On Cash: Why Now?

July 29, 2015

The War On Cash: Why Now?

You’ve probably read that there is a “war on cash” being waged on various fronts around the world. 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?

Before we get to that, let’s distinguish between physical cash — currency and coins in your possession — and digital cash in the bank. The difference is self-evident: cash in hand cannot be confiscated by a “bail-in” (i.e., officially sanctioned theft) in which the government or bank expropriates a percentage of cash deposited in the bank. Cash in hand cannot be chipped away by negative interest rates or fees.

Cash in the bank cannot be withdrawn in a financial emergency that shutters the banks (i.e., a bank holiday).

When pundits suggest cash is “obsolete,” they mean physical paper money and coins, not cash in a bank. Cash in the bank is perfectly fine with the government and its well-paid yes-men (paging Mr. Rogoff and Mr. Buiter) because this cash can be expropriated by either “bail-ins” or by negative interest rates.

Inflation and Negative Interest Rates

Mr. Buiter, for example, recently opined that the spot of bother in 2008–09 (the Global Financial Meltdown) could have been avoided if banks had only charged a 6 percent negative interest rate on cash: in effect, taking 6 percent of the depositor’s cash to force everyone to spend what cash they might have.

…click on the above link to read the rest of the article…

Germany Replacing Bank Cards and Eliminating Cash Withdrawals

July 20, 2015

Germany Replacing Bank Cards and Eliminating Cash Withdrawals

The game is afoot to eliminate CASH. According to reliable sources, Maestro is seriously under attack. In Germany, Maestro was a multi-national debit card service owned by MasterCard and founded in 1992. Maestro cards obtained from associate banks and can be linked to the cardholder’s current account, or they can be used as prepaid cards. Already we see the cancellation of such cards and the issuing of new debit cards. Why? The new cards cannot be used at an ATM outside of Germany to obtain cash. Any attempt to get cash can only be an advance on a credit card.

Little by little, these people are destroying everything that held the world economy together. Their hunt for spare change for tax purposes is undermining every aspect of civilization. This will NEVER END NICELY for they can only think about their immediate needs with no comprehension of the future they are creating. Indeed, somebody better pray for us, for those in charge truly do not know what they are doing.

We seriously need to hit the Ctrl-Alt-Delete button on government. This is total insanity and we are losing absolutely everything that makes society function.

Once they eliminate CASH, they will have total control over who can buy or sell anything.

Why Banks & Governments Hate Cash: Bank Runs

July 1, 2015

Why Banks & Governments Hate Cash: Bank Runs

The photos from Greece showing long lines at ATMs are astonishing. Even after the deposit outflows from Greek banks over the past weeks, there are still large numbers of people who are trying to get their money out of the banking system. With the banks closed, ATMs are the only way for people to get any cash. Let’s not beat around the bush in describing what is happening: this is a bank run. Even though Greece has a deposit insurance scheme that covers up to €100,000 in savings accounts, trust in the banking sector is declining and people are trying to get their money out. Cash is the ultimate means by which consumers can restrain the behavior of governments and banks, which is why governments and banks are doing everything they can to do away with cash.

The problem with the banking system is that banks today operate as fractional reserve banks. Money deposited into savings accounts is loaned out up to the bank’s reserve requirement. If the reserve requirement is 10%, then 90% of the money in savings accounts is loaned out. If the reserve requirement is 3%, then 97% of the money in savings accounts is loaned out. The problem comes about in that the bank simultaneously gives the full use of that money to borrowers, often lending at long terms up to 30 years in the case of mortgages, while still telling depositors that they can withdraw their money at any time. So what happens when depositors want to withdraw more money than the bank has on reserve? The bank tries to refuse to honor withdrawal requests. Then the public loses confidence in the bank, depositors line up to demand their money, and you have a scene out of “It’s a Wonderful Life.”

…click on the above link to read the rest of the article…

Gold, the War on Cash and Greece – a Podcast with Claudio Grass

June 20, 2015

Gold, the War on Cash and Greece – a Podcast with Claudio Grass

Claudio Shares his Ideas

We were quite busy lately and are therefore actually a bit late in posting this podcast, in which our good friend Claudio Grass of Global Gold is interviewed by The Daily Coin on the recent hot topics of Greece, the declaration of war against cash and how gold fits into all of this.

3263efd Claudio Grass, CEO of Global Gold

Anyway, it is always refreshing to hear Claudio’s viewpoints, and although there is currently always the potential of events overtaking one’s guesses/predictions in connection with Greece, Claudio does offer an interesting perspective here. One of the problems Greece has (which at the same time, is the only trump card of the creditors, since they can switch off ELA anytime) is deposit flight. People are taking their money out of Greek banks in droves, inter alia hoarding cash. As Claudio avers, similar to Cyprus, Greece could end up becoming a test bed for unsavory policies in the attempt to bring it to heel.

The people interviewing Claudio are trying to direct the conversation toward a discussion of alleged gold price manipulation at the beginning, but Claudio politely sidesteps the issue. We’re just mentioning this because we want you to know that in spite of the impression one might get at the beginning, this topic isn’t what the podcast is about.

As far as we are concerned, we do have some sympathy regarding the idea that governments and central bankers don’t really want to see the gold price going bananas, given that it would deliver an unwanted verdict on their fiat money Ponzi. That seems obvious enough. However, if, as some observers allege, a conspiracy to suppress the gold price on an ongoing basis over the past several years, even decades, exists, the endeavor has to be called one of the biggest successes in history in terms of enforcing omerta on its members, and in light of the gold price trend between 2000 and 2011, also one of the biggest failures in the entire history of market manipulations.

…click on the above link to read the rest of the article…

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