Banks To Soon Outlaw Cash
Of course, the student of scripture realizes that a day is coming when cash will indeed by banned, not just in America, but everywhere. Revelation 13 speaks clearly to this and has done so for 2000 years.
"And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name."
So, a "mark in their right hand or in their foreheads" will be necessary to buy or sell...not cash...and no exceptions allowed..."no man". Interesting to note, don't you think, that parallel to these days we live in when International Bankers and Economists are clamoring to abolish cash, the technology for such a mark is already in place, and indeed, some have already began using a "mark" of sorts, that is an RFID chip, under their skin...and on their hand...for other purposes of convenience. What are you willing to bet, that in the near future, these two ideas will meld into one? Huh. Just be a big coincidence you say. Of course it is, just take the blue pill and all will be fine in Matrix-land. Or, leave the matrix now, and be free to experience authenticate and true salvation by clicking the "red pill" here
and letting the truth set you free. -W.E.
The Alex Jones Channel
Citigroup's Gold "Expert" Demands A Cash BanLate last year, Grexit "expert" Willem Buiter decided that he was a greater expert on the topic of monetary metals than on geopolitics by stating that "Gold Is A 6,000 Year Old Bubble." Now, he has decided that after gold, it is best to just do away with any physical currency altogether and the time to ban cash has arrived.
Submitted by Pater Tenebrarum via Acting-Man blog,
Citigroup’s Chief Economist Joins the Cash Ban BandwagonWe have discussed the views of Citigroup’s chief economist Willem Buiter previously in these pages (see “A Dose of Buiternomics” for details), on occasion of his coming out as a supporter of assorted monetary cranks, such as Silvio Gesell, to name one. Not to put too fine a point to it, Buiter is a monetary crank too.
Buiter is always shilling for more central bank intervention, and it seems no plan can ever be too silly or too extreme for him. In fact, he seems to have made the propagation of utterly crazy ideas his trademark.
Buiter has now joined one of his famous colleagues, Kenneth Rogoff, another intellectual enamored with central planning, in clamoring for a cash ban (for our discussion of Rogoff, see “Meet Kenneth Rogoff, Unreconstructed Statist”). Both Buiter and Rogoff want to make it impossible for citizens to escape the latest depredations of central bankers, such as the imposition of negative interest rates. This is to be done by forcing them to keep their money in accounts at fractionally reserved banks.
If Buiter gets his way, there won’t be a WSOP final table with piles of cash anymore.
Photo credit: David Becker / Las Vegas Review-JournalAs Bloomberg reports:
“The world’s central banks have a problem. When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut — they can bring interest rates to zero, but reducing them further below that is fraught with problems, the biggest of which is cash in the economy.(emphasis added)
In a new piece, Citi’s Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates. Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction? Cash therefore gives people an easy and effective way of avoiding negative nominal rates. Buiter’s note suggests three ways to address this problem:
Yes, Buiter’s solution to cash’s ability to allow people to avoid negative deposit rates is to abolish cash altogether. (Note that he’s far from being the first to float this idea. Ken Rogoff has given his endorsement to the idea as well, as have others.)
- Abolish currency.
- Tax currency.
- Remove the fixed exchange rate between currency and central bank reserves/deposits.
Before looking at the practicalities of abolishing currency, we should first look at whether it could ever be necessary. Due to the costs of holding large amounts of cash, Buiter puts the actual nominal rate at which the move to cash makes sense as closer to -100bp. So, in order for a cash abolition to become necessary, central banks would need to be in a position where they wished to set nominal rates much lower than that.
Buiter does not have to go far to find an example of where a central bank may have wanted to set interest rates much lower to -100bp. He uses (a fairly aggressive) Taylor Rule to show that Federal Reserve rates should have been as low as -6 percent during the financial crisis.”
As mentioned above, no meddling by a central bank is ever too extreme or too crazy for Mr. Buiter. Here is his ridiculous “Taylor rule” chart (the conclusions of which by the way would be vehemently disputed by none other than Mr. Taylor himself).
Buiter’s ridiculous chart asserting that a “negative interest rate of 6% would have been needed” in 2008-2010, via Citigroup, Bloomberg.This nice gentlemen who wants to either “abolish cash” or “tax currency” for the good of us all, is a typical example of the modern-day viciously statist intellectual (h/t, Hans-Hermann Hoppe), who constantly pines for the authorities to implement social engineering on a grand scale. As long as they implement his plan, everything will be great.
