As government attempts to track every purchase to increase their power, Australia is spearheading this war on cash by outlawing any purchases in cash over $10,000.
The post War On Cash Goes into Full Effect — Purchases Over $10,000 ILLEGAL in Australia appeared first on The Free Thought Project.
Authored by Peter Koenig via The Saker blog,
The other day I was in a shopping mall looking for an ATM to get some cash. There was no ATM. A week ago, there was still a branch office of a local bank – no more, gone. A Starbucks will replace the space left empty by the bank. I asked around – there will be no more cash automats in this mall – and this pattern is repeated over and over throughout Switzerland and throughout western Europe. Cash machines gradually but ever so faster disappear, not only from shopping malls, also from street corners. Will Switzerland become the first country fully running on digital money?
This new cashless money model is progressively but brutally introduced to the Swiss and Europeans at large – as they are not told what’s really happening behind the scene. If anything, the populace is being told that paying will become much easier. You just swipe your card – and bingo. No more signatures, no more looking for cash machines – your bank account is directly charged for whatever small or large amount you are spending. And naturally and gradually a ‘small fee’ will be introduced by the banks. And you are powerless, as a cash alternative will have been wiped out.
The upwards limit of how much you may charge onto your bank account is mainly set by yourself, as long as it doesn’t exceed the banks tolerance. But the banks’ tolerance is generous. If you exceed your credit, the balance on your account quietly slides into the red and at the end of the month you pay a hefty interest; or interest on unpaid interest – and so on. And that even though interbank interest rates are at a historic low. The Swiss Central Bank’s interest to banks, for example, is even negative; one of the few central banks in the world with negative interest, others include Japan and Denmark.
When I talked recently to the manager of a Geneva bank, he said, it’s getting much worse. ‘We are already closing all bank tellers, and so are most of the other banks’. Which means staff layoffs – which of course makes it only selectively to the news. Bank employees and managers must pass an exam with the Swiss banking commission, for which they have study hundreds of extra hours within a few months to pass a test – usually planned for weekends, so as not to infringe on the banks’ business hours. You got to chances to pass. If you fail you are out, joining the ranks of the unemployed. The trend is similar throughout Europe. The manager didn’t reveal the topic and reason behind the ‘retraining’ – but it became obvious from the ensuing conversation that it had to do with the ‘cashless overtake’ of people by the banks. These are my words, but he, an insider, was as concerned as I, if not more.
Surveillance is everywhere. Now, not only our phone calls and e-mails are spied on, but our bank accounts are too. And what’s worse, with a cashless economy, our accounts are vulnerable to be invaded by the state, by thieves, by the police, by the tax authority, by any kind of authority – and, of course, by the very banks that have had your trust for all your life. Remember the ‘bail-ins’ first tested in early 2013 in Cyprus? – Bail-ins will become common practice for any bank that has abused its greed for profit and would go belly-up, if there wouldn’t be all those deposits from customers. Even shareholders are not safe. This has been quietly decided on some two years ago, both in the US and also by the non-elected white-collar mafia, the European Commission – EC.
The point is, ‘banks über alles’. And which country would be better suited to introduce ‘cashless living’ than Switzerland, the epicenter – along with Wall Street – of international banking. Bank’s will call the shots in the future, on your personal economy and that of the state. They are globalized, following the same principles of deregulation worldwide. They are in collusion with globalized corporations. They will decide whether you eat or become enslaved. They are one of the tree major weapons of the 0.1 % to beat the 99.9% into submission. The other two at the service of the master hegemon’s Full Spectrum Dominance drive, are the war- and security industry and the ever more brazen propaganda lie-machine. Banking deregulation has become another little-propagated rule of the World Trade Organization (WTO). Countries who want to join WTO, must deregulate their banking sector, prying it open for the globalized money-sharks, the Zion-controlled banking conglomerates.
Retrenchment of personnel in the banking employment market is increasing. The news only selectively reports on it, when there are large amounts of jobs being eliminated. Statistics lie everywhere, in the EU as well as in Washington. – Why scare people? They will be scared enough, when they are offered jobs at salaries on which they can barely survive. That’s happening already. It used to be a tactic applied for developing countries: Keep them enslaved by debt and low pay, so they don’t have time and energy to take to the streets to protest – they have to look for food and work, whatever menial jobs they can get, to feed their families. It’s now hitting Europe, the West in general. Some countries way more than Switzerland.
Cashless trials are going on elsewhere, especially in Nordic countries, where selected department stores and supermarkets do no longer take cash. Another monstrous trial has been carried out in India a year ago, in the last quarter of 2016, where from one day to another 80% of the most popular money notes were eliminated, and could only be exchanged for new notes by banks and through bank accounts. And this in an almost pure cash country, where half the population has no bank account, and where remote rural areas have no banks. People were lied to so that the sudden introduction had maximum effect.
It caused massive famine and thousands of people died, as they had suddenly no acceptable cash to buy food – all instigated by the USAID Project ‘Catalyst’, in connivance with the Indian rulers and central bank. It was a trial. It was a disaster. If it works in India with 1.3 billion people, two thirds of whom live in rural areas and most of them have no bank account, the scam could be applied in any developing country – see also India – Crime of the Century – Financial Genocide
What is going on in Switzerland is a trial with the high end of populations. How is the upper crust taking to such radical changes in our daily monetary routine? – So far not many protests have been noticed. There is a weak referendum being launched by a group of people who want the Swiss Central Bank be the only institution that can make money, like in the ‘olden days’. Though a very respectable idea, the referendum has no chance in today’s banking and debt-finance environment, where youth is being indoctrinated with the idea that swiping your card in front of an electronic eye is cool. Today, most money is made by private banks, like elsewhere in Europe and the US. Worldwide banking deregulation, initiated by the Clinton Administration in the 1990s – today a rule for any member of the World Trade Organization (WTO) – has made this all possible.
Digitalization and robotization is just beginning. Staffed check-out counters in supermarkets are dwindling; most of them are automatic – and that happened within the last year. – Where are the employees gone? – I asked an attendant who helped the customers through the self-checkout. ‘They joined the ranks of unemployed’, she said with a sad face, having lost several of her colleagues. ‘It will hit me too, as soon as they don’t need me anymore to show the customers on how to auto-pay.’
Digitalization also includes the cryptocurrencies, the blockchain moneys floating around – of which the most famous one is Bitcoin. It brings digitalization of money to an apex. The system is complex and seems to lend itself only to ‘experts’. Cryptocurrencies are fiat money, based on nothing, not even on gold. Cryptos are electronic, invisible and highly, but highly speculative, an invitation for gangsters and fraudsters. With extreme speculative values, it looks as if cryptocurrencies were designed for crooks and speculators.
Bitcoin was allegedly invented by Satoshi Nakamoto which could be a pseudonym of a man or a group of people, suspected to live in the US. “Nakamoto’s” identity is believed to be commonwealth origin, due to the vocabulary used in his writings. One of his close associates is purportedly a Swiss coder, who is also an active member of the cryptocurrency community. He is said to have graphed the time stamp of each of Nakamoto’s more than 500 bitcoin forum posts. Such ‘forum posts’ exist in the thousands, worldwide. They form an elaborate network based on algorithms.
