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The Secret Fed Paper That Advocated a "Carry Tax" on All Physical Cash
Many commentators have noted that mainstream economists are calling to do away with cash entirely.
It would be easy to scoff at these proposals as completely insane if the Fed hadn’t published a paper back in 1999 suggesting the implementation of a “carry tax” or taxing actual physical cash using an expiration date if depositors aren’t willing to spend the money.
The author of this lunacy is a visiting scholar with the ECB, the Fed, the IMF, and the Swiss National Bank. The fact that two of those groups have already imposed negative interest rates (ECB and SNB) should give warning that these sorts of ideas are actually taken very seriously by Central Banks.
The paper, written 16 years ago, suggested that if the Fed were to find that zero interest rates didn’t induce economic growth, it could try one of three things:
1) A carry tax (meaning tax the value of actual physical cash that is taken out of the system)
2) Buy assets (QE)
3) Money transfers (literally HAND OUT money through various vehicles)
Regarding #1, the idea here is that since it costs relatively little to store physical cash (the cost of buying a safe), the Fed should be permitted to “tax” physical cash to force cash holders to spend it (put it back into the banking system) or invest it.
The way this would work is that the cash would have some kind of magnetic strip that would record the date that it was withdrawn. Whenever the bill was finally deposited in a bank again, the receiving bank would use this data to deduct a certain percentage of the bill’s value as a “tax” for holding it.
For instance, if the rate was 5% per month and you took out a $100 bill for two months and then deposited it, the receiving bank would only register the bill as being worth $90.25 ($100* 0.95=$95 or the first month, and then $95 *0.95= $90.25 for the second month).
It sounds like absolute insanity, but I can assure you that Central Banks take these sorts of proposals very seriously. QE sounded completely insane back in 1999 and we’ve already seen three rounds of it amounting to over $3 trillion.
No one would have believed the Fed could get away with printing $3 trillion for QE in 1999, but it has happened already. And given that it has failed to boost consumer spending/ economic growth, I wouldn’t at all surprised to see the Fed float one of the other ideas in the coming months.
Indeed, JP Morgan has already begun implementing a similar scheme by forbidding the storage of cash in its safe deposit boxes.
As of March, Chase began restricting the use of cash in selected markets, including Greater Cleveland. The new policy restricts borrowers from using cash to make payments on credit cards, mortgages, equity lines, and auto loans. Chase even goes as far as to prohibit the storage of cash in its safe deposit boxes .
In a letter to its customers dated April 1, 2015 pertaining to its "Updated Safe Deposit Box Lease Agreement," one of the highlighted items reads: "You agree not to store any cash or coins other than those found to have a collectible value." Whether or not this pertains to gold and silver coins with no numismatic value is not explained.
https://mises.org/blog/chase-joins-war-cash
Here is the single largest bank in the US, forbidding depositors from storing cash in a storage box or safe deposit box at their bank. And virtually no one even responded in outrage.
Again, the Fed has declared a War on Cash, and a “carry tax” is coming.
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You do see....how easy it will be to introduce a global monetary unit.....when all money is 0's and 1's ........that is the endgame goal of the global ruling elite ....one currency...one integrated global market....one global federal system to administrate indvidual nations.....one Army to punish transgressors .......ROME 2.0
p.s. gold aint gonna help ya, lol
Cheers
The author discusses the FED, ECB, IMF and SNB as enacting negative interest or carry tax. But in thinking thru the process to get there, I was under the impression that in the US, the House of Reps (with later Sen and Pres approval) was the only way to make legislation for taxes. It seems that the House would never beable to get that done. How does the author see this transpiring to the detriment of the American people?
Globalism sold as beneficial to all may have a secret agenda to suppress problems with Economic Leakage, Monetary Leakage, or... Money flowing out of the Country(Economy) which reduces Velocity of Money Stock.
- Globalism Concept is supposed to lift all boats, but what if there is a huge flow of USD to Cheaper Economies??
