If you had asked me to make a wager on where the SHTF it would never have been Germany. But it appears that Germany may be the place. An announcement such as this usually happens on Friday night or perhaps Saturday when markets are closed. It will be interesting to see what happens when the markets get around to opening tomorrow – first in Europe and then in the USA.
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It was just two days ago that Bloomberg implored officials to “bring on a cashless future” in an Op-Ed that calls notes and coins “dirty, dangerous, unwieldy, and expensive.”
You probably never thought of your cash that way, but increasingly, authorities and the powers that be seem determined to lay the groundwork for the abolition of what Bloomberg calls “antiquated” physical money.
We’ve documented the cash ban calls on a number of occasions including, most recently, those that emanated from DNB, Norway’s largest bank where executive Trond Bentestuen said that although “there is approximately 50 billion kroner in circulation, the Norges Bank can only account for 40 percent of its use.”
That, Bentestuen figures, “means that 60 percent of money usage is outside of any control.” “We believe,” he continues, “that is due to under-the-table money and laundering.”
DNB goes on to say that after identifying “many dangers and disadvantages” associated with cash, the bank has “concluded that it should be phased out.”
On Tuesday we got the latest evidence that officials across the globe are preparing to institute a cashless “utopia” when Handelsblatt reported (in a piece called “The Death of Cash) that the Social Democrats – the junior partner in Angela Merkel’s coalition government – have proposed a €5,000 limit on cash transactions and the elimination of the €500 note.
Berlin is using a familiar scapegoat to justify the plan: the need to fight “terrorists” and “foreign criminals.”
“Limits on cash transactions would discourage foreign criminals from coming here to launder money,” says a paper penned by the Social Democrats. “If sums over €5,000 have to pass through traceable bank transactions, laundering would be severely hampered, it adds.”
On Wednesday, we got confirmation of the plan from Deputy Finance Minister Michael Meister who told reporters that Germany is proposing a euroarea ban on cash transactions over €5,000 to combat terrorism financing and money laundering.
“Since money laundering and terrorism financing are cross-border threats,” it makes sense to adopt a bloc-wide “solution”, but “if a European solution isn’t possible, Germany will move ahead on its own,” he added.
This comes at a rather convenient time for policy makers in Europe. Rates are already sitting at -0.30% and are likely to be cut by an additional 10bps in March. But that’s not likely to do anything to curb the disinflationary impulse. Mario Draghi isn’t anywhere close to his inflation target and it says a lot about how ineffective the ECB has been when everyone is relieved to see annual inflation running at the “brisk” pace of 0.4%.
As a reminder, the gradual phasing out of cash strips the public of its economic autonomy. Central bankers can only control interest rates down to a certain “lower bound.” Once negative rates are passed on to depositors – and trust us, that’s coming – people will simply start pulling their money out of the bank. The more negative rates go, the faster those withdrawals will be.
When you ban cash you eliminate this problem. In a cashless society with a government-managed digital currency there is no effective lower bound. If the economy isn’t doing what a bunch of bureaucrats want it to do, they can simply make interest rates deeply negative, forcing would-be savers to become consumers by making them choose between spending or watching as the bank simply confiscates their money in the name of NIRP.
Obviously, banning transactions above €5,000 is a long way from a wholesale ban on cash and several other countries have similar limits on cash transactions. Still, there’s no reason why the same rationale (i.e. fighting terror financing) can’t be applied to smaller sums – or all cash transactions. After all, it’s not as though “foreign criminals” only transact in amounts over €5,000 and since “follow the money” is usually the best way to get to the bottom of a perceived “problem,” having a ledger of everything someone or some group does financially would likely be an effective way to crack down on illicit activity.
We would argue that the cost to society of creating an economy wherein people’s economic decisions are completely dictated by small groups of economists far outweighs any benefits that would accrue from using a centrally planned digital currency to deter crime.
As for how a cash ban would go over in Germany, we seriously doubt the public would take it laying down given that only 18.7% of transactions in the country involve plastic cards.
Reprinted with permission from Zero Hedge.
Terror Financing – it is from governments, not the lying excuses from the politicians. They want to prevent Bank Runs in an economy destroyed by the very same politicians.