Bitcoin was formally created in January 2009 with a fix amount of 21 million ‘coins’, of which more than half are already in circulation, and 1 million, or about 4.75% (of the total) can be traced to Nakamoto – which according to the current market value corresponds to close to US$15 billion. Today’s overall Bitcoin market cap is more than US$ 315 billion. The market is highly volatile. Drastic daily fluctuations are common, especially within the last 12 months. If one of the major Bitcoin holders, like Nakamoto, would capitalize his profit by selling a big portion of his holdings, the Bitcoin price would be in free fall, functioning pretty similar to the regular stock exchange.
On 24 August 2010, when Bitcoin was first traded, its value was US$ 0.06. On 24 December 2017, the coin was worth US$ 13,800, an increase of 230,000%. In the last twelve months, its value increased from about US$ 800 in December 2016 to a peak of close to US$ 20,000 in December 2017, an increase of nearly 2,500 %. However, in the last 7 days, the price has dropped by US$ 5,160, i.e. by more than 27%, and the trend seems to be downward; perhaps a sign of quick profit-taking? However, this shows how instable this cryptocurrency is, apparently much more so than trading corporate shares on the stock market.
The number of cryptocurrencies available over the internet as of 27 November 2017 is above 1300 and growing. A new cryptocurrency can be created at any time and by anyone. By market capitalization, Bitcoin is presently the largest blockchain network (database network, storing data in different publicly verifiable places), followed by Ethereum, Bitcoin Cash, Ripple and Litecoin.
Bitcoin may be the next bubble, bringing down a parallel economy which has already its fingers clawing into our regular western economy. Cryptocurrencies are officially forbidden in Russia and China, though stopping cryptocurrency dealings by individuals is hardly possible. They do not touch the traditional banking system. That’s why major banks hate them. They circumvent the banking suckers, prevent them from making ever higher profits from horrendous commissions, against which the people at large are powerless.
Here is Bitcoin’s positive value. It escapes bank and state controls. If countries’ economies were run on Bitcoins or another cryptocurrency, they would escape US sanctions which function only because western currencies are foster-children of the US-dollar, hence, subject to the dollar hegemony; meaning all international transactions have to pass through a US bank. A typical case is ‘banking blockades’, when Washington decides to stop all international transactions of a country until it submits to the wishes of the empire. It is blackmail; totally illegal, but unless there is a monetary alternative, the (western) world is subject to this system.
A typical case was Argentina, when she was forced by a New York judge in June 2014 to pay a New York based Vulture Fund US$1.6 billion, an illegal ruling according to a UN resolution. Argentina refuse to pay, so the judge, interfering in a sovereign nation, blocked more than US$ 500 million in Argentina’s debt payment to creditors, bringing Argentina to the brink of a second bankruptcy in 13 years. Eventually, neoliberal Macri negotiated a deal with the Vultures of a payment in excess of US$ 400 million.
This US blackmail would not have been possible had Argentina been able to make its foreign transactions in Bitcoins or another cryptocurrency. Venezuela is currently using a national cryptocurrency for some of its foreign transactions, thereby escaping the sanctions stranglehold of Washington. Had Greek and Cyprus citizens had a cryptocurrency alternative to the euro, they would not have been subject to the cash control imposed by the European Central Bank.
On the other hand, funding of terror organizations, like ISIS, cannot be disrupted, if the terror group deals in cryptocurrencies. – This shows, for good or for bad, Bitcoins, or cryptocurrencies are for now unique in resisiting censure and blackmail, or any kind of authoritarian outside interference in electronic money transactions.
If Switzerland accepts the change to digital money, a country where until relatively recently most people went to pay their monthly bills in cash to the nearest post office – then we, in the western world, are on a fast track to total enslavement by the financial institutions. It goes, of course, hand-in-hand with the rest of systematic and ever faster advancing oppression and robotization of the 99.9% by the 0.1%.
We are currently at cross-roads, where we still can either decide to follow the discourse of a new electronic monetary era, with ever less to say about the product of our work, our money; or whether, We the People, will resist a banking / finance system that has full control over our financial resources, and which can literally starve us into submission or death, if we don’t behave. In order to resist we need an alternative monetary system or monetary network, away from the dollar-euro hegemony.
All the more important is the ascent of another economy, another payment and transfer scheme which already exists in the East, the Chinese International Paymen, totally System (CIPS), effectively a replacement of SWIFT, totally privately run and linked to the US-dollar and US banks. The world needs a multipolar economy, based on the real output of a country or society, as is the case in China and Russia, not one based on fiat money as is the current western economy.
Will Switzerland, the stronghold of world finance, along with New York, London and Hongkong, resist the temptation of increased profit, power and control, offered by digital money? – We, the People, have still the chance to decide either for continuing rotting in a fraud economy, based on wars and greed – for which digital money, exacerbated by cryptocurrencies, is a new tool for a new maximizing profit bonanza on the back of the common people; or do we opt for an honest future and for a life that leaves us free to take sovereign political and monetary decisions in a full cash society. For the latter we must wake up to see the propaganda fraud going on before our eyes, and to resist the robot and electronic money onslaught being unleashed on us.
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.
The promoters of crypto currencies have gushingly touted them as the mechanism by which the present central banking cabal and the system of nation states which derive much of their power from will be brought down and replaced by digital money.
Despite their meteoric rise as speculative “assets,” there are fundamental economic reasons why they will never act as a general medium of exchange despite the wild enthusiasm for them by the crypto-currency cultists.
Money – a general medium of exchange – is the most marketable (exchangeable) commodity in an economy. As a good, money is not sought after for its direct use – to satisfy individual wants – but to satisfy wants indirectly through exchange for other goods. Over time, one good becomes money since it possesses qualities superior to all other goods as a money. When gold became demanded not for its “use value,” but for its “exchange value,” it became a general medium of exchange – money.
As a consumer good, gold possessed a value or a “price” prior to it becoming a money, as the eminent monetary theorist Murray Rothbard explains:
...embedded in the demand for money is knowledge of the money-prices of the immediate past; in contrast to directly-used consumers’ or producers’ goods, money must have pre-existing prices on which to ground a demand.
But the only way this can happen is by beginning with a useful commodity under barter, and then adding demand for a medium to the previous demand for direct use (e.g., for ornaments in the case of gold.)*
Thus, Bitcoin’s “price” is not in terms of its original commodity price, but its price is in terms of dollars, Euros, yuan, etc. In the dollar’s case, it was at one time linked to gold, but has since been severed from it while Bitcoin has had no such relationship.
Once money is established, then prices are expressed in terms of it and thus economic calculation can rationally take place and the division of labor and specialization can be expanded. Rothbard continues:
The establishment of money conveys another great benefit. Since all exchanges are made in money, all the exchange-ratios are expressed in money, and so people can now compare the market worth of each good to that of every other good.**
Once gold became money, the price of goods became expressed in gold not in other elements – nickel, zinc, lead, etc. With the proliferation of crypto currencies, there will be a myriad of different price ratios for each good. There will be a Bitcoin price for a car, an Ethereum price for a car, a Dogecoin price of a car, and so on. This is the antithesis of the purpose of money – one unit of account that reflect prices for all commodities as Rothbard shows:
Because gold is a general medium it is most marketable, it can be stored to serve as a medium in the future as well as the present, and all prices are expressed in its terms.