I'm not saying that going Cashless in order to tax money in bank accounts... or any other tax on households is an attempt to make up for lost Velocity of Money Stock, and... lost Leverage of Fiscal Policy and Monetary Policy... but the shoe seems to fit.
Think of Illegal Immigrants, other migrants who send money outside of the Economy, think of US Trade Imbalance, and think of International Investment in the USA where Wealth is Extracted from America. Then reflect a bit on Decapitalization of US Industries, Downward Pressure on Wages, and Capital Flight to Services & Production overseas.
I don't have charts on Migrants sending money to relatives, but this is a very old concept.
But here are some other back up charts on Monetary Leakage, Economic Leakage, Velocity Leakage:
MZM Money Stock
2015-05-04: 13,206.3 Billions of Dollars (Broadest Measure of Money, Exponential Increases), Weekly, Ending Monday, Seasonally Adjusted, MZM, Updated: 2015-05-
http://research.stlouisfed.org/fred2/series/MZM
Then check the Downward Collapse of MZM Velocity
Velocity of MZM Money Stock, 2015:Q1: 1.353 Ratio (Collapse perfectly timed to the High in Manufacturing Employment as it also collapsed), Quarterly, Seasonally Adjusted, MZMV, Updated: 2015-04-29
http://research.stlouisfed.org/fred2/series/MZMV
http://www.bea.gov/newsreleases/international/intinv/iip_glance.htm (wow huge trend, $31 Trillion in Foreign Property in USA vs $24 Trillion)
Rest of the world; foreign direct investment in U.S.; asset, Level, 2014:Q4: 3,298,931.7 Millions of Dollars (+ see more), Quarterly, Not Seasonally Adjusted, ROWFDNQ027S, Updated: 2015-03-12
https://research.stlouisfed.org/fred2/series/ROWFDNQ027S
https://research.stlouisfed.org/fred2/series/GPDIA (Gross Private Domestic Investment, $2,851.6 Billions of Dollars)
https://research.stlouisfed.org/fred2/series/GPDICA (Real Gross Private Domestic Investment, $2,704.7 Billions of Chained 2009 Dollars)
Trade Balance: Goods and Services, Balance of Payments Basis
2015-03: -51,367 Millions of Dollars (+ see more)
Monthly, Seasonally Adjusted, BOPGSTB, Updated: 2015-05-05
http://research.stlouisfed.org/fred2/series/BOPGSTB
- Current account balance compares a country's net trade in goods and services, plus net earnings, and net transfer payments to and from the rest of the world during the period specified. These figures are calculated on an exchange rate basis.
Current Account Balance: Total Trade of Goods for the United States©, 2013: -703,911,000,000 US Dollars,
Sum Over Component Sub-periods (2013 was last data, USA ranked 193 out of 193 Countries, Dead Last), Annual, Not Seasonally Adjusted, BPBLTD01USA637S, Updated: 2014-04-03
http://research.stlouisfed.org/fred2/series/BPBLTD01USA637S
https://www.cia.gov/library/publications/the-world-factbook/rankorder/21...
All Sectors; Credit Market Instruments; Liability, Level
2014:Q4: 58,715.58 Billions of Dollars (This is Total US Debt)
Quarterly, End of Period, Not Seasonally Adjusted, TCMDO, http://research.stlouisfed.org/fred2/series/TCMDO
- household debt $14 trillion in 2014
- Federal Debt $18 Trillion in 2014
- Total US Debt $58.7 Trillion in 2014
- Foreign Ownership of Federal Debt $6 Trillion 2014
- Foreign Ownership of Ports, Real Estate, Businesses is unknown since the US Govt doesn't want you to know
- Federal Reserve Balance Sheet $4.4 Trillion in 2014
- US Derivatives Total over $1.7 Quadrillion in 2014
- Gini Ratio Steady Increase over 35 Years to .476
- Population Growth Requires 200K new Jobs every Month
- There is no Honest Broker in FBI, SEC, FINRA, FTC, GAO, or CBO
In an safety deposit box agreement it is stated that cash is not supposed to be kept in the box. I have had two and both had the same language. I do not have a box now because if a bank Holiday were to be declared possession is nine tenths of the law.