Hmmm
Which may explain why, despite a concerted effort by the media to discredit the idea, the wealthy are buying gold and silver at such clip, that monthly allocations are running out after a few weeks. In fact between the Russia, China, India and individual demand, the metals have outstripped supply every single year since 2011. And global production of gold and silver is already beginning to decline as supplies are exhausted. Gold and silver are a natural hedge against the threat of a a cashless society. And despite the continued claims of governments around the world, other than oil (will they will raise almost instantly the moment the force us to give up our cash) inflation is stilling running in 5-6% range. This after double digit inflation over the last 5 years. Such is the power of one small group controlling both the 2 most powerful banking syndicates (the FED and the Bank of England) as well as essentially the entire media apparatus in the US and much of Europe.
The idea behind a cashless society is just as the author suggests, to simply to make it impossible to stop this same group from robbing the working class. Not to mention that with such complete control of the our money they will effectively seize control of our lives. We will truly be slaves.
Money is how humans interact without killing each other. It is a peaceful civilizing influence. Money lets people behave as equals, trading value for value.
Having gold or silver in your pocket made you an autonomous being. Having paper money in your pocket at least allowed people to pretend that they were autonomous beings. Now all pretense is off and human beings will become merely ‘humans’, controlled completely by the seedy characters sitting around conference tables in Davos and Basel.
Sic homo finem…
When I was in my 40’s I was looking forward to the future, my kids were growing up and getting married.
In my 50’s they started having children, we have three boys and a girl. It pains me to think of the kind of future the children are going to have.
What’s next? All business is controlled by the state, any profit that is deemed excessive will be redistributed in fairness with electronic chips?
When (not if) physical fiat currency is withdrawn from circulation to force the hobbits into a totality of “cashless” transactions, other media of exchange will be improvised in the economy.
Count on it. This has been the practice of mankind throughout history, in every case where government assholes have debauched the coinage or otherwise undertaken “legal” counterfeiting.
The effects must necessarily become devastating (there are very real costs involved in getting around such Malevolent Jobholder thuggery, and to the extent that those motherfuckers show their usual aptitude for turning from parasites to predators, they will cripple the division-of-labor society upon which they batten), but eventually the governing class must fail of their purpose simply because their own prosperity depends upon the continuation of civilization.
If, indeed, the hobbits don’t invoke the Scouring of the Shire with far less gentility than fantasist Tolkien had fabulated.
All those lamp posts, all that cordage, and the law of gravity waiting to be exploited…
Cash will never disappear. It may not be what it is today; green paper in number denominations, but it will still be in use. People will just choose to transact business outside the banking system. It has always been this way and will continue to be so.
Two .223 rounds for a loaf of bread? Bartering and negotiation will continue on in spite of these useful idiots.
Just this week, plane loads of paper currency was being flown into Venezuela as the Bolivar is devaluing at a rapid rate. It now takes a brick sized stack of Bolivars to buy a meal in a restaurant and frycooks are draining fried food on 100 Bolivar notes as they are cheaper than papertowels or napkins.
Constman54: Exactly, except for one thing. That loaf of bread is hard to make without certain ingredients. I think there was an article on here not too long ago about the “just in time” supply system intentionally (or not) letting shelves run a bit empty to maximize profits and minimize waste. (Okay, that wasn’t what the article said, but I’m reading between the lines about WHY the shelves would be let go empty). Well, I got to looking around at a few things I buy in bulk and discovered something. Several of those things ARE NOT AVAILABLE IN BULK any longer.
I got online and searched for the items I used to pick up at big box stores (SAMS or COSTCO) a couple times a year and discovered they are still available at TWICE the price plus $11.99 shipping. Now, this is just anecdotal and I have no evidence at all that something is awry, but I’m making a trip to the one store where I can get those items this weekend and buying enough for a few years. I suspect there is something amiss.
Besides, one of the items is Parmesan cheese and with an Italian stallion living with me and consuming mass quantities of homemade pasta and homemade sauce, this place practically RUNS on Parmesan cheese. And until I get my own goats and a milk cow, I need some cheese stored up.
Zero Hedge has an interesting article today about some bill in Congress to turn the USPS into a banking institution. It’s a good read, some of the comments are hilarious. Sitting here waiting for the call to push snow again. They said a dusting for us, we’ve already got 3-4″ covering the Rhody’s out front. Dammit!