Because gold is a commodity medium for all exchanges, it can serve as a unit of account for present, and expected future, prices. It is important to realize that money cannot be an abstract unit of account or claim, except insofar as it serves as a medium of exchange.*** [my emphasis]
Crypto currencies, therefore, directly violate one of the main principles of monetary theory. The vast array of digital money, all with unique price ratios (to say the least of their volatility), would make economic calculation and rational planning next to impossible. In this sense, the current world of fiat dollars would be preferable to a Tower of Monetary Babel that digital currencies would create.
Central banks and governments do not fear crypto currency challengers to their monetary hegemony. They, of course, jealously monitor the crypto market worried that any gains accrued may not be subject to tax. Central banksters do fear gold for it remains, despite being demonetized, the last check on profligate central bank monetary expansion. And, because countries who wisely understand gold’s importance and seek to get out from under the yoke of King Dollar (most notably China and Russia), continue to voraciously accumulate the yellow metal.
The return of true prosperity will only come about when gold is once again at the center of the monetary order and fiat currencies such as the dollar, Euro, and now Bitcoin are forgettable memories of a misguided and corrupt age.
In July, Visa officially entered the global "war on cash", adding to a long list of academics, elites, and bankers urging the removal of one of the last freedoms "for the good of the rest of us". However, if Alderman Edward Burke has his way, that "war on cash" will end in Chicago after he submitted an ordinance at last week"s City Council meeting to ban businesses from banning cash.
According to the ordinance, "credit card giant Visa announced it is "launching a major effort to encourage businesses to go cashless," through a campaign called the Visa Cashless Challenge offering $500,000 for 50 businesses to go cash-free.
As DNAInfo.com reports, the ordinance cites Argo Tea, SweetGreen, Epic Burger and Goddess and the Baker as Chicago businesses that have already gone cashless, but the stores themselves don"t seem to have had any issues...
Xuan Tea, a shop at 1816 N. Milwaukee Ave. in Bucktown, opened in September and is credit card-only.
"It"s been working out fine. Some are taken aback initially, but we haven"t had any problems with it," manager Will Quanstrom said.
"Mostly everyone has a credit card in their pocket, even if they"re just out for a jog. It"s easier and it"s simpler for us. We don"t have to go to the bank, or count drawers out." The tea shop has a sign at the front counter that says it only takes credit cards.
Nevertheless, as DNAInfo.com notes, the ordinance, however, points out that credit card companies typically tack on a 1 percent to 3 percent fee on transactions, "a business cost typically passed on to consumers via increased pricing."
Burke called his ordinance a "fair and equal access" issue and calls out Visa"s repression of the poor and young...
"A "no cash" sign is a "not welcome" sign for many without ready access to credit, including those who are low- or fixed-income, homeless, undocumented, young or victims of identity theft," he said.
It adds that those under 18 can"t apply for credit cards, making a cash ban "de facto age discrimination," while many low-income families can"t even afford to open a bank account.
The ordinance would make it illegal to decline cash as payment at any business in retail sales or food and drink, under the penalty of fines starting at $1,000 and up to $2,500 a day.
* * *
As we noted previously, this ongoing push for a cashless society in Europe, Asia, and the Americas is about much more than just phasing out paper money - it’s about central planners solidifying control over the public’s wealth. This ongoing merger of corporate and government interests is the definition of crony capitalism. Regardless of the blatant collusion, the choices individuals make will still ultimately decide the direction for the future. Buying material goods on credit has become a lifestyle for millions, but the long-term costs of those decisions must be understood if there’s any chance for progress.
Americans have made a huge mistake by running up a staggering $1 trillion dollars in credit card debt with an average interest rate of over 16%. Thanks to the Federal Reserve system, companies like Mastercard, Discover, and American Express can issue bonds paying extremely low-interest rates to the investors while simultaneously lending that money out to credit card holders at sky high rates. Companies will always take advantage of opportunities to increase profits, but the people’s willingness to keep borrowing from them is at the core of the problem.
Access to cheap capital has been extended to the largest corporations for over a decade, but when it comes to small businesses or individuals there is a completely different set of standards. The pressure to consistently increase revenues and stock prices has led to an unnatural parasitic relationship between these companies and their customers. Cash is one of the last options that allows people a way to avoid dealing with this kind of shakedown.
More than 30% of all payments in the U.S. are still conducted in cash, but financial intermediaries that charge processing fees are joining with the State and central banks to ensure the public has no room to innovate.
In a story that seems to have gone largely unnoticed by the western press, the China Daily reported that the PBoC has successfully designed a prototype that can regulate its future supply of digital fiat currency.
In a report, “PBoC inches closer to digital currency”, the newspaper stated that China’s central bank “has completed trial runs on the algorithms needed for digital currency supply, taking it a step closer to addressing the technological challenges associated with digital currencies, according to a top official associated with the project.”
China’s has been preparing for digital currency since 2016. In June this year, the PBoC “finished several digital money trials involving fake transactions between it and some of the country’s commercial banks.” Given over-invoicing of imports and the shenanigans in the shadow banking/WMP sector, we suspect that the commercial banks took to these trials like proverbial flies to feces.
The China Daily article goes on to suggest that, while there is no timetable, “China is likely to become the first country that would deploy a digital fiat currency.”
Far be it for us to question the accuracy of the China Daily – which Wikipedia notes is often used as a guide to Chinese government policy – but we were expecting Sweden (already the world’s most cashless society) to be first. It has been widely reported that the introduction of an “e-krona” is being investigated by the Riksbank. Forbes noted last month that “The inquiry is expected to be finalized in late 2019.” It would not replace cash, which accounts for 1% of transactions in Sweden according to a recent BBC report, but operate alongside physical cash initially.
So…while China expects to be first, it will be “some time before the currency goes public”. According to Di Gang, a senior engineer of the Institute of Digital Money at the PBOC, a number of concerns need to be solved like “managing risks and improving efficiency.” He added that “the government also needs to factor whether the public would use the currency.”
We know the answer to that.
Yes, although it would be much quicker if Chinese citizens could somehow use it to get their savings out of the country.
Back to the serious work of the PBoC’s Institute of Digital Money. Yao Qian, the director-general no less, said that the successful simulation of money supply had paved the way for the central bank to become the future sole regulator and policymaker governing the value of digital currency. That sounded like a veiled explanation for the recent heavy-handed clampdown on Bitcoin trading in the Middle Kingdom. Indeed, the story notes that “Unlike Bitcoin or other digital money issued by the private sector, the digital fiat currency has the same legal status as the Chinese yuan”
As this will be a government-backed digital currency, we wonder whether Jamie Dimon will be an investor or early adopter? Alternatively, he might be able to buy a Russian version in due course.
Yesterday, Cointelegraph reported that local news sources in Russia had been informed by the Minister of Communications, Nikolay Nikiforov, that President Putin has approved a plan for the issue of a “CrypoRuble.” There was no detail, however, on timeline and no any subsequent confirmation that we’ve seen. Coincidentally, or not, Nikiforov is quoted as saying “I confidently declare that we run (sic) CryptoRuble for one simple reason: if we do not, then after 2 months our neighbors in the EurAsEC will.”
So, the world might be moving towards digital, sovereign-backed currencies faster than many people realized. For the time being, however, Bitcoin and its private sector rivals continue to have the playing field to themselves.
Portfolio managers who want exposure to the cryptos either remain on the sidelines or, as Cathie Wood, CEO, CIO and Founder, of Ark Investment Management, said on Bloomberg TV earlier, are forced to pay a premium via the GBTC (Bitcoin Investment Trust).
