Europe is moving full speed ahead to eliminate all cash. Instead of reforming and tackling the economic problems, government always seeks to maintain the same course of thinking and that now leads us to the totalitarian approach coming from Brussels. To maintain the euro, they must maintain the banks. But the bank reserves are debts of all member states. As government becomes insolvent as in Greece, the banking system is undermined. The only way to prevent the banking collapse is to prevent people from withdrawing cash. Hence, we see this trend is surfacing in all the mainstream press to get the people ready for what is coming after 2015.75 – the elimination of cash. We are starting to even see this advocated in parts of Germany. We will not be able to buy or sell anything without government approval. That is where we are going and this may be the major event that erupts after 2015.75.
The bail-in that took place in Cyprus managed to get away without bloodshed. The people just took it. This has encouraged governments everywhere that they can now safely do the same thing and the people are like sheep – dumb and stupid. Just how much will society take before they say no?
The title of this is extremely appropriate.
Economic totalitarianism is very, very likely the future. The combination of the electronic age (which invites levels of tracking and scrutiny we can’t even grasp, despite living under them) and the Apogee of Politics is promising a world where human existence occurs under what Alexis de Tocqueville termed, “Democratic Despotism,” an incredibly detailed, fine set of overlapping regulations so oppressive as to suck the very life out of living.
Dystopian fiction is the only place to see what is coming, unless and until the existing large polities are smashed into small fragments. As long as nation-states the size of even Venezuela exist (much less the behemoth states of the USA, France, UK, Brazil, India, China and Mexico), the trend will be toward life looking increasingly like Animal Farm or Nineteen Eighty-Four.
I say again: The war on cash is an attempt by the lemmings to prevent any of their herd from avoiding the plunge into the sea to drown.
When a deflationary collapse in debt guts the value of corporate bonds, municipal bonds, state bonds, federal bonds, Eurodollar bonds, short-term interbank loans, etc., etc., the only place that can possibly avoid a loss of dollar-value is dollars themselves, the ones that physically exist, not the IOU-dollars of a bank account or any other dollar-denominated asset class (which, since every THING on Earth is denominated, somewhere, in a dollar-based market, means EVERY SINGLE THING other than Federal Reserve Notes.)
This is the Great Paradox of finance in the early 21st century, that (well-deserved) reviled paper money could, for a brief time, be the only shelter in the storm.
This is why the War On Cash exists, not because “they” want to engage in negative interest rates. Banknote cash is the only way to avoid being told one day that the MONEY to which you think you are entitled simply does not exist (which is the message of a Bail-In.) Fact is, it was always nothing but a figment of collective imagination.
All we can hope is that the deflationary crisis comes too soon for the (political) gears to crank out a full-out repudiation of cash.
It is my belief (on which I surely may be wrong) that it will still take years of political shenanigans to institute an outright END of cash. This would literally take (in the USA) Acts of Congress, and would involve much more complexity than people today realize. As with FDR’s gold seizure in 1933, there would have to be a grace period to allow people to shake their couches for loose change, so a legal ban on cash must still be YEARS away.
On the other hand, a limit or ban on CASH WITHDRAWALS is One Executive Order away.
If the markets experience a one or three day jolt, something like an out-of-the-blue 20% nosedive, trading curbs will be in force and it is not unimaginable that Obama or the next CLOWN could issue an order disallowing cash withdrawals of more than, say, $500 per month.
At that point, anyone with significant assets in stocks, bonds or bank accounts would be trapped, the exit doors chained, and I guarantee that if things get that scary, the Mass Mind will institute a PANIC.
I still think markets will ultimately plunge 95-98% between now and the mid-2020’s. Of course, I’ve been wrong for 20 years, so what the heck do I know?
dc.- We are witnessing the rise of the Banks as fully empowered governing bodies, replacing all political systems by default.
Another point the author fails to mention is the 3-5% flat tax Banks will recieve for every, EVERY transaction once cash is gone. So… the Banks will make the points upon creation and the points each time its used, points squared. Rothschild said it best…….
“Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild
take that to the bank
The fascist(Govt $ Multi’s) are in bed with the Banks on this deal as they are first in line at the trough (lowest points/ plus inflation points) and as a fringe they get to add total spending awareness to their enforcement portfolio at all levels. Scary shit.
Very Scary Shit.
But it’s not a done deal, not quite yet. Sadly, a nation of sheep begets a government of wolves.
Armstrong is right. When the private banks adopt Soverign Debt as their capital reserves and the Soverign defaults, the banks are bankrupt. The EU knows this is comming.
The trick for a European citizen will be to put their cash in a bank that has the least amount of the type of Soverigns that will default and a government that will make good on their deposits if it does happen.
Since the cash has to go somewhere . I expect German banks inside Germany itself.
But you’ll have to cross a physical checkpoint at some point carrying that cash which will be Euros.
And once the Euro crashes . I’m not sure a bank in Germany wants them either.
Inevitably, the depositor wants their money. If the government fails to backstop the bank with insurance which will mean raising taxes and cutting spending , civil unrest will justifiably occur.
