The Latest Crazy Idea From Economic Experts: Abolish Cash (But Don"t Tell The People)

Via GEFIRA,

In a recent paper - The Macroeconomics of De-Cashing, Alexei Kireyev of the International Monetary Fund advises abolishing cash without having the citizens aware of the process.

First, large banknotes are to be withdrawn from circulation, next limits on cash transactions are to be imposed, then computerization of the world’s financial system and control of international cash transactions are to be enforced and, finally, private companies are to be encouraged to avoid cash transactions.

Kireyev draws on the ideas of former IMF chief Kenneth Rogoff.

In his 2016 book “The Curse of Money”, he advocated the abolition of cash. In his opinion, it would contribute to the fight against crime, tax evasion and the reduction of the grey area.

The ECB obliged him and promised not to print the 500 euro note after 2018.

The government of India did the same thing: on November 9,2016, it unexpectedly devaluated all 500 and 1000 rupee banknotes over the night – a severe blow against the black economy and corruption. The next day, chaos reigned on India’s streets – crowds of people in front of banks, empty ATMs – everyone wanted to withdraw his money, exchange the old rupees for new, valid ones, and there were even casualties.

The other governments eagerly followed this ideas of great economic gurus, not worrying about what was happening in the Indian streets:

Australia wants to withdraw its 100 notes from circulation,and Venezuela has already abolished the 100 bolivar note.

France, Italy, Spain and Greece already have ceilings for cash withdrawals, and a ceiling of EUR €5000 is currently being discussed in Germany.

In some countries, the renunciation of cash is becoming a means of political struggle.

In Poland, Prime Minister Mateusz Morawiecki introduced cashless payments to the state postal service. Soon it will also be possible to pay his tickets directly on the patrol car. Not all Polish politicians probably like the idea that officials will not come into contact with cash – for example, the head of the Polish National Bank Adam Glapi?ski, who introduced the new 500 zloty note at the same time.

The abolition of cash is only one step on the road to even greater insanity: Kenneth Rogoff has other crazy ideas behind him.

The craziest: he demanded negative interest from European politicians, on the grounds that they are necessary anyway when the next crisis comes. We remind the reader that negative interest rate is limited by cash. If interest becomes too negative, people will hoard cash.

What consequences would his idea have if it were implemented? What if the negative interest rates were introduced? The money from accounts would flow into tangible assets, especially jewellery, gold bars and other precious metals. Their prices would rise to unprecedented levels, as would inflation driven by speculation. This would be boosted by rising real estate prices, as people would invest in houses rather than in worthless plastic money. The barter trade and black market would flourish as it did in times of war – the opposite of what is desired would be achieved. And the criminals and corrupt politicians would certainly find another means of exchange to conduct their business – it is well known that arms dealers and terrorist groups pay with diamonds. The abolition of cash and introduction of negative interest rate would dispossess ordinary citizens, making them transparent to the authorities at any time – after all, it would be easier to control and influence the transparent people whose lives can be traced by account statements.

The renowned economists, bankers and governments forget that cash cannot be abolished, only money printed by central banks can be abolished. They do the calculation in their ivory towers without considering the host, without ordinary citizens. The citizens will be outraged by this and take to the streets, as they did after the devaluation of banknotes in India. In the end they will find alternative currencies to do their business without the government’s interference.

The economic gurus don’t care – the experiment on the living organism is important, even if it kills them.

Tilt! Game Over...

Authored by Jeff Thomas via InternationalMan.com,

Anyone who’s ever played a pinball machine can attest to the fact that the player easily becomes wrapped up in it, to the point of the exclusion of all else happening around him. He hits the flippers rapidly, glancing up from time to time at his increasing score. It becomes irresistible to jiggle the table frequently, in an effort to get the ball to go where the player wants it to go.

And, of course, every player is familiar with the disappointment that comes when he’s overplayed his body English and the machine stops suddenly, lighting up a sign that says, “Tilt! Game Over.”

Much of the world is now embroiled in an economic game similar to pinball. The stakes are becoming ever greater, the flipper buttons are being pressed ever faster, and those who are desperately attempting to keep the collapsing system going are shoving the table ever more recklessly.

At this point in the world economy, the number of possible triggers that could take the system down is growing ever more rapidly.

And, for those who are paying attention, the list of dominoes that we’ll see fall is becoming ever more starkly apparent. Let’s have a look at just some of the more basic dominoes:

• Creditor countries dumping US Treasuries back into the US market. (This has already begun and will continue until the dollar crashes.)


• Cessation of the US dollar as the petrodollar. (This is about to begin, but will take several years to play out fully.)