Wood commented that “We are a registered investment company, Ark Invest, we can only own financial securities…our funds own GBTC which sells at a premium to the underlying bitcoin investment trusts…the premium is because of the scarcity value. In my IRA, for example, I can’t get any to crypto, except through a GBTC. No one can and the same with our funds…We’ve tried to buy the underlying, but the New York Stock Exchange preferred a traded security and that’s how we ended up with a GBTC.”
As the Bloomberg guests went on to discuss, the situation may not change unless and until Bitcoin futures are approved by the CFTC, perhaps in early/mid-2018. That could pave the way for the currently stalled approvals for ETFs with the SEC and bring additional institutional capital into crypto.
Puerto Rico without electricity, wifi, ATMs shows importance of cash, gold and silver
- Most of Puerto Rico remains in the dark and without power three weeks after storm
- With widespread power failures, Puerto Rico remains cash only with retailers only accepting cash and few consumer having cash
- Shortages of food, fuel and medicine with infrastructure repairs delayed
- Power could be "out for months" as 85% of people remain off the grid
- Around 75% of ATMs disconnected
- Electronic forms of payment including bitcoin have been rendered non viable
- Puerto Rico"s accidental "cashless society" shows risks of cashless society and importance of holding cash, gold and silver out of the financial and digital systems
Editor: Mark O"Byrne
Aerial photo of flooding in Puerto Rico. Washington Post
Puerto Rico has been destroyed by two savage hurricanes which have plunged the island into darkness and despair. The landscape of ruined homes and entire towns resembles Hiroshima after the man made disaster of a nuclear bomb being dropped on the city.
More than three weeks since Hurricane Maria hit the island, 3.7 million American citizens are on the precipice of a humanitarian disaster. The majority of these people are desperate for food, water, electricity and shelter. They are desperate for cash that will allow them to secure these basic necessities.
Over 84% of the island remains without power and 37% of people are without access to water. Without power, much of the population is does not have electricity to charge their phones and iphones. Very few have wifi and this is severely impacting their ability to communicate and conduct their lives.
Inevitably, the future of Puerto Rico now lies in the wrangling hands of government and financial organisations, all of which seem to be pointing the finger of blame at one another.
The territory"s government expects to run out of cash by the end of the month. It has asked Congress for an immediate payment of $6 billion to $8 billion. This is to meet vital expenses including salaries, emergency repairs, and pension payments.
"We will run out of cash as of Oct. 31 of this year," said Raul Maldonado, the territory"s treasury secretary. "As of November, we will not be able to operate as a normal government."
Given the country"s dire electronic and communications situation, tax receipts are way down which will likely exacerbate the dire economic situation even further.
Problems are not just at a government level. Day-to-day life for Puerto Ricans is also obviously extremely hard and increasingly dangerous. The island is in a cash black-hole with little access to or means to buy essentials.
Not only is there a shortage of cash but the majority of ATMs are down. Even if cash was aplenty, few people are able to withdraw pay checks or access their digital savings and make payments electronically.
It is a stark reminder of how reliant our economies and day-to-day lives are on electricity. It is a stark reminder of how dependent our modern digital currencies - whether they be public fiat or private crypto currencies - are on increasingly antiquated electricity and power infrastructures.
Today the faith we put in governments that basic utilities will continue regardless is unprecedented. Citizens in Western nations rarely (if ever) question how they would manage if they had no access to electronic money or bank accounts and could make digital payments online or by credit and debit cards.
Puerto Rico should be a warning to us all. No matter how wealthy your country, how "sophisticated" your central bankers and central banking system and how technologically advanced your infrastructure, we can all be rendered poor overnight by the power of Mother Nature.
"You"re broke even if you have money"
"Cash Only" is reportedly a common phrase across many of the retailers on the territory. The majority of gas stations and grocery stores are only accepting cash payments. Citizens have little choice but to try and find cash.
However, shoppers have the same problem retailers do - they can"t get the cash they need. Reports the New York Times:
Fewer than half of Puerto Rico’s bank branches and cash machines are up and running, still crippled by diesel shortages, damaged roads and severed communications lines. Bank officials say they are struggling even to find employees who can get to work when there is no public transportation and gasoline is hard to find.
Across the island, people who have spent their last dollars on an $8 bag of ice or $15 for gasoline are waiting for hours outside banks and A.T.M.s in hopes of withdrawing as much money as possible.
“You’re broke even if you have money,” Mr. Jimenez told the New York Times.
But is there really a cash shortage? Zoime Alvarez, vice president of the Association of Banks of Puerto Rico told the New York Times that not only was there already enough cash on Puerto Rico but there was more arriving to meet what the New York Federal Reserve called “extraordinarily high demand.”
Does this matter though when there is electricity failure across the island? This isn"t the only problem - transport networks are down and organisations are struggling to deliver goods and services.
The infrastructure issues are unlikely to be fixed soon.
Already in a bad way
It"s no secret that prior to Hurricane Maria, Puerto Rico was already in a poor financial state. Private creditors were circling looking for the $74 billion that has been lent to the island in recent years. Now the cash situation is set to get even worse.
A federal government bill is set to increase the island"s liabilities by a further 14%.
In addition to the country"s $74 billion in bond debt, there is also a further $49 billion in pension obligations.
With this sorts of liabilities its unlikely creditors are going to put much faith in the future of the island. Whilst Congress is likely to agree some funding, it will not help the territory with its long-term finance issues.
This will no doubt exacerbate increasing unemployment numbers and criminal activity.
Cash and electricity shortages are forcing some residents into a bartering and others into borderline criminal activities as they seek out ways to find more cash.
Mr. Jimenez, who waited in line outside Scotiabank, said the cash shortage forced him to get creative and tiptoe into the black market. Here in his eastern hometown, Fajardo, he was able to use his credit card to buy several packs of Newport cigarettes from a big-box retailer before the store ran out of diesel and had to shut down.
He and his wife traversed their neighborhood, selling packs of cigarettes for $10 each. Mr. Jimenez said he was not trying to make money — just to stockpile cash to use at the gas stations and markets that now accepted nothing else.
“I’m like a drug dealer,” he joked.
Prior to the hurricane residents were warned to stock up on all essentials, but few could have realised just how important cash would become.
Few people appreciate this. In times of disaster like this, cash becomes king. Followed closely by gold and silver which can be traded for cash or used as deposits or for payment for life"s necessities.
Most shopkeepers who are struggling to sell their merchandise as they cannot take electronic payments and whose potential customers do not have cash will gladly accept small gold and silver coins and bars as payment in lieu of cash.
Coin dealers, jewellers who buy from the public and pawnbrokers in Puerto Rico have been very busy since the crisis as people exchange gold and silver jewellery and bullion coins and bars for cash.
Ironically, less and less governments want us to have access to cash, let alone to gold and silver, and this is making us more fragile financially.
Our economies are more vulnerable than ever in this regard and the modern drive to embrace all forms of digital currencies and the cashless society is setting ourselves up for an even bigger fall.
No cash transactions means no transactions
The Puerto Rico problem will only get worse. Not only are ATM and banking networks down but employers and government cannot make payments they need to make to individuals" accounts.
In the long-term this is a problem likely to be faced by many nations that rely solely on electronic systems for all payments.
We have previously discussed the push by governments and banks to a cashless society. In the United Kingdom, 89% of the total value of consumer payments are non-cash payments. In Canada, it"s 90%.