So even holding their bullshit cash money with potential unlimited supply from a monopoly isn't good enough for the Jews at the Fed anymore, apparently not enough control or ability to steal anymore.
OK people it's time for GLUE DAY.
Anyone who has big enough nads needs to go and glue a major banks branch door shut on a sunday night, soon.
You need to mix epoxy resin and sand (or tiny ball bearings if you have a source of them) and fill the big lock on the front door with the goop.
Extra credit if your bank has big glass doors of course.
If the lock is a type that takes a flat key, you'll need to use super glue. (about a quarter to a half tubes worth).
Don't get caught by cctv, (cover up on the day, and practice walking and moving differently for a week beforehand).
The important bit is THIS:
Always spend 50cents to cause 500$ worth of damage. Repeat until they give it up.
Spray glue, epoxyy resin, expanding builders foam and super glue are all very cheap and can be bought anonymously...
Even spay paint can cause asymettircally expensive damage if used creatively.
It's time.
"For instance, if the rate was 5% per month and you took out a $100 bill for two months and then deposited it, the receiving bank would only register the bill as being worth $90.25 ($100* 0.95=$95 or the first month, and then $95 *0.95= $90.25 for the second month)."
Conclusion:
The price of Cash will increase 5% per month.
If a seller has to receive (cash)money from a buyer within a month then the buyer has to pay for the extra costs.
He pays 100$ (= 95 $) + 5$ as tax.
You have to understand that:
Companies cannot pay taxes, but the clients of companies do pay it. Because taxes are additional cost on a product.
But if the buyer thinks that the price is too high, he will not buy. (or via banking system) And when the price is too low the seller wouldn 't not sell ( but out of banking system)
Result:
Money outside the banking system, cash, is cheaper (has less costs; more buying power) than money on bank accounts.
Just before such an announcement hoards of people will redraw money and hence you have a bankrun.
So There will be a law on possesion of cash! Fines will be a minimum of 5% per month. ( as a start)
France already is very busy with a law for maximum of 75 € per person.
Thats why putin wins. He understands why the communists created a failed state and went down.
So, the bankers' true war is on independence from the banks. They want full-spectrum dominance and slavery.
I wonder what will happen when the bankers' controller understands that he cannot possibly control the world?!?
The more he tightens his grip ...
The lack of understanding and inability to adapt to change just shows his incompetence.
The biggest problem the central banks face with cash is that physical cash in today's digital fractional reserve banking system is the modern day equivalent of physical gold in a gold-backed fractional reserve banking system. In both cases, if account holders lose trust in the bank, they withdraw their holdings in the form of something physical. This is deadly to a fractional reserve banking system when large numbers of people suddenly lose trust. Physical cash currently plays a small role in transactions because people trust their banks. This could change in a hurry if trust is lost, and a rush to withdraw cash would be the banking industry's worst nightmare. Not being able/willing to provide the cash would quickly feed a full-blown panic and all of the ugly stuff that follows. You can see the effects in Greece, where the banking system has been bleeding physical cash for months now. There are even reports of very large investment funds wanting to withdraw millions or billions in physical cash. The bankers in charge, as well as their supporters, clearly know this. That's why they'd love to get rid of physical cash before there is broad demand for it. With enough time under a stable financial system, the masses would accept a cashless society because we have been evolving toward that for a few decades. But time may be running out before the evolution is complete. More and more people seem to be losing faith in our banking system. With nominal rates near zero and real interest rates in negative territory, there are no consequences from withdrawing cash if you have a safe place to store it (to avoid risk of theft by common criminals) and you don't expect to redeposit it (to avoid civil forfeiture under money-laundering laws). The main reason for wanting to ban cash is to avoid bank runs and hoarding of physical cash outside the fractional reserve banking system. Any Orwellian benefits are icing on the cake.
