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Why Central Banks HATE Cash and Will Begin to Tax It Shortly
Cash is a MAJOR problem for the Central Banks
The reason for this concerns the actual structure of the financial system. As I’ve outlined previously, that structure is as follows:
1) The total currency (actual cash in the form of bills and coins) in the US financial system is a little over $1.36 trillion.
2) When you include digital money sitting in short-term accounts and long-term accounts then you’re talking about roughly $10 trillion in “money” in the financial system.
3) In contrast, the money in the US stock market (equity shares in publicly traded companies) is over $20 trillion in size.
4) The US bond market (money that has been lent to corporations, municipal Governments, State Governments, and the Federal Government) is almost twice this at $38 trillion.
5) Total Credit Market Instruments (mortgages, collateralized debt obligations, junk bonds, commercial paper and other digitally-based “money” that is based on debt) is even larger $58.7 trillion.
6) Unregulated over the counter derivatives traded between the big banks and corporations is north of $220 trillion.
When looking over these data points, the first thing that jumps out at the viewer is that the vast bulk of “money” in the system is in the form of digital loans or credit (non-physical debt).
Put another way, actual physical money or cash (as in bills or coins you can hold in your hand) comprises less than 1% of the “money” in the financial system.
As far as the Central Banks are concerned, this is a good thing because if investors/depositors were ever to try and convert even a small portion of this “wealth” into actual physical bills, the system would implode (there simply is not enough actual cash).
Remember, the current financial system is based on debt. The benchmark for “risk free” money in this system is not actual cash but US Treasuries.
In this scenario, when the 2008 Crisis hit, one of the biggest problems for the Central Banks was to stop investors from fleeing digital wealth for the comfort of physical cash. Indeed, the actual “thing” that almost caused the financial system to collapse was when depositors attempted to pull $500 billion out of money market funds.
A money market fund takes investors’ cash and plunks it into short-term highly liquid debt and credit securities. These funds are meant to offer investors a return on their cash, while being extremely liquid (meaning investors can pull their money at any time).
This works great in theory… but when $500 billion in money was being pulled (roughly 24% of the entire market) in the span of four weeks, the truth of the financial system was quickly laid bare: that digital money is not in fact safe.
To use a metaphor, when the money market fund and commercial paper markets collapsed, the oil that kept the financial system working dried up. Almost immediately, the gears of the system began to grind to a halt.
When all of this happened, the global Central Banks realized that their worst nightmare could in fact become a reality: that if a significant percentage of investors/ depositors ever tried to convert their “wealth” into cash (particularly physical cash) the whole system would implode.
As a result of this, virtually every monetary action taken by the Fed since this time has been devoted to forcing investors away from cash and into risk assets. The most obvious move was to cut interest rates to 0.25%, rendering the return on cash to almost nothing.
However, in their own ways, the various QE programs and Operation Twist have all had similar aims: to force investors away from cash, particularly physical cash.
After all, if cash returns next to nothing, anyone who doesn’t want to lose their purchasing power is forced to seek higher yields in bonds or stocks.
The Fed’s economic models predicted that by doing this, the US economy would come roaring back. The only problem is that it hasn’t. In fact, by most metrics, the US economy has flat-lined for several years now, despite the Fed having held ZIRP for 5-6 years and engaged in three rounds of QE.
As a result of this… mainstream economists at CitiGroup, the German Council of Economic Experts, and bond managers at M&G have suggested doing away with cash entirely.
This is just the beginning. Indeed… we've uncovered a secret document outlining how the US Federal Reserve plans to incinerate savings.
We detail this paper and outline three investment strategies you can implement
right now to protect your capital from the Fed's sinister plan in our Special Report
Survive the Fed's War on Cash.
We are making 1,000 copies available for FREE the general public.
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http://www.phoenixcapitalmarketing.com/cash.html
Best Regards
Phoenix Capital Research
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Eliminating cash or currency is akin to MARK of the Beast. Perhaps we are in End Times. And, in this case as probably the orignal case, the BEAST is the money or banking people. Who would argue that the bankers or finance people are not satan incarnate?
put every one on digital currency accounting
cause planet wide EMT, or cyber hack
next morning
everyone has nothing...
Wait a minute.