Disasters such as Puerto Rico do not appear to be considered by banks and governments who claim cashless societies are better for all. Reasons for going cashless include clamping down on tax evasion, illegal cash activities and increased spending.
However, when an electricity and overall infrastructure crisis hits (as we see in Puerto Rico) the "convenience" of a cashless society quickly falls flat on its face.
This is also the situation for anyone who was hoping bitcoin (or "insert another cryptocurrency") might be the answer when banking systems can"t operate. However bitcoin transactions require electricity, a lot of it, and wifi. As with cashless fiat transactions they are as problematic when there is no power.
This is why in times of such crisis there is such demand for not only hard cold cash but also for gold and silver. None of them can suddenly become inaccessible thanks to power shortages or the inability of a government to sort out local infrastructure.
Too late for cash?
For now the Puerto Ricans are "fortunate" that their currency is the U.S. Dollar. This means the value of the cash in their accounts is unlikely to be majorly affected by Hurricane Maria and the resulting crisis.
But if Puerto Rico were an independent nation then it would almost certainly be experiencing a fall in its currency. At this point all of the goods and services it needed to import in order to help it to recover would be increasingly expensive - as seen in the UK after Brexit.
Meanwhile gold and silver would be accepted as they are borderless currencies that do not operate within the confines of a government, central bank or electronic system.
Gold and silver often get a bad rap when it comes to discussions about their role as money. Both are pushed to the bottom of the pile when you consider the convenience of spending them compared to the likes of electronic cash, paper notes and bitcoin.
But one thing that is guaranteed with them is that you know you can use them in times of crisis. They are highly durable and highly desired. That is not the case with fiat or bitcoin when it comes to the crunch as seen in Puerto Rico in recent days.
No matter the town, city or country you find yourself in, times such as these pose multiple threats whether military or natural.
We all assume that governments are competent and will look after us. We cannot bring ourselves to imagine electricity systems and our banking systems including ATMs going down and not having access to our hard earned savings.
But it happens, all too many times as this last hurricane season has demonstrated. Prudent savers who like to be prepared should consider the magnitude of disasters such as Hurricane Maria - food runs out and electricity goes down.
You think you are wealthy and then suddenly, you have nothing.
You need cash and means of exchange in order to survive.
Diversifying your emergency funds should be a priority, this means hold some cash and gold and silver coins and bars to ensure you can survive and thrive with or without government"s help.
Best to hope for the best but be prepared for less benign scenarios.
The people of Puerto Rico would attest to the power of this today.
News and Commentary
Gold rally pauses ahead of U.S. inflation data (Reuters.com)
Dollar Snaps Four-Week Rally as Stocks Consolidate (Bloomberg.com)
Inflation weighs on yields, dollar; stocks lackluster (Reuters.com)
U.S. producer prices increase; weekly jobless claims fall (Reuters.com)
Bitcoin Breaches New Milestone by Smashing Past $5,000 Mark (Bloomberg.com)
Five things to do when every investment is too expensive (MarketWatch.com)
Stocks will beat houses over the next few years – Frisby (MoneyWeek.com)
Three ways that China’s big political congress matters to investors (StansBerryChurcHouse.com)
Bob Corker Is Just the Beginning of Trump’s Tax-Cut Problems (Bloomberg.com)
Yellowstone Supervolcano’s Nasty Surprise: Only Decades To Prepare For An Eruption (Forbes.com)
Central banks hedging against geopolitical risk with gold (Nikkei.com)
Gold Prices (LBMA AM)
13 Oct: USD 1,293.90, GBP 972.88 & EUR 1,093.73 per ounce
12 Oct: USD 1,294.45, GBP 977.96 & EUR 1,092.26 per ounce
11 Oct: USD 1,290.20, GBP 978.62 & EUR 1,091.90 per ounce
10 Oct: USD 1,289.60, GBP 977.77 & EUR 1,094.61 per ounce
09 Oct: USD 1,282.15, GBP 976.23 & EUR 1,092.01 per ounce
06 Oct: USD 1,268.20, GBP 970.43 & EUR 1,083.93 per ounce
05 Oct: USD 1,278.40, GBP 969.28 & EUR 1,086.51 per ounce
Silver Prices (LBMA)
13 Oct: USD 17.20, GBP 12.94 & EUR 14.55 per ounce
12 Oct: USD 17.20, GBP 13.06 & EUR 14.50 per ounce
11 Oct: USD 17.15, GBP 13.00 & EUR 14.51 per ounce
10 Oct: USD 17.12, GBP 12.98 & EUR 14.53 per ounce
09 Oct: USD 16.92, GBP 12.86 & EUR 14.41 per ounce
06 Oct: USD 16.63, GBP 12.73 & EUR 14.20 per ounce
05 Oct: USD 16.66, GBP 12.64 & EUR 14.19 per ounce
Recent Market Updates
– Global Outlook – Mad, Mad, Mad, MAD World: News in Charts
– Young Guns of Gold Podcast – ‘The Everything Bubble’
– London House Prices Are Falling – Time to Buckle Up
– Perth Mint Gold Coins Sales Double In September
– Survey shows UK and US Pensions Crisis is Imminent
– Gold Investment In Germany Surges – Now World’s Largest Gold Buyers
– Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold
– Safe Haven Silver To Outperform Gold In Q4 And In 2018
– Plan For Run On The Pound
– Russia Gold Rush Sees Record Reserves For Putin Era
– China Catalyst To Send Gold Over $10,000 Per Ounce?
– Gold Matches S&P 500 Performance In First 3 Quarters; Up 12% 2017 YTD
– Gold Standard Resulted In “Fewer Catastrophes” – FT
Important Guides
For your perusal, below are our most popular guides in 2017:
Essential Guide To Storing Gold In Switzerland
Essential Guide To Storing Gold In Singapore
Essential Guide to Tax Free Gold Sovereigns (UK)
Please share our research with family, friends and colleagues who you think would benefit from being informed by it.
Regulators in the US, Europe and Asia who’ve sought to crack down on bitcoin – many of these regulators are also proponents of a “cashless society” – have been dealt a stunning setback by an unlikely defender of the pioneering digital currency: The US Department of Homeland Security.
To wit, one anonymous DHS source told CNBC that bitcoin has become “a lot more legitimate” than many believe.
"We"re getting a lot better through law enforcement tracking those [criminals] and holding the exchanges more accountable," the Homeland Security official said. "I think [bitcoin]"s a lot more legitimate than people give it credit for."
Another source told CNBC that criminals have backed away from using the digital currency as bitcoin transactions have become much easier for authorities to trace. Earlier this month, the IRS announced that it had developed, with the help of bitcoin security firm Chainalysis, a tool to unmask the owners of bitcoin wallets.
“Although hard numbers on criminal activity in digital currencies are difficult to pin down, Shone Anstey, co-founder and president of Blockchain Intelligence Group, estimates that illegal transactions in bitcoin have fallen from about half of total volume to about 20 percent last year.
"Now it"s significantly less than that," he told CNBC earlier this month, noting that overall transaction volume has grown globally.”
Bitcoin is vulnerable to law enforcement because each user must display a public ID, a complex cryptographic combination of numbers and letters, in order to tansact in bitcoin. By tracing the movement of coins between accounts, CNBC explains, intelligence and security agencies can follow the money and arrest the criminals when they try to withdraw their ill-gotten games in US dollars, or another fiat currency.
