First they came for the terrorists, money launderers, and tax cheats who use cash to commit crimes. Now government officials are coming after everyone who uses cash. The end goal: abolish paper currency altogether and force all transactions to go electronic.
It’s not a conspiracy theory. It’s a conspiracy that tax collectors, regulators, central bankers, and commercial bankers openly admit to. One that they promote because they stand to benefit from the abolition of cash.
“In this futuristic world, all payments are made by contactless card, mobile phone apps or other electronic means, while notes and coins are abolished. Your current account will no longer be held with a bank, but with the government or the central bank,” explains investment banker Jim Leaviss in an article entitled “How to End Boom and Bust: Make Cash Illegal” (The London Telegraph, May 13, 2015).
It’s a central planner’s dream. In an all-electronic economy, no transaction can go unnoticed or untaxed. Central banks can impose deeply negative interest rates to spur consumers to borrow and spend. Banks can impose negative interest rates (fees) on deposit accounts. Account holders become a captive audience. There’s no way for them to exit the system, so they have to pay the fees.
Vested Global Interests Move to End Cash Transactions
Several countries in Europe have imposed negative interest rates. But as long as holding cash remains a viable alternative, interest rates can go negative only so far and for so long. At some point individuals and institutions will pull their funds out of the banking system. They’ll choose to avoid negative rates by simply sitting on paper cash.
Citibank economist Willem Buiter recently called for banning cash altogether. He promised such a move would “solve the world’s central banks’ problem with negative interest rates.” Citibank is a partner in the so-called Better Than Cash Alliance. The Alliance was founded in 2012 to promote the phasing out of cash. Its backers include major banks, MasterCard, Visa, the Ford Foundation, Bill & Melinda Gates Foundation, USAid, and the United Nations.
This group of powerful globalist interests isn’t shy about expressing its ultimate aims. On its web site, it states: “In addition to raising awareness of the benefits of replacing physical cash with electronic payments, the Better Than Cash Alliance facilitates the transition for governments, the development community and the private sector…”
Central banks in Europe have carried out experiments in localities limiting the circulation of coins. Denmark’s central bank is considering ending the printing of banknotes and the minting of coins altogether. These could be phased out by the end of 2016. Such moves may be a preview of what to expect in the United States.
Mega-Bank Puts New Restrictions on Cash Transactions, Safe Deposit Boxes
JP Morgan Chase is moving to limit its customers’ access to and ability to pay with cash. It has begun “restricting borrowers from making cash payments on credit cards, mortgages, equity lines and auto loans, as well as prohibiting storage of cash in safe deposit boxes.” The bank will also begin charging certain business customers a “balance sheet utilization fee” of 1% a year on “excess” deposits.
Curiously, Chase now prohibits customers from storing cash or gold bullion in their safe deposit boxes. Its “Updated Safe Deposit Box Lease Agreement” informs customers, “You agree not to store any cash or coins other than those found to have a collectible value.”
These new restrictions come apparently at the behest of the government. Federal bureaucrats have enlisted banks to report large or “suspicious” cash transactions. Now anyone who wants to place cash or precious metals in a safe deposit box is an offender.
What Ever Happened to the $1,000 Bill?
The war on cash is heading toward its final phase of eliminating bills and coins entirely. It’s been decades in the making.
The U.S. government and the Federal Reserve have been steadily marginalizing users of cash and limiting their options since 1969. That’s when large denomination notes such as the $1,000 bill disappeared for good. After 1969, all denominations above $100 were discontinued and removed from circulation. Not because the public didn’t want them. Because the government didn’t want the public to be able to easily store and exchange large amounts of wealth outside of the banking system.
In the years since, inflation has caused the U.S. dollar to lose around 80% of its purchasing power. That means that a $100 bill today has the purchasing power that a $20 bill did in 1969. Yet there are no plans in the works to issue any larger notes to keep up with inflation.
Could the U.S. be headed the way of Argentina? The South American country was once one of the wealthiest in the world per capita. But corrupt, fiscally irresponsible governments have since given Argentines one financial crisis after another.
From pension nationalization to debt default to runaway inflation, times have been tough in recent years. Today the 100 peso note is worth only U.S. $11. According to The Economist (April 11, 2015), “Over the past decade the peso has tumbled and inflation, the official statistics on which have been manipulated for years, has increased sixfold.”
The government of Argentina refuses to issue any new currency in higher, more convenient denominations. Thus, Argentines who wish to buy expensive items must either carry around unwieldy wads of cash or pay by credit card or other electronic means. The latter being what the banking/government nexus wants to encourage/force.
Here’s an Interesting Option for You
If you want to hold large amounts of wealth in a national currency, consider the euro or Swiss franc. Since the euro’s inception, a €200 and €500 note have been available. But European authorities are moving to take the 500 euro note out of circulation.
The 1,000 Swiss franc note currently represents the most purchasing power you can hold in a single bill of a widely recognized, easily exchanged currency. At current exchange rates it would require 11 $100 bills to equal the value of 1,000 Swiss francs. A single 1,000 franc note is much handier and easier to conceal.
There’s little you can do to stop the government/banking cabal from pursuing its aim of a cashless society. What you can do is become less reliant on their electronic economy. For example, convert financial assets into tangible assets. (Land, wine, fine art, diamonds, precious metals, etc.). Develop more connections with people who do business via barter and trade.
Laws and government programs always have unintended consequences. And an unintended consequence of banning cash may be to drive more people into underground currencies. Perhaps Bitcoin and other digital currencies will gain more traction. But these alternative electronic currencies aren’t truly “off the grid.” To the contrary, the government can monitor blockchain activity. It is undoubtedly developing technological tools to disable electronic crypto-currencies.
Legal Roadblocks to Using Precious Metals as Cash
The ultimate underground currency is physical precious metals. Bartering with gold and silver coins – that is, offering to trade them for goods or services – is legal. Unfortunately, that doesn’t mean they can be used as cash equivalents. There’s an important tax distinction between barter and cash transactions.
Spending U.S. dollars carries no direct tax consequence. Bartering with assets, such as silver coins, that have appreciated in value subjects you to potential capital gains taxes. A few states have moved to recognize gold and silver coins as legal tender cash equivalents. That means they aren’t subject to state income taxes. Currently, Oklahoma and Utah recognize gold and silver as legal tender. Arizona could have become the third state to do so, but in April its governor Doug Ducey vetoed the bill that would have made it happen. He didn’t want to lose the small amount of income tax revenue
that gold and silver transactions generate.
Until legal tender laws are changed at the federal level, federal income tax liabilities may apply to sales or trades of precious metals. Of course, since gold and silver coins can’t be tracked electronically, the government won’t know about most underground barter transactions. So if you forget to report a relatively small barter transaction to the IRS, the agency may be none the wiser. A big-ticket barter transaction such as a car or house is more likely to get you noticed.