"As far as the Central Banks are concerned, this is a good thing because if investors/depositors were ever to try and convert even a small portion of this “wealth” into actual physical bills, the system would implode (there simply is not enough actual cash)."
Are they all mad? Fiat scrip isn't made of unobtainium, is it?
I mean, all they need is some cotton, linen and that green ink squashed out of butterflies from French Guiana, right?
They'll get my stinking cash when they pry it out of my cold, dead hand.
Cold, Hard, Cash... ?
Badges????....we don't need no stinkin badges!!! hahahaha!!!!!
There is a War on Cash in U.S. and Europe. Governments would like to see cash outlawed. Will it happen? Maybe...
http://www.globaldeflationnews.com/governments-are-secretly-preparing-to...
I usually like the Phoenix articles but this one is strange. Cash is not free of risk as long as it is sitting on bank account. Since 2008 people were anyway well advised not to keep larger amounts of cash on bank accounts. Cash is not free of risk in a bank vault or at home. Prudent people reduced cash. It did not need negative interest rates on current account and savings do produce this effect. "After all, if cash returns next to nothing, anyone who doesn’t want to lose their purchasing power is forced to seek higher yields in bonds or stocks". Today bonds and stocks do not deliver higher yields than bank notes in the fridge and if so only marginally - not sufficient to compensate for the inherent risk. The impossibility to hoard cash risk-free at home or at a bank did increase asset prices and did contribute to reduce yield. We are now living in a yield-less world and the only remaining game is to speculate on capital gains. The order of things in the financial world has collapsed and the market will inevitably follow: yield is the fuel, without yield no market stability.
Eurocommissaris Valdis Dombrovskis moet van netwerk WitteGejT tegen de Duitse krant Bild zeggen dat 'de onderhandelingen (over de 3e SpinozaGolf?!?!?) aan de gang zijn', 'dat we een versnelling hoger moeten schakelen' en dat 'alles volgens het plan van de Europese Commissie gaat'!?!??
http://www.waarheiddelen.nl/index.html
Athene heeft zijn IMF Special Drawing Rights reserves al verspeeld en om te overleven zullen ze nu netwerk Juncker moeten informeren over de plannen van netwerk WitteGejT om het systeem 'Leven en Laten Leven' op te zetten. Dit lijkt volgens @DTL de strategie om tot een 'gecontroleerde paradigmawisseling' naar het systeem 'Leven en Laten Leven' te komen.
http://www.zerohedge.com/news/2015-05-12/europe-preparing-greek-bankrupt...
Het IMF heeft al aangegeven niet meer mee te doen met de al 5 jaar lang durende Europese poppenkast. De Griekse premier Alexis Tsipras wil geen Grexit, maar wil dat Brussel een licentie van Stichting Met Elkaar gaat kopen zodat alle regeringen van de EU ineens hun parlementen kunnen informeren dat de wiskundige definitie van de absolute waarheid het nieuwe fundament wordt voor een vreedzame samenleving. Dit is de reden dat Tsipras blijft weigeren om concessies te doen die niet in lijn zijn met de 3e SpinozaGolf.
Alle commissarissen van de koning zijn al op de hoogte dat journalisten van Politico de bron van de 3e SpinozaGolf wil achterhalen.
http://www.politico.com/magazine/story/2015/05/clintons-morocco-117979.h...
D'n Engel laat zien hoe netwerk Juncker de Financiële Markten aan het lijntje houdt met betrekking tot de 3e SpinozaGolf.
http://www.ftm.nl/column/het-mkb-als-cover-up-voor-een-nieuwe-huizenzeep...
ECB-directielid Benoît Cœuré suggereerde tijdens een toespraak in Londen dat de ECB nog steeds het SCHULD=H00P-principe in de lucht wil houden. In mei en juni wordt het omvangrijke opkoopprogramma (dat momenteel maandelijks 60 miljard euro bedraagt) zelfs worden verhoogd om netwerk WitteGejT wat liquiditeit te geven.
Natuurlijk moest ook de ParadijsVogel worden KALTgesteld en dat is afgelopen weekend gebeurd.
http://www.volkskrant.nl/media/telegraaf-eert-sjuul-paradijs-in-chocolad...