Last month, US authorities partnering with Interpol and local law enforcement shut down AlphaBay and Hansa, two of the largest dark-web marketplaces for drugs and illegal goods. Before that, they took down BTC-E, a shadowy digital-currency exchange, arrested its Russian-born founder and seized the company’s website.
Another cybersecurity expert who spoke with CNBC noted that, when a user tries to convert bitcoin into cash, the digital-currency’s veneer of anonymity disappears.
"Bitcoin basically introduced a situation where we could bypass the money mules," said Rickey Gevers, cybercrime specialist at RedSocks Security, which detects and fights against malware.
But, Gevers said, "in the beginning [bitcoin] looks very anonymous, and in the end it doesn"t look very anonymous."
Paul Triolo, a consultant at Eurasia Group, said bitcoin has “changed quite a bit” since it was first launched in early 2009. It’s now primarily used by legitimate investors, not dark-web criminals.
"The whole use issue of digital currencies has become a big industry. Bitcoin isn"t this weird, odd currency that"s being used on the dark web," said Paul Triolo, practice head of geotechnology at consulting firm Eurasia Group.
"Since the early days of bitcoin on some [levels], the world has changed quite a bit."
Instead of bitcoin, the DHS told CNBC it’s focusing on other cryptocurrencies like Ethereum and Monero. For those who are unfamiliar with the latter, it’s one of a handful of digital currencies featuring enhanced privacy controls. For example, Monero scrambles a user’s public ID, making it more difficult for authorities to trace transactions.
Even the European Union admitted that bitcoin was never popular with organized crime groups, which overwhelmingly prefer payment in large-denomination bills like the 500-euro note, production of which has been discontinued by the ECB, part of the European elites" war on cash.
Still, global authorities remain skeptical. Earlier this week, Russia signaled an about-face when the country’s deputy finance minister told local media that the ministry of finance and central bank were seeking to “regulate” digital currencies by forcing users to execute trades on the country’s public stock exchange, allowing the government to monitor transactions.
In the US, the SEC decreed last month that digital currencies are financial securities that must be registered with the agency. However, the ultimate significance of the agency"s ruling remains unclear.
Authored by James Rickards via The Daily Reckoning,
Visa recently unveiled its own offensive in the war on cash. Visa is offering certain merchants a $10,000 reward if they refuse to accept cash in the future.
Not surprisingly, Visa’s competitor is also part of the war on cash. Mastercard is increasing its efforts to encourage merchants to refuse cash. Here’s Bloomberg, quoting the CEO of Mastercard:
“Mastercard Chief Executive Officer Ajay Banga has been one of the most ardent supporters of ditching paper currency in the U.S. The 57-year-old first declared his war on cash in 2010.”
These private efforts by Visa and MasterCard exist side by side with official efforts to eliminate or discourage the use of cash coming from governments in India, Australia, Sweden as well as the United States.
These efforts are always portrayed in the most favorable light. Private parties talk about convenience and lower costs. Governments talk about putting pressure on tax cheats, terrorists and criminals.
Governments always use money laundering, drug dealing and terrorism as an excuse to keep tabs on honest citizens and deprive them of the ability to use money alternatives such as physical cash and gold.
But the so-called “cashless society” is just a Trojan horse for a system in which all financial wealth is electronic and represented digitally in the records of a small number of megabanks and asset managers.
Once that is achieved, it will be easy for state power to seize and freeze the wealth, or subject it to constant surveillance, taxation and other forms of digital confiscation.
The war on cash has two main thrusts.
The first is to make it difficult to obtain cash in the first place. U.S. banks will report anyone taking more than $3,000 in cash as engaging in a “suspicious activity” using Treasury Form SAR (Suspicious Activity Report).
The second thrust is to eliminate large-denomination banknotes. The U.S. got rid of its $500 note in 1969, and the $100 note has lost 85% of its purchasing power since then. With a little more inflation, the $100 bill will be reduced to chump change.
Last year the European Central Bank announced that they were discontinuing the production of new 500 euro notes. Existing 500 euro notes will still be legal tender, but new ones will not be produced.
This means that over time, the notes will be in short supply and individuals in need of large denominations may actually bid up the price above face value paying, say, 502 euros in smaller bills for a 500 euro note. The 2 euro premium in this example is like a negative interest rate on cash.
The real burden of the war on cash falls on honest citizens who are made vulnerable to wealth confiscation through negative interest rates, loss of privacy, account freezes and limits on cash withdrawals or transfers.
The whole idea of the war on cash is to force savers into digital bank accounts so their money can be taken from them in the form of negative interest rates. An easy solution to this is to go to physical cash.
The war on cash is a global effort being waged on many fronts. My view is that the war on cash is dangerous in terms of lost privacy and the risk of government confiscation of wealth. India provides the most dramatic example.
How would you like to go to bed one night and then wake up the next morning to discover that all bills larger than $5.00 were no longer legal tender? That’s essentially what happened in India not long ago.
The good news is that cash is still a dominant form of payment in many countries including the U.S. The problem is that as digital payments grow and the use of cash diminishes, a “tipping point” is reached where suddenly it makes no sense to continue using cash because of the expense and logistics involved.
Once cash usage shrinks to a certain point, economies of scale are lost and usage can go to zero almost overnight. Remember how music CDs disappeared suddenly once MP3 and streaming formats became popular?
That’s how fast cash can disappear.
Once the war on cash gains that kind of momentum, it will be practically impossible to stop. That’s why I’m always saying that savers and those with a long-term view should get physical gold now while prices are still attractive and while they still can.
Given these potential outcomes, one might expect that citizens would push back against the war on cash.
But in some places, the opposite seems to be happening.
A recent survey revealed that more than a third of Americans and Europeans would have no problem at all giving up cash and going completely digital.
Specifically, the study showed 34% of Europeans and 38% of Americans surveyed would prefer going cashless.
Notably, Germans are the most resistant to going cashless. Almost 80% of transactions in Germany are done in cash, and many Germans never use credit cards.
The German experience with hyperinflation after WWI and additional monetary chaos after WWII certainly plays a part in this resistance to the cashless society.
Incidentally, the German word for debt, schuld, also means guilt.
Other countries, such as Romania and Bulgaria, which have recent experiences with currency and financial crises, also tend to use cash extensively.
Of course, there’s no denying that digital payments are certainly convenient. I use them myself in the form of credit and debit cards, wire transfers, automatic deposits and bill payments.
The surest way to lull someone into complacency is to offer a “convenience” that quickly becomes habit and impossible to do without.
The convenience factor is becoming more prevalent, and consumers are moving from cash to digital payments just as they moved from gold and silver coins to paper money a hundred years ago.
But when the next financial panic comes, those without tangible wealth will be totally at the mercy of banks and governments who will decide exactly how much of your own money you’re allowed to have each day.
Just ask the citizens of Cyprus, Greece and India who have gone through this experience in recent years.
It will come to the U.S. soon enough.
Other dangers arise from the fact that digital money, transferred by credit or debit cards or other electronic payments systems, are completely dependent on the power grid. If the power grid goes out due to storms, accidents, sabotage or cyberattacks, our digital economy will grind to a complete halt.
That’s why it’s a good idea to keep some of your liquidity in paper cash (while you can) and gold or silver coins. The gold and silver coins in particular will be money good in every state of the world.
I hold significant portion of my wealth in nondigital form, including real estate, fine art and precious metals in safe, nonbank storage.
I strongly suggest you do the same.