Reports Bea Lever: “Just this week, plane loads of paper currency was being flown into Venezuela as the Bolivar is devaluing at a rapid rate. It now takes a brick sized stack of Bolivars to buy a meal in a restaurant and frycooks are draining fried food on 100 Bolivar notes as they are cheaper than papertowels or napkins.”
Inevitable. Put socialists in charge of a gang-rape and every male participant would manifest retrograde ejaculation.
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“Government is the only institution that can take a perfectly good piece of paper, print some noble words on it, and make it perfectly worthless.”
— Ludwig von Mises
The additional control is a feature for them but I would say the main impetus is to pave the way for wealth confiscation without the need for legislation. All in the name of central planning and stabilization. But really to get more resources to distribute to the powerful and the sheep who vote for them and keep the game going a little longer before the inevitable collapse.
Specops,
Money is also the reason people kill each other.
Below a certain level it means survival and comfort, above a certain level it means power over others. Both common reasons for all sorts of criminal and violent behavior on everything from the interpersonal to the international level (consider, those “migrants” aren’t invading poor countries, they are invading rich ones).
It’s kind of like guns… they want to abolish them because of the criminal actions of a few, and limiting access provides them with greater control.
I’m with ConstMan; people will always find a way around it.
“Terror Financing – it is from governments, not the lying excuses from the politicians. They want to prevent Bank Runs in an economy destroyed by the very same politicians.”
Perfect…more or less. My understanding is that “terrorism” is sponsored and paid for by governments, and that drug monies (again government) are being laundered by the banks.
So capitol controls are a way for the banks to hold all monies and to absolutely control
all disbursement.
Maggie’s point: stock up, because the “control the food” gang has read the history
books.
Barter? What if there is nothing to barter for? The gov can lock us down in more
ways than banning cash.
I’m pretty certain the religious folks would say that a cashless society is either the mark of the beast or at least the harbinger of it
Forget not that we are in the last half of the current Fourth Turning and that all manner of evil and horrifying things can happen between now and when the current Fourth Turning runs out of steam.
That means wars, civil strife, changes you wouldn’t believe in government (including casual voiding of the Constitution – which is happening as we speak). The price of oil drops so what happens today? The Feds will tack on an extra $0.33 cent tax on it to stuff more money into the Federal coffers.
You can be sure of one thing. Change is happening and we are living through it. Very little, if any, of it will be good changes due to the timing and being in the Fourth Turning.
How bad will it get? Very likely world changing, just like previous Turnings. Cycles rule and there is nothing one can do to change it. The only difference between this Turning and the Last 4th Turning is that a number of countries now have the capability to initiate an extinction event and only time will tell if that happens.
MA
” The only difference between this Turning and the Last 4th Turning is that a number of countries now have the capability to initiate an extinction event and only time will tell if that happens.”
Yeah, as if I don’t have enough trouble sleeping……………..thanks.
What the Germans need do is reign in Deutsche Bank for their billions in money laundering and instead of fines, prosecute the executives. That’ll fix it.
Of course the U.S. won’t like it because drug money helps support the Dollar.
@Westcoaster,
Even more important, drug money helps finance the “off-budget” activities of the three-letter agencies. And that is a big reason why drug prohibition will not end.
Maggie, add that the ships aren’t bringing in food etc (waiting for the inflation so they can get a better price). Try to find reasonably priced powdered milk/eggs, corn beef, jerky etc. Also, the dollar will shortly be reset down 30% and then piece by piece to eventually maybe 10% of current value; interest back to 20%; and loans rare as honest politicians. Drag asses better get on the stick and buy some land before the quadrillion reserve dollars TPTB printed, went overseas to be stacked in safes and comes back home looking for tangible value.
@Anarcho: Which is why we’re still in Afghanistan. To help guard the poppy crop and make sure it safely arrives at its destination.
It appears there’s going to be some serious wealth transfers to the banks if this becomes law. Big Finance will have a lock on us. Couple things come to mind, I’m sure there’s others.
1. We’ll be forced to either spend our money or,
2. Forced to park it at a bank, and than pay them to hold it,
3. And, give them a cut out of every transaction.
To be sure, Big Money is salivating at this one and we’ll be subjected to every bit of propaganda sound bite their spin groups can come up with. There could be other factors we’re not seeing, but it is alarming that the push for this is coming from the banking sector.
You can bet that