• Economic sanctions by the US against Russia and China (that are unlikely to have the support of the US’s allies).


• Implementation of tariffs, resulting in a tariff war.


• A rise in interest rates (as was consciously created in 1929 by the Fed in order to trigger a timed crash).


• Bursting of the bond market bubble.


• A major stock market crash.


• Dramatic increase in mortgage defaults.


• A spike in commodity prices, coinciding with a drop in asset values (inflation and deflation at the same time—the worst possible combination).


• Collapse of the paper gold market.


• A switch to the new IMF cryptocurrency and a major effort to end the use of cash. (This will succeed to some extent, but will create a worldwide monetary black market.)


• US defaults on its debt. (This, too, will occur over several years.)


• Collapse of the dollar.

Many of these events will be black swans.

As can be expected, some of the events will be sudden, whilst others will take time to play out. In addition, although they’re likely to occur roughly in order, several will be in play at any given time.

Although each of these events can be anticipated, they won’t come with warning notices. Their actual occurrences will be unheralded. (As an example, when a stock market crash occurs, investors will wake up to discover that it’s occurred whilst they were sleeping.)

And, just as in pinball, the end of the game will come quite suddenly. The moment that the player will know that it’s “Game Over” will be when he goes to his ATM and finds that the screen is dark. The machine has been made inoperative overnight. Annoyed, he’ll go to the next-nearest ATM, but will find that that one, too, is shut down. He’ll go to others and, at some point, will realise that they’re all shut down.

Without spending cash in his wallet, he’ll then go to the local gas station or supermarket and attempt to pay with his credit cards but will find that they’ve all been made inactive. In trying to sort out the problem with the manager, he’ll be told that all credit cards for all his customers have been denied that day.

The realization will suddenly hit that money has ceased to flow. For how long? The television news programmes will state that it will be temporary, but they don’t define “temporary.”

Those few individuals who understood that an economic crisis was brewing will take inventory of how much cash they have remaining in their wallets and how much they’ve stashed at home, and realise that this total now represents their total purchasing power.

Overnight, wealth is no longer measured in saleable assets, since, if virtually no one has spending money, they have no means of payment. Therefore, the fellow who thought that, if he found himself in a pinch, he could always sell the Harley in the driveway, or perhaps the family boat, for some quick cash, can no longer locate a buyer who can pay him—at any price.

Of course, many people will do all they can to contact their bankers, demanding that they be allowed to remove their money on deposit and extract the contents of their safe deposit boxes, but they’ll receive a recording, saying, “We’re sorry for the inconvenience, but the bank will be temporarily closed until further notice.”

At this point, “wealth” will change its definition to include only the cash in hand, plus whatever might be bartered.

Recently, I received an email from an associate in Canada, who asked, “When will I know when I really have to make a move?” My answer was, “You won’t. But there will be an actual day when you’ll know that you’ve waited too long and it’s now too late. That day will be the day that you visit the ATM and find it closed.”

That’s it. “Game Over.”

So, are we all doomed? Well, no, not at all. Those who are proactive can remove themselves from the system now, before the system reaches the “Tilt!”

If the reader lives in one of the jurisdictions that’s likely to be the most impacted (EU, US, Canada, etc.), he would be wise to liquidate his possessions there and move the proceeds to a jurisdiction that’s less likely to be impacted and which has a long reputation for economic stability. He should place his wealth (no matter how great or little) in precious metals and real estate overseas—again, in a safer jurisdiction.

He should retain some money (in cash and precious metals) at home, or nearby—enough to cover a few months’ expenses.

If he can afford to, he should then create a bolt-hole in a jurisdiction that he can go to quickly, should the crisis overtake him.

However, even those who recognize that their home country may soon become an economic prison camp are likely to dither, failing to prepare adequately. Sadly, they’re likely to find themselves in the position of the fellow in the photo above, discovering that “Game Over” has arrived before he could ready himself.

*  *  *

This isn’t all bad news. A select group of investors will not only endure the collapse—they’ll actually come out the other side much wealthier. There are practical steps you can start taking today to make yourself one of them. Find out how in our Guide to Surviving and Thriving During an Economic Collapse. Click here to download your free PDF copy now.

Georgetown Bank Teller Steals $185,000 From Homeless Customer With Garbage Bag Full Of Cash

Where did all this money come from?

That’s probably the first question that Phelon Davis of District Heights, Maryland, asked himself when a homeless man shuffled into the Wells Fargo branch in Georgetown where Davis worked as a teller three years ago and tried to deposit a garbage bag full of cash.

His next question was probably "do you think he"d notice if some of it went missing?"