The decrease in the use of cash is what further enriches the criminal bankers. All bank transactions using credit or debit have an added cost to the spender and receiver. When you use cash there is no banking transaction fee.
It boggles the mind that people prefer to pay higher costs for using credit and debit cards or what ever new electronic (infinitely more complex and prone to break down) gizmo/platform is dreamed up. I know one fellow who is afraid to carry $25 in his wallet for fear of theft, yet he will use his electronic payment method that skims a percentage from every transaction. I'd rather have a common thief steal $50 a year from me than to let the banks skim that much from me.
I've reduced my use of credit cards by 90% over the past few years.
The decrease in the use of cash is what further enriches the criminal bankers. All bank transactions using credit or debit have an added cost to the spender and receiver. When you use cash there is no banking transaction fee.
It boggles the mind that people prefer to pay higher costs for using credit and debit cards or what ever new electronic (infinitely more complex and prone to break down) gizmo/platform is dreamed up. I know one fellow who is afraid to carry $25 in his wallet for fear of theft, yet he will use his electronic payment method that skims a percentage from every transaction. I'd rather have a common thief steal $50 a year from me than to let the banks skim that much from me.
I've reduced my use of credit cards by 90% over the past few years.
This proposal sounds like what they did in Worgl during the depression:
History of Currency The Worgl Experimenthttp://alt-money.tribe.net/thread/70e5eb29-853d-44ca-9faa-b789d1757037
This guy wrote a whole book on a demurage economy.
http://sacred-economics.com/wp-content/uploads/2012/01/sacred-economics-...
My thoughts on it are that with money velocity falling which means the hoarding of curency which is what we have today that in a deflationary scenerio, this could get currency to circulate, spurring economic activity, it worked in worgl. (Deposits were not taxed)
However I see this as an emergency tool at best. Once you get into such a thing, politicians get involved and can manipulate negative rates, and that to me is the danger. But Remember, in inflation, the same thing happens in reverse, it is just a stealth tax.
My preference is zero interest rates on currency and on money creation and that government should not have to pay intererest on money, usury is the problem, and the math over time compounds and is impossible to balance and the interest part of the money is not created so it is the major flaw of our present system.
https://realcurrencies.wordpress.com/interest-free-economics/
The ZWO is shaping up to be a global totalitarian nightmare but please don't notice.
Who in their right mind would store valuables in a bank? Possession is 9/10......
If you're Going to do that- Might as well put your guns & ammo in while you're at it
Hasn't this been going on in Japan for decades?
All I can say is that the reader should take a step back, elevate himself a bit, and think of the absurdity of it all. The sheer and foul absurdity of it all.
Then ponder the tyranny. The brutal and obscene tyranny of it all.
Liberty is a demand. Tyranny is submission..
All direct taxes must be apportionned among the states.
Friend of mine was told he could not deposit his american gold eagles. In a safty deposit box. They would only say it was policy. We just assumed it was an insurance issue, but maybe it's not.
I know you can't trust my anecdotal evidence but I for sure am asking again and digging. We stored shit anyway, but if it is a policy against money rather than a technical insurance rule, then I'm telling my friend to pull the coins out and buy a safe. To much risk of confiscation if it is an anti money ruling.
Srry for typos im on a phone
If this 'anti-cash' movement does eventuate, it just makes Gold, Silver AND Bitcoin more attactive (they all have a zero interest lower bound - and Bitcoinn is more portable, private and has lower storage/security costs)
Anyone carefully managing a diverisfied portfolio likely to increase the percentages alllocated to each one. (That is physical PM's of course, and Bitcoin itself not an ETF or similar)
That will be interesting times. If cash is digitalized what will you trade gold/silver for? It could be used to barter, sure, as there will be an instant blasck market. So of course you have to instantly make it illegal to transact with as only black marketers will be using it. Not sure having those PMs is going to be any kind of panacea when the monsters are in charge and give us their vision of a new world. And full disclosure, im a stacker.