Now that Trump"s "Russian collusion" ties, and various assorted Congressional hearings on the topic have quietly moved away from the front pages, there is a new hot topic in the Hill, and as Reuters reports, the Homeland Security Committee of the House of Representatives will hold a hearing next month "about threats from extremist groups, including domestic terrorism", following a violent white supremacist rally in Charlottesville, Virginia, last weekend.
In a letter to the panel"s top Democrat, Representative Bennie Thompson, panel"s chairman, Republican Representative Michael McCaul, announced that he will hold a hearing on Sept. 12. "We must stand together and reject racism, bigotry, and prejudice, including the hateful ideologies promoted by neo-Nazis, the KKK, and all other white supremacy groups," McCaul said.
McCaul"s letter was in response to a request from Thompson and the other Democrats on the committee to hold a hearing on the subject. "It is past time for this Committee on Homeland Security to act," the Democrats wrote to McCaul.
The committee will invite leaders of the Homeland Security Department, the FBI and the National Counterterrorism Center to discuss the most serious threats the United States faces, McCaul said.
Meanwhile, the financial crackdown against extremist organizations is picking up speed. According to Bloomberg, Discover Financial announced it was ending merchant agreements with extremist organizations that incite violence.
“In light of recent events, we are terminating merchant agreements with hate groups, given the violence incited by their extremist views,” the Riverwoods, Illinois-based credit-card company said Wednesday in an emailed statement. “The intolerant and racist views of hate groups are inconsistent with our beliefs and practices. While we do not share their opinions, we recognize their right to voice them, no matter how reprehensible we find them.”
Advocacy groups have been calling on major credit-card companies to stop providing financial services for groups such as white supremacists. Color of Change, a racial-justice advocacy group, said Monday that financial services provided by major credit-card companies have been enabling hate groups. Discover declined to say how many groups it’s ending agreements with, or name them.
Separately, Mastercard said it will continue to actively monitor the use of its network by websites that “unlawfully promote or incite violence,” according to a statement from spokesman Seth Eisen. If the network is made aware of activity that is illegal or violates its rules, then it will work with the merchant’s bank to ensure the activity stops, Eisen said. Still, Eisen said the company has consistently stated its belief that offensive speech “has and will be seen for what it is.” “For that reason, we generally do not prohibit the acceptance of Mastercard-branded payment cards by merchants based on our disagreement with specific views espoused or promoted,” Eisen said in the emailed statement.
Visa has also reviewed the list of hate sites, religious organizations, and political groups provided to it by “concerned organizations,” Amanda Pires, a spokeswoman, told Bloomberg. The company determined that a number of the sites weren’t adhering to the merchant acquirer’s acceptable-use policies or were engaging in illegal activities.
“For this reason, these sites are no longer able to accept Visa payments,” Pires said. “Visa does not, however, restrict transactions that are legal and involve free speech or lawful expression of views, even if we may find the organization or its positions to be offensive.”
* * *
Finally, the crackdown is also taking place on social media, where Reuters reported that Twitter on Wednesday suspended accounts linked to the neo-Nazi website Daily Stormer, keeping up pressure from Silicon Valley. Twitter said it would not discuss individual accounts, but at least three accounts affiliated with the Daily Stormer led to pages saying "account suspended."
The San Francisco-based social network prohibits violent threats, harassment and hateful conduct and "will take action on accounts violating those policies," the company said in a statement. Facebook, which unlike Twitter explicitly prohibits hate speech, has taken down several pages from Facebook and Instagram in recent days that it said were associated with hate speech or hate organizations.
The Daily Stormer has been accessible only intermittently the past few days after domain providers GoDaddy Inc and Alphabet Inc"s Google Domains said they would not serve the website.
By Wednesday, Daily Stormer had moved to a Russia-based internet domain, with an address ending in .ru. Later in the day, though, the site was no longer accessible at that address.
Facebook confirmed on Monday that it took down the event page that was used to promote and organize the "Unite the Right" rally, saying it was "actively removing any posts that glorify the horrendous act committed in Charlottesville."
On Wednesday, Facebook said it had removed accounts belonging to Chris Cantwell, a web commentator who has described himself as a white nationalist and said on his site that he had attended the Charlottesville rally. Cantwell"s YouTube account also appeared to have been terminated.
Authored by Don Quijones via WolfStreet.com,
But the IMF has suggestions on how to win the War on Cash...
In January 2017 the European Commission announced it was exploring the option of imposing upper limits on cash payments, with a view to implementing cross-regional measures as soon as 2018. To give the proposal a veneer of respectability and accountability the Commission launched a public consultation on the issue. Now, the answers are in, but they are not what the Commission was expecting.
A staggering 95% of the respondents said they were opposed to a cash ceiling at EU level. Even more emphatic was the answer to the following question:
“How would the introduction of restrictions on payments in cash at EU level benefit you, or your business or your organisation (multiple replies are possible)?”
In the curious absence of an explicit “not at all” option, 99.18% chose to respond with “no answer.” In other words, less than 1% of the more than 30,000 people consulted could think of a single benefit of the EU unleashing cross-regional cash limits.
Granted, 37% of respondents were from Germany and 19% from Austria (56% in total), two countries that have a die-hard love for physical lucre. Even among millennials in Germany, two-thirds say they prefer paying in cash to electronic means, a much higher level than in almost any other advanced economy with the exception of Japan. Another 35% of the survey respondents were from France, a country that is not quite so enamored with cash and whose government has already imposed a maximum cash limit of €1,000.
By its very nature the survey almost certainly attracted a disproportionate number of arch-defenders of physical cash. As such, the responses it elicited are unlikely to be a perfect representation of how all Europeans would feel about the EU’s plans to introduce maximum cash limits. Nonetheless, the sheer strength of opposition should (but probably won’t) give the apparatchiks in Brussels pause for thought.
Respondents cited a number of objections to EU-wide cash restrictions, chief among them the convenience of using cash and the limited impact the measure would probably have on achieving its “stated” objectives of curbing terrorism, tax evasion, and money laundering. Of course, there are many other reasons to worry about living in a cashless (or “less cash”) society that were not offered as an option in the survey, including the vastly increased power it would give to political and monetary authorities as well as the near-impossibility of ever escaping from the clutches of the banking system or central banks’ monetary experiments.
The biggest cited concern for respondents was the threat the cash restrictions would pose to privacy and personal anonymity. A total of 87% of respondents viewed paying with cash as an essential personal freedom. The European Commission would beg to differ. In the small print accompanying the draft legislation it launched in January, it pointed out that privacy and anonymity do not constitute “fundamental” human rights.
Be that as it may, many Europeans still clearly have a soft spot for physical money. If the EU authorities push too hard, too fast in their war on cash, they could provoke a popular backlash. In Germany, trust in Europe’s financial institutions is already at a historic low, with only one in three Germans saying they have confidence in the ECB. The longer QE lasts, the more the number shrinks.
Bundesbank president Jens Weidmann has already warned that it would be “disastrous” if people started to believe cash would be abolished — an oblique reference to the risk of negative interest rates and the escalating war on cash triggering a run on cash. The IMF has also waded into the debate with a working paper full of sage advice for governments keen on “de-cashing” – as the IMF calls this procedure – their economies against the will of their citizenry (emphasis added):
The private-sector-led de-cashing seems preferable to the public-sector-led decashing. The former seems almost entirely benign (e.g., more use of mobile phones to pay for coffee), but still needs policy adaptation. The latter seems more questionable, and people may have valid objections to it. De-cashing of either kind leaves both individuals and states more vulnerable to disruptions, ranging from power outages to hacks to cyberwarfare. In any case, the tempting attempts to impose de-cashing by a decree should be avoided, given the popular personal attachment to cash.