Instead of helping the customer deposit the money into his account, Davis instead decided to take advantage of the situation, setting up a fraudulent second account under the customers’ name and eventually stealing more than $185,000 from the man, according to the Washington Post.

The 29-year-old bank teller stole more than $185,000 from a homeless customer who tried to deposit a garbage bag full of cash at a Wells Fargo branch in Georgetown.

In a deal with prosecutors, Davis pleaded guilty this week to one federal felony count of interstate transportation of stolen property, which is punishable by up to 10 years in prison.

Deepening the intrigue surrounding the story, the court filings didn’t name the man, or furnish an explanation as to how he came to possess such a large sum of cash. It describes the man only as a "street vendor."

Here’s WaPo with more:

The victim was unnamed in court filings but was described as a homeless street vendor and longtime Wells Fargo customer who had more than one account that had gone dormant because of a lack of activity.

Court filings did not identify the customer or say why a homeless person would have a large amount of cash in a bag when he showed up at the M Street NW branch where Davis worked. Outside the courtroom, Davis’s attorney, Bruce Allen Johnson Jr., said he also did not know how the individual came to have the cache of cash. “That’s the million-dollar question,” Johnson said.

In plea papers, Davis acknowledged that the customer had “thousands of dollars of cash” that he wanted to deposit in October 2014, but he lacked identification. Davis told the customer where to get ID documents and a Social Security card, and also noted the customer “had a surprisingly large balance with the bank,” according to a signed, three-page statement of the crime.

Soon after the customer tried to deposit the cash, Davis fraudulently opened a new account by forging the customer’s signature, set up an ATM card, personal identification number, email address and online logon that he controlled.

He initially funded the account with $3,000 from one of the customer’s other accounts, according to WaPo.

Slowly over the next two years, Davis transferred $177,400 between the customer’s accounts, withdrew $185,440, and transported at least $5,000 withdrawn from ATMs in DC to his home in Maryland – triggering the federal charge.

The customer remained oblivious to the fraud, as he could only see the balance by checking on his account at an ATM.

Davis used the stolen money for a down payment on his home, to pay off personal debt, and fund vacations in Aruba, Jamaica, the Dominican Republic and Mexico.

As part of his plea, Davis agreed to pay back the stolen money, and Assistant US Attorney Kondi J. Kleinman said he would likely face a sentence of 18 to 30 months under federal guidelines. However, the sentencing judge has discretion to assign a longer, or shorter, sentence.  

“Did you, in fact, take money from an account as Mr. Kleinman described?” U.S. Magistrate Robin M. Meriweather asked in the Thursday plea hearing.

“Yes, ma’am, I did,” said the soft-spoken Davis.

Davis’s attorney, Johnson, said outside of court that “he greatly regrets the decisions he made and is dedicated to doing everything he can to make it right, including restitution. He is putting everything aside to repay the money and do what he can to repair what he’s done to his name, his reputation and to the victim.”

WaPo reports that a date for Davis’s sentencing hasn’t been set.
 

"What Are We Going To Do?" Puerto Rico In Chaos As Cash Runs Out

Most Puerto Ricans haven’t had access to electricity, cell service or financial services for nearly two weeks now. And as we reported yesterday, residents who didn’t stockpile enough cash have been struggling after Hurricane Maria essentially knocked the island’s economy into the 1950s, forcing some to forgo essential supplies - or worse - resort to looting. For those who do have access to working ATMs and banks, long lines have sapped cash reserves as the country has effectively reverted to a "cash only" economy.

Those whose access to cash has been limited - or cut off entirely - are becoming desperate as they start to wonder how they will begin the process of rebuilding their trashed homes - or even where their next meal will come from. As Reuters reports, cash has become just one of many scarce resources on the island (food, medical supplies and gas are also in incredibly short supply).

With electricity and internet down in Yauco, southwestern Puerto Rico, Nancy and Caesar Nieve said they could not access paychecks directly deposited into their bank accounts.

“What are we going to do when we don’t have any cash? The little cash we have, we have to save for gas,” said Nancy.

Cash demand spiked in the first few days after the hurricane as merchants were unable to accept other modes of payment. First BanCorp, one of the island’s largest banks, said that nearly two-thirds of its 48 branches remained closed, and that electronic transactions had resumed at only 25% of its ATMs.

Apparently, word of these privations made its way back to the New York Fed, which has assured the world via the Wall Street Journal that the central bank has plenty of physical cash to keep banks on the island stocked for the forseeable future - lowering the likelihood that anybody will suffer for lack of access to cash. Notably, the WSJ didn"t explain where that money was being held, how long supplies are expected to last or how it got there in the first place.  Indeed, the central bank said only that it"s "prepared to meet elevated currency demand following the natural disaster." Reuters noted that the central bank ships cash to a depot on the island, and that before the storm it increased the size of its shipments.