Not Bothered by ConcernsBloomberg tells us that “Buiter is aware that his idea may a bit controversial”. What a relief. He even lists the disadvantages of abolishing cash, only to dismiss them out of hand. With the exception of one crucial point, he is mainly erecting straw men.
“Buiter is aware that his idea may be somewhat controversial, so he goes to the effort of listing the disadvantages of abolishing cash.We are surprised by the optimism expressed by Bloomberg that “the chances of an administration taking the decision to abolish cash seem vanishingly small”. We believe that governments all over the so-called “free world” are working feverishly to make a ban of cash currency a reality.
Buiter dismisses each of these concerns in turn, finishing with: In summary, we therefore conclude that the arguments against abolishing currency seem rather weak.
- Abolishing currency will constitute a noticeable change in many people’s lives and change often tends to be resisted.
- Currency use remains high among the poor and some older people. (Buiter suggests that keeping low-denomination cash in circulation — nothing larger than $5 — might solve this.)
- Central banks and governments would lose seigniorage revenue.
- Abolishing currency would inevitably be associated with a loss of privacy and create risks of excessive intrusion by the government.
- Switching exclusively to electronic payments may create new security and operational risks.
Whatever the strength of the arguments, the chances of an administration taking the decision to abolish cash seem vanishingly small.
Naturally, we couldn’t care less about the “seignorage” revenue of the State. In our opinion central banks shouldn’t even exist, and “seignorage” is nothing but a euphemism for outright theft. It’s a nice touch that Buiter also doesn’t want to “throw seniors under the bus” and gives a brief thought to the poor as well. Why would any of them ever need anything more than a $5 note?
That someone like Buiter doesn’t find it difficult to dismiss the concern that “abolishing currency would inevitably be associated with a loss of privacy and create risks of excessive intrusion by the government” is no surprise, but it is indeed a legitimate concern. Under the cover of the “war on drugs” and lately the even bigger government-sponsored racket known as the “war on terror”, financial privacy has been all but eradicated already.
Willem Buiter, shill for statism and central planning, here seen at the Council for Foreign Relations. Did we mention that we believe he’s an atrocious economist?
Photo credit: BloombergNeedless to say, we dispute the idea that central banks should ever impose negative interest rates. This policy is revolting economic nonsense that greatly harms the economy. As we have previously pointed out, given that the natural rate of interest can never be zero or negative, it is an inescapable conclusion that any imposition of negative market rates will end up destroying scarce capital and leave society poorer.
Lastly, Buiter fails to list one counterargument that we believe is extremely important. Since he works for a charter member of the world’s most powerful banking cartel, this is no big surprise either. We will make up for his oversight.
The 2008 crisis has not shown that anyone needs “negative interest rates” as Buiter erroneously claims. It has mainly shown how rickety and de facto insolvent the fractionally reserved banking system really is. If not for the introduction of an accounting trick (under immense political pressure, the FASB allowed the banks to dispense with mark-to-market accounting, which suddenly made them “whole” again), a huge taxpayer bailout and money printing by the central bank on an unprecedented scale (in the post WW2 era), several of the biggest banks would have gone the way of Lehman.
It was a good reminder that although fiduciary media – deposit money that is not backed by standard money – are part of the money supply in the broader sense, their main characteristic is that they exist only in the form of accounting entries. Hence, fractionally reserved banks are at all times insolvent, since they cannot possibly pay all demand deposits on demand. This obvious violation of what once used to be a bailment contract has been sanctioned by the courts in the 19th century under the influence of banking interests. If one considers how deposit money is multiplied under this system, it should be obvious that the scheme is fundamentally fraudulent. It goes against the grain of legal traditions that have been well-established in Western culture since antiquity.
If cash were to be banned, people could no longer opt out from this system. Bank runs would no longer be possible at all. While a bank run these days only gives one government scrip that is itself an irredeemable liability of a central bank, it is at least slightly more “real” than the accounting entry known as deposit money. Most importantly, cash can insure one against a bank going under, or the breakdown of the entire banking system, which is always a potential danger. Banks would obviously love a cash ban – quite possibly they are the only ones who would love it even more than governments.