Drumbeats for the cashless society

pmbug

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... while in recent days we have seen op-eds by both Bloomberg and FT urging the banning of cash, the most disturbing development we have seen yet in the push for a cashless society has come from the following slide in a Morgan Stanley presentation, one in which the bank's head of EMEA equity research Huw van Steenis, pointed out the following...



... and added this:
One of the most surprising comments this year came from a closed session on fintech where I sat next to someone in policy circles who argued that we should move quickly to a cashless economy so that we could introduce negative rates well below 1% – as they were concerned that Larry Summers' secular stagnation was indeed playing out and we would be stuck with negative rates for a decade in Europe. They felt below (1.5)% depositors would start to hoard notes, leading to yet further complexities for monetary policy.
...
http://www.zerohedge.com/news/2016-...ing-spotted-morgan-stanley-presentation-slide

The drumbeats in the media don't happen in a vacuum. This is being discussed by TPTB. They would likely implement it tomorrow if it were feasible and not a logistical nightmare. Beware the creative solution. :paperbag:
 

pmbug

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The Larry Summers drum beat has gotten a lot of attention.

... It’s a two-step process. First, eliminate cash as much as possible. Paper money is the best way to avoid negative interest rates. So paper money must be abolished before the elite plan can be implemented. This forces you into the digital bank system.

Step two is to impose negative interest rates as a disguised tax or wealth transfer. Once everyone is forced into the banks, it’s easy to impose negative interest rates to confiscate your money. Getting savers into digital accounts is like rounding up cattle for the slaughter. For now, it’s just talk by the Fed.

But they’re getting you used to the idea now so they can impose a negative interest rate hidden tax in 2017 or 2018. ...
http://dailyreckoning.com/heres-where-nirp-leads/

...
So with one regulation, the Fed - if it listens to this Harvard charlatan, and it surely will as more and more "academics" get on board with the idea to scrap paper money - could eliminate the value of 78% of all currency in circulation, which in effect would achieve practically the entire goal of destroying the one paper alternative to digital NIRP rates, in the form of paper currency.
...
http://www.zerohedge.com/news/2016-...hes-war-us-paper-money-its-time-kill-100-bill
 

rblong2us

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Should make silver and gold coins a bit more attractive (-:

I suppose they will find ways to make it harder to purchase or sell metals though )-:

Sometimes upsetting the 'oldies' can backfire and they are very resistant to change ......
 

DoChenRollingBearing

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...

I read some creative thinking at the Z Hedge the other day. I addition to stocking up on ammo, Au, Ag, TP, food, etc., I saw an interesting one for storing real wealth that might be hard to confiscate. Large denomination(s) only, but stored wealth all the same:

Rolex watches.

We need more creative ideas.
 

pmbug

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Rolex watches have a huge "status" premium. Their price is not rational based upon the component parts. Rolex knockoffs can be identical to the real thing, but at a fraction of the price. The price differential is vanity. I wouldn't put a lot of faith in vanity maintaining a premium when TSHTF. YMMV.
 

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What effect will a 50% devaluation of the Chinese yuan have on the remaining G20 ?

http://www.zerohedge.com/news/2016-...ager-who-made-killing-subprime-buying-bitcoin

The race to the bottom will surely be entering the final lap .......

Attempting to ban cash will be moot if the stuff is moving towards worthlessness.

Bitcoin will neet to have a strong tie to gold if it is going to carry value across the coming shitstorm.
 

pmbug

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I don't think China will opt for a shock devaluation. To date, they have been signalling a controlled (incremental) descent.
 

pmbug

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Drumbeats sounding a chorus now.
Over the weekend there was a flurry of commentary around the increasing use of NIRP by central banks, and the program’s declining effectiveness. Predictably the IMF - whose Christine Lagarde recently said "When The World Goes Downhill, We Thrive", came out in support, while investors Larry Fink and Bill Gross came out hammering the program.
...
http://www.zerohedge.com/news/2016-...y-savers-bedrock-capitalism-larry-fink-agrees

ZH quotes commentary from the IMF, Financial Times and Barrons.
 

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Looks like Japan will continue to be the leader on the NIRP/cashless society experiment. Now experimenting with infrastructure for a digital currency:
Starting this summer, the government will test a system in which foreign tourists will be able to verify their identities and buy things at stores using only their fingerprints.

The government hopes to increase the number of foreign tourists by using the system to prevent crime and relieve users from the necessity of carrying cash or credit cards. It aims to realize the system by the 2020 Tokyo Olympic and Paralympic Games.

The experiment will have inbound tourists register their fingerprints and other data, such as credit card information, at airports and elsewhere.