As WSJ explains, Puerto Rico is in the New York Fed’s district despite its location in the Caribbean. In times of economic stress or a natural disaster, Fed regional banks plan ahead to make sure area banks have enough cash.

Of course, none of this matters if you can"t get to a bank or an ATM. But at least, if they somehow manage to find an open bank branch or working ATM, Puerto Ricans can rest assured that it will be freshly stocked with cash.

But Puerto Ricans might want to hold off before thanking Bill Dudley for his foresight. It’s worth asking exactly how long the island’s cash inventories will last. After all, the storm tore up roads and leveled buildings, potentially complicating deliveries of cash. And with authorities still focusing on search-and-rescue missions and other aspects of the preliminary response, it could take for some areas of the island to return to some semblance of normalcy.  

Furthermore, looting has become increasingly common across the island, increasing the danger that deliveries of cash could be intercepted by bands of robbers.

In a statement, the New York Fed said armored-car services are able to reach banks with cash, and automated teller machines are “once again active.”

With any luck, the recovery effort will soon kick into high gear after President Donald Trump on Thursday suspended the Jones Act, which will allow more ships to assist in the international relief effort. It’s unclear why the administration hesitated to waive the law.

But is the Fed really doing all it can to alleviate the crisis in Puerto Rico? With the bankrupt island nation facing a $30 billion cleanup effort – and potentially more if it’s entire power grid needs to be upgraded – maybe the central bank could help monetize some of these expenditures.

Oh wait…
 

"Seems Like An Inside Job" - Brazen Thief Steals $2 Million From Courier Van

One lucky thief stole an ATM courier van containing $1.8 million in cash from the parking lot of a Georgia bank after two careless couriers left it running while making a routine stop. And two weeks later, federal authorities haven’t found their suspect.

Surveillance cameras at Citizens Trust Bank in the 25000 hundred block of South Harriston were able to capture a blurry image of the suspect – a man wearing dark pants and a baggy gray long-sleeve shirt with a black backpack -as he smashed the window of the van and drove off while the two couriers were inside. The drivers were gone for ten minutes - meaning the thief netted approximately $180,000 a minute, tax free.

The couriers had left the van running, but locked both doors. When they returned from their drop off, the van was gone. All they found was broken glass. Later that day, DeKalb County marshals found the van ditched in a neighborhood up the street. But the cash and suspect were missing, according to the Atlanta Journal-Constitution.

About 6:45 a.m., two ATM Response Inc. employees pulled into the bank parking lot and went inside with an unspecified amount of money.

“The driver locked the vehicle doors but left the keys in the ignition and the vehicle running,” Emmett said. The couriers were inside the bank between 10 and 15 minutes. They returned to find the van gone. All that was left was broken glass.

The ease with which the theif succeeded in pulling off the heist prompted some to question whether the thief had been tipped off by one of the couriers, according to Atlanta"s WSB-TV 2.

“I can"t believe he managed to do this,” one woman who did not identify herself told Jaquez. “Seems like an inside job."

Since Sept. 8, the day of the heist, the FBI and DeKalb County officials have been searching for the perpetrator, but have yet to stumble on any leads. Of course, it"s possible that federal agents might be able to trace the cash back to whomever spent it if it reenters the banking system.
 

Systems down all Thursday afternoon for multiple banks in Texas

Just a quick note to my ZH friends that the banking system has been down this afternoon since about 11:30am for many banks in Texas and apparently Oklahoma. 

I have confirmed this firsthand. 

For example, some banks and credit unions in Texas were giving hand-written receipts for deposits, and limiting cash withdrawals to $300!  Other banks were not making wire transfers for Friday payrolls of corporate customers.

Here is one message on a Credit Union website...

Due to an internet outage, FCCU in-store locations will be closing at
6pm today. Normal business hours will resume Friday, March 3rd. Please
use Online Banking, Mobile Banking and ATMs

I am sure it is just a glitch, but maybe grab a screen cap or print a copy of your account balances tonight.  You might also consider visiting your financial institution in the morning, and try a withdrawal, just to see what is really going on.  If that doesn"t go well, better top off the fuel tanks and raise the threat level.

Probably nothing to worry about.  Although, there do seem to be a lot of these internet outages lately.

If you are worried and looking for something to do over the weekend, consider this inventory.

http://www.zerohedge.com/news/2015-02-18/questions-assist-creating-worki...

He that panics first panics best.

US blames Russia in a false flag cyber attack in 3...2...1...