Netwerk @0ranjePapegaaY gaat nu de conclusie verspreiden dat de interactie tussen 'psychosegelovige wetgeving' en 'discrete bestuurders' de oorzaak is dat het systeem 'Leven en Laten Leven' nog steeds niet is ingevoerd.
Ook Eurocommissaris Valdis Dombrovskis is zo'n psychosegelovige bestuurder die zou moeten weten hoe onrechtvaardig en corrupt de financiële wereld functioneert.
=== The actual structure of the financial system ===
1) The total currency (actual cash in the form of bills and coins) in the US financial system is a little over $1.36 trillion.
2) When you include digital money sitting in short-term accounts and long-term accounts then you’re talking about roughly $10 trillion in “money” in the financial system.
3) In contrast, the money in the US stock market (equity shares in publicly traded companies) is over $20 trillion in size.
4) The US bond market (money that has been lent to corporations, municipal Governments, State Governments, and the Federal Government) is almost twice this at $38 trillion.
5) Total Credit Market Instruments (mortgages, collateralized debt obligations, junk bonds, commercial paper and other digitally-based “money” that is based on debt) is even larger $58.7 trillion.
6) Unregulated over the counter derivatives traded between the big banks and corporations is north of $220 trillion.
http://www.ftm.nl/column/de-tweet-van-17-miljard-dollar/#comment-1023100425
Een jaar geleden werd er al geschreven dat het Internationaal Monetair Fonds (IMF) kon beslissen om de financiële problemen van Oekraïne te bezien in het GELD=ZUURSTOF-paradigma. Maar zij besloten om het GELD=H00P-principe nog steeds te hanteren. De reden voor Athene dat het IMF kan worden aangeklaagd voor 'het runnen' van een criminele organisatie. Het gerucht gaat dat netwerk Juncker (in het script door d'n Arend) al is geïnformeerd dat een hoger beschavingvorm en economische voorspoed alleen kan worden gebaseerd op het principe van:'waarheiddelen tussen unieke (rechts)personen, waarbij de ongelijkheid wordt gecompenseerd door tegengestelde geldstromen'. In feite alleen wat in meer en mindere mate bij 1) en 2) gebeurt. Griekenland heeft van netwerk WitteGejT niet de toestemming om het systeem 'Leven en Laten Leven' te promoten, want dat zou betekenen dat de activiteiten bij 3), 4), 5) en 6) gigantisch zal veranderen. Dat is mede de reden dat de @RaadvanState van Nederland de StatenGeneraal niet officieel heeft geïnformeerd over de blauwdruk van het systeem 'Leven en Laten Leven' en de wiskundige definitie van de absolute waarheid.
Het gerechtshof in Den Haag wil niet dat het OM de argumentatie van Stichting Met Elkaar gaat gebruiken om de onrechtvaardigheid van het SCHULD=H00P-principe aan te tonen.
http://www.nrc.nl/nieuws/2015/05/19/rabobank-wordt-niet-vervolgd-voor-fr...
=== Er zou in ieder geval geen link zijn tussen de activiteiten van de @CP_sME en het Nederlands beleid om de 3e SpinozaGolf te overleven ===
De argumentatie voor de invoering van het systeem 'Leven en Laten Leven': “Er is geen snelle weg om het geweld te beëindigen. Maar er is ook geen andere weg dan stabiliteit te creëren in de levens van mensen en hun welvaart te bevorderen op de lange termijn.”
http://www.nrc.nl/nieuws/2015/01/17/een-van-de-in-verviers-doodgeschoten...
De Japanse premier Shinzo Abe waarschuwde dat de wereld “onmeetbare schade” zal oplopen als de 3e SpinozaGolf zich over de wereld verspreidt.
http://www.nrc.nl/nieuws/2015/01/17/japan-steunt-strijd-tegen-is-met-172...
Minister Bert Koenders van Buitenlandse Zaken zei dat Nederland een van de weinige landen is 'die diplomatiek actief' het 'recht op vrijheid' van 'ieder creatief bewustzijn' wil verdedigen. Dus ...
Dude- YOU need some selling lessons!
Your friend,
Dog
I suppose if you were a paid up member of the world's elite wanting a new world order, one world government, and Agenda 21 controlling land ownership, the end of capitalism, or just taking away property