"You agree not to store any cash or coins other than those found to have a collectible value."
Any cash or coin has collectible value to me, that is why I store it, I collect and store. See?
Not that I would dream of getting a safe deposit box with an outfit like you, in any case.
So if I don't deposit it and it floats around the economy for a few years, then what? Sounds like the basis of a PhD thesis that never should have been written.
Instead, the guy that wrote it is probably tenured by now...
....probably tenured at Haaaasvaard, Yale, or Princeton. those institutions have produced and accumulated some of the best tenured idiot savants in the known history of the world.
Mandatory Minimum Income coming our way.
Personally,....I cant wait to get my check.
using your tax dollars to give you a minumum monthly income which you simply plow back into the system-the 'trickle upwards' economy!
Haha. Why would I work? I f I make to much I wouldnt qualify for the Minimum Income Relief program. Work is for the stupid taxpayers !
First, why get hysterical about one point in a 16 year old paper.
Second, not sure that information about Chase is accurate. Seems the credit card payment rule is to detect money laundering, and only prohibits somebody other than the account holder from paying their credit card bills in cash.
Regarding the cash in safe deposit boxes, I can't find ANYTHING credible to back up that one. Gotta link? Seems Mises is the only source for that rumor, and they have nothing to back it up other than some anonymous quote.
With all the crap the banksters are involved in, is it really necessary to make stuff up? Pretty pathetic "research". lol
Any idea depends on the logistics and this idea just doesn’t cut it. Just look to Belgium how they did it.
They just said to retail stores: all the money in cash you bring to the bank? A 2% tax because of administration fees.
And poof!!!
Belgium now a 98% of all payments done electronicly. That’s the highest in the world.
And on your tax application which the government automaticly fills in for you, everything they know about you is in it.
They even show a tab in your tax platform that shows everything you own and the value next to it.
Our government knows everything.
You know all those machines where you put coins in to get stuff and pay like for parking and stuff? Allmost all of them only take visa.
And you can buy visa’s for 50 euro’s and refill them in the post office to make sure even kids have one.
That’s the future.
And if you want more than 3000 euro’s in cash? Thay’ll ask why and charge you a fee for it.
It’s not like they will all call it a tax. Everything will be called a fee. Administration fee. It’s only fair right?
And soon you’ll forget why you pay taxes because every government service costs you a fee.
Yes, sometime ago maybe after the 1970s, and all the waste of Vietnam, the US govt went to profit centers.
So that offices started working with revolving accounts to get funds from other offices for work or services or materials or postage or whatever.
The Profit Centers Accounting enables 'Privatization' as well as charging fees to citizens.
Seems to me any govt office can now be outsourced to the Chinese, to Enron, to Halliburton, to Dynacorp, to a big engineering firm, water services firm, or Private Military Contractor.
But do you think govt has gotten more efficient? Who do you think takes the cream off the top now that fees are charged. Kinda like how land line telephones were supposed to get cheaper after the internet phone calls came into being.
Someone is raking in the Concessions. Taking the cream off the Top. Maybe executive compensation went up.
And some jerks on this forum that can't stand the term "USSA".Really ?
The "real world" out there that of hawala banking-will eat their lunch in about 36 months of that kind of nonsense.
I've been writing about this, its the E Dollar concept.
It phases out cash gradually, allows negative rates just like banning cash, and acts like a debt jubilee all in one fell swoop. Certainly fits the MO for past monetary transfers. Namely the government and banks get stronger.
I would also like Phoenix capital to supply a link to the paper. It certainly sounds relevant to current events but we need to be able to look through it ourselves.