It’s all part of the satanic plan to bring everyone under the control of the BEAST . A cash less society is a big step.You have SATAN, THE BEAST and the False Prophet as the head of this one world government. It’s the unholy trinity from hell.
Well the elites will have to figure out how to get this problem under control before they can have a cashless society…….
business.time.com/2012/11/20/why-so-many-americans-dont-have-bank-accounts/
I can tell you that 30% of lower income WON’T maintain a bank account no matter what the .gov asshats say…….all we have to do is join them.
What are all of the drug dealers and other black marketeers going to use? Probably Au and AG or cryptos, in which the establishment will use as justification to further demonize these instruments of free money, further inhibiting non-compliance with the totalitarian Banksters.
ottomatik – I have read news stories that say that drug dealers trade in Tide laundry detergent — they don’t need money as much as one would think they’ll just be inconvenienced
Mark, the problem is that the cash doesn’t have to go anywhere.
When markets plunge, the wealth in them doesn’t go elsewhere. It evaporates.
dc, 95-98% sounds a little too far to expect things to go…
On the other hand, this entire looming war on cash idea is breathtaking in its directness and simplicity. I have been expecting the economy to go through a painstaking, grinding down process. This would be the equivalent of throwing things into a gigantic woodchipper! Or even a blender! All of a sudden, mechanisms to achieve the effects of social mood wave changes spring into being unexpectedly — and this one seems to have come upon us from nowhere! How do we fight it?
So just how far will this wave down ultimately take us? This war on cash threat is certainly a counterpoint to the not-quite-the-end point of view!
Time to go ICELAND and make them our bitches!
D.C.
What markets will crash?
Armstrong says it will be the government bond market. lenders in the private bond market will have to restructure the terms because borrows won’t be able to pay back the loans if and when the velocity of money turns violently down. wealth will try to preserve itself in some way by purchasing stocks and or real estate.
The government in a vain attempt will try to tax real estate and stocks in some manner to preserve itself. In addition to estate taxes.
The first order of business will be a banking crises because of Soverign debt default. And the European governments will try to prevent a bank run . A bank run that will mean taking paper notes out of the bank and burying them.
Someone has to have the bank notes. If you buy property with your bank notes then the seller has the bank note.
Mark, I concur that the banknotes will go somewhere, but the electronic wealth doesn’t.
When ammo flew off the shelves and prices went sky high when you could find it, how many people came out to gun shows and sold their excess inventory?
NO ONE.
Same could happen to banknote cash in the Greater Depression. The cash will stop circulating just as much as the electronic version evaporates. Prices should fall for both reasons, in most markets (but I’d guess there will be exceptions and have no idea what they might be.)
People will hoard cash like they hoarded 9mm and 5.56 NATO cartridges. Only once the crisis is over do people loosen up.
@ Bob, yes my expectation is extreme. It only exists for two reasons: 1) I think the banks will get into trouble so much that most of what people think they have in “wealth” will be at least temporarily frozen, and prices contract a lot due to that. 2) I believe the Elliott Wave Principle suggests that the 4th wave of one lesser degree is the common place for a correction to terminate. This would by my analysis put the DJIA at or below the level it hit in 1974, which is a solid 95-98% decline from here.
I’m not saying stocks will hit this for sure. I’m just saying that once in about 300 years we see a draw-down like that, and we’re due.
Keep in mind that the NASDAQ composite fell 80% from March 2000 to fall of 2002, and that in inflation-adjusted terms it is STILL below the peak level of 2000.
Denmark Preparing to be the First to Eliminate Cash
By Martin Armstrong
Denmark is not part of the euro; they have their own currency, the krone. So far, they appear likely to become the first country to abolish cash. The Danish government is currently pushing to free some stores, restaurants, and petrol stations from accepting cash payments as Britain was testing last year in Manchester. The Danish government is currently are proposing to scrap cash transactions entirely as part of a package of cost-saving measures introduced ahead of the Danish election in September.
The Danish krone peaked against the dollar in 2008, and the major low for the krone (high in the dollar) took place in 1985 showing an overall rally of 36 years. Denmark is certainly poised to take that step, for behind the curtain this is really a measure to secure taxes and protect the banks from complete collapse preventing bank runs.
This appears to be the big issue that is likely to unfold with the ECM turning point at the end of September 2015. There will likely be a major capital disturbance post-2015.75 because unless ALL nations abolished cash simultaneously, there will still be the likelihood of capital flight from such nations running to those who have not abandoned cash.
We stand on the verge of Economic Totalitarianism that will lead to the total control of money by the state. No one will be able to buy or sell without government approval. The USA has already provided for the revocation of a passport if you owe the government more than $50,000. Passports in Rome were invented not to travel between nations, but to be able to travel to prove you did not owe money to the state and hence were free to travel. History simply always repeats – only the names change.
If the illegal drug market is so vital to the economy how can they ban cash?
D.C. I think the idea of banning cash means that the notes at some point will no longer be valid. But I think you are in part right some people will hoard or have to hoard some in order to avoid taxes.
The velocity of money will turn down not so much because of the supply of money. Which will now be in a bank. But rather because the underground service economy will be taxed. And the consumers response will be to “do it themselves’ to avoid the tax.