Tourists would then be able to conduct tax exemption procedures and make purchases after verifying their identities by placing two fingers on special devices installed at stores.
...
It hopes to realize the system throughout the country, including Tokyo, by 2020.
...
http://the-japan-news.com/news/article/0002859676
 

pmbug

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The president of Argentina's central bank says they are going to move to eliminate cash (banking Swedish style).

http://www.lanacion.com.ar/1893134-sturzenegger-apunta-a-una-bancarizacion-al-estilo-sueco

Google translate:
... It was when he told the audience that keeps regular contact with Stefan Ingves, Riksbank his counterpart (Central Bank of Sweden). "Today we are receiving personal advice," he said. Mention is a whole definition: Sweden is already a case study in the world as the country that has banished the use of cash.
...
 

pmbug

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Apparently Rogoff wrote a bit for the WSJ a couple of weeks ago and is promoting a new book arguing for the abolition of cash:
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Arguing that cash "facilitates crime" and "is also deeply implicated in tax evasion" Harvard University's Kenneth S. Rogoff, former chief economist of the International Monetary Fund, favors"moving to a society where cash is used less frequently and mainly for small transactions."
...
There's really no argument here. Cash abolitionists fully understand that cash shields individuals from the state—and they hate that protection.

"But where does one draw the line between this individual right and the government's need to tax and regulate and to enforce the law?" objects Rogoff, whose book, The Curse of Cash, came out last week. He knows where he would draw it—to encompass a lot more enforcement and much less privacy.
...
http://reason.com/archives/2016/09/06/cash-means-freedom-which-is-why-so-many
 

pmbug

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Apparently, I missed this bit of old news. A few weeks ago, there was a Federal Reserve conference at Jackson Hole, WY. ...
...
Another major speech was by an economist named Marvin Goodfriend, from Carnegie Mellon University. His speech was called The Case for Unencumbering Interest Rate Policy at the Zero Bound.

On its face, the Goodfriend speech was about negative interest rates — and just because Yellen doesn’t like them now doesn’t mean they’re not coming in the future. That negative rate idea has been around for a few years. But Goodfriend’s focus was to promote “unencumbered” negative interest rate policy, which means getting rid of things standing in your way.

Specifically, the No. 1 thing standing in the way of negative rates is cash. If citizens can go to cash, that makes it difficult to impose negative rates on digital bank accounts. That’s also not a new insight. The war on cash has been going on for a while, and prominent economists from Larry Summers to Ken Rogoff have called for an end to cash. Rogoff did so just recently, in a front-page article in the “Review” section of The Wall Street Journal.

What is new in all of this are ideas that Goodfriend presented to the Fed to neutralize the role of cash. His preferred way is just to “abolish paper currency,” as his paper outlines in Section 5A. But then Goodfriend laments that “the public is likely to resist the abolition of paper currency.” He’s right about that.

So Goodfriend comes up with a new concept called the “flexible market-determined deposit price of paper currency.” (Seriously, I’m not making this up; you can find it in Section 5B of his paper.)

In plain English, this means the “money” in your bank account and the “money” in your purse or wallet would be like two different kinds of currency. There would be an exchange rate between the two, just as there is an exchange rate between dollars and euros. The Fed could set this exchange rate at whatever level it wanted and would not be obligated to “defend” that rate at any particular level.

What this means is if you go to the bank and withdraw $1,000, the bank might only give you $980 in cash because of the “exchange rate” between your bank account and cash. Or if you deposit $1,000 in cash, the bank might only credit your bank account $980 because of the same “exchange rate” between your cash and the bank account balance. In short, it’s a way to impose negative interest rates on physical cash.

It’s true that Goodfriend is an academic, not a policymaker. But Yellen and other Fed bigwigs like William Dudley and Stanley Fischer were sitting in the audience. In my experience, this is how things start. ...
http://dailyreckoning.com/get-ready-unencumbered-interest-rate-policy-2/
 

pmbug

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Cash? What's that?

I have to think that if the Fed were to try and implement something along the lines that "Goodfriend" proposes, it would only spark renewed interest in alternatives to cash, like PMs.
 

Maxibillion

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Be prepared for the Dollar to collapse soon

Investing in precious metals is key to prepare for the dollar bill collapse. Fiat currencies can only last for so long, now to come is the inevitable collapse of the dollar bill. They provide as a great asset. Does anybody believe that gold and silver will soon be a replacement currency?
 

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... Does anybody believe that gold and silver will soon be a replacement currency?
Not unless something catastrophic happens. The public is largely ignorant and the banks/financial industry and political class have no vested interest in such a change.
 

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Trending in the wrong direction...
Less than a week after India’s surprise move to scrap its highest denomination cash notes, another front in the War on Cash has intensified down under in Australia.

Yesterday, banking giant UBS proposed that eliminating Australia’s $100 and $50 bills would be “good for the economy and good for the banks.”
...
Most notably, two days ago, Citibank (yes, THAT Citibank) announced that it was going cashless at some of its Australian branches.
...
http://www.zerohedge.com/news/2016-...es-citibank-stop-accepting-cash-some-branches
 

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Well, it's not just UBS in Australia sounding the drum for eliminating cash.
...
Australia looks set to follow in the footsteps of Venezuela and India by abolishing the country’s highest-denomination banknote in a bid to crack down on the “black economy”.

Speaking to ABC radio on Wednesday, Revenue and Financial Services Minister Kelly O’Dwyer flagged a review of the $100 note and cash payments over certain limits as the government looks to recoup billions in unpaid tax.
...
https://mishtalk.com/2016/12/13/war...osed-ban-on-100-bill-no-cash-within-10-years/

Australia, India and Venezuela all moving in this direction currently. :(
 
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