A targeted outreach program is needed to alleviate suspicions related to de-cashing; in particular, that by de-cashing the authorities are trying to control all aspects of peoples’ lives, including their use of money, or push personal savings into banks.
It basically involves making it easier and cheaper for people to use electronic payment methods while subtly turning the screw on those who would prefer to continue using cash (for perfectly valid reasons, as the IMF itself admits), presumably by making it more difficult and expensive to do so. In many places it’s already happening.
But a surprisingly large number of people still appear to have a strong sense of attachment to physical money, particularly in Europe’s most important economy, Germany. And if the survey is any indication, they have little interest in changing those habits.
UPDATE: This was written immediately following the Fed"s Jackson Hole meeting in late Aug 2016. It is a walk through of our escalating alarm at what we discovered was on the agenda. So forgive the color in the first part that betrays our naivete.
But this is we feel one of, if not the first real public attempt to persuade the US to go cashless. Reasons like " It would make it easier to go NIRP" were pitched to the Fed. Meanwhile Rogoff, who was probably interviewing for a job, was preaching that money was used for crime. Point is, it all started snowballing then. And we wrote on observations that things were popping up on cash removal globally.
Since our last piece on how VISA was the beneficiary of India"s move to eliminate cash, and how that was a field test for the West, we stopped writing about it. Essentially giving up and resigning ourselves to the end of economic freedom for most people at the hands of multiculturalism"s self appointed clerical class doing what"s best for us.
Then we read Zerohedge"s post of Yves Smith article for nakedcapitalism.com about Visa bribing merchants to dissuade customers from using cash. So we dug up this piece as it is shockingly obvious what they were planning from the beginning
Visa"s Study on How to Go Cashless in India:
?
written by Vince Lanci , Echobay Partners
Friday at the Fed Symposium a document was handed out in conjunction with a discussion. Note the discussion"s title:
11:55 a.m. - Negative Nominal Interest Rates: author Marvin Goodfriend (Carnegie Mellon), discussant Marianne Nessen, head of monetary policy at Sweden’s Riksbanki
However, the discussion"s accompanying handout had a different title: The Case for Unencumbering Interest Rate Policy at the Zero Bound- Marvin Goodfriend.
We initially dismissed this last Thursday as a sales pitch of the Fed"s ability to handle NIRP if it came to that. "Risky but in the right hands it can work" was our predicted synopsis
Then we read it Friday. Our takeaway was that this document was not just a discussion on NIRP risk and how to assess if/when to use it. This was also an answer key on how to make it happen. And among those recommendations was to "Abolish Paper Currency".
Here are other articles we"ve posted on the topic. Note the India/ VISA story
So to Yves Smith we say the only thing stopping cash from being completely removed is the little phrase on the bills themselves. That phrase is there to protect the country. To refuse US currency in the US is to say you do not recognize the US government. And to use credit cards only, themselves derivative ( or promise to pay US currency at a later date) , is patently absurd. Those that rationalize this as more convenient are again sacrificing freedom for convenience. We think he"d agree.
Remember when using a credit card was sold to us as easier and quicker than cash? Is that still true? We do not think so. Chip tech and "approval" time is 10x longer than using cash now. That assumes the cashier can still count sadly. Now, on a plane you cannot use cash for legitimate reasons we"re sure. But convenince is not one that should be on the list.
So here is the nexus for us if not the start of the movement"s growing balls and beginning its push.
Full Paper HERE
This is a logical extension for using ATMs as profit centers. And just one of many ways you will be sold on the cure for your problems.
Remember when ATM"s were introduced? We were petrified to use our Manny-Hanny cards at first. But they were a cost reducer for banks and the idea was TBTF for them. Tellers could be sacked then and the public embraced it for convenience reasons eventually. Like long lines from no tellers being open ( see EZ Pass today). Then it became a source of revenue as bank ATM"s charge you money if the machine is not theirs. Bank sells on a cure for a disease they create. Imagine being a fired teller having to use an ATM the rest of your life. Dehumanizing we"d imagine.
You will eventually be charged for convenience on any innovation that reduces a company"s operating cost through implementation of said innovation. It is the curse of incumbency. Once behavior becomes a habit, it is hard to break. Electronic incumbency is at the top of that list. Electronic Incumbency in business would be a function of lost executive function and addictive behavior in Psychology.
Here are some bullet points to consider on the topic:
On Saturday, an Echo of Friday"s attack on currency was published by the Wall street Journal. If people like Prof. Kenneth Rogoff have their way In their cashless utopia, you"d have no choice - all purchases and transactions would be recorded, stored, hacked, and sold. It is laughable to say removing the $100 bill would be helpful. Removing the $1000 bill was valid, but that is a factor of 10X Ben Franklin"s note. So it is 1/10 as effective practically. Professor Rogoff is also former chief economist of the International Monetary Fund and about to publish a book called we kid you not " The Curse of Cash".
More from the paper. There are too many to go into at this time. We strongly recommend a full reading of it.
Perhaps that is a good parallel but we don"t see it. Both actions take us further from hard money and deeper into the realm of subjective valuation. So we see NIRP not as a parallel comparison at all, more of an extension of the first action (No gold standard) by the second action (NIRP). From The Article:
If the Gold standard was a deflationary encumbrance at one extreme, then what can negative interest rates be but its polar opposite? How does putting more control into a subjective authority"s hands increase its credibility to "sustain a stable purchase power of money"? We don"t see it.
Here"s one Jim Rickards alerted us to in a twitter comment he made:
Imagine different $ values for cash & bank deposits not "defended" by Fed. (The) Fed considers it (already)
We think he is referring to this section from the article which implies that paper money can be made to trade at less than its digital counterpart.
So unless we are misreading this, if used, the Fed would be debasing your faith in a FIAT paper currency even while it tries to establish an even more esoteric form of FIAT, digital money. But what would give credibility to a digital currency that is based only on (unseen) electrons? Janet Yellen"s opinion and the occasional fat finger?
Those of us familiar with swaps know that the real thing almost always trades at a premium to the tracking product. Here the tracking product would become the physical, and the physical an unsupported tracking stock. This is about tails wagging dogs.
Let"s be clear. Gold is the ultimate FIAT money. It has value because we believe it has value. But it is suited to have value because it is unused in industry and as a monetary unit its supply growth is very predictable. What could change that? Two polar opposite examples would be: If Gold were alchemically synthesized (loses value) or if it were used industrially and irrecoverably (gains value). These would undermine Gold"s credibility as a stable currency. Our issue here is demoting a tangible object (currency) that represents an intangible store of value (FIAT), to an intangible currency (101101101010"s) representing the same.
-follow Vince on twitter @ Vince Lanci
Editor"s Comment
Given the above concept; How easy would it be for the Fed to declare in an emergency: "All Comex Gold contracts are now settled in cash. Delivery has been suspended by force majeure". There would be no need to make ownership illegal if it ever came to that. The government has far better tools at its disposal these days to confiscate Gold if it ever needs.
good Luck
[VIDEO] Jim Rickards on Central Bankers, Gold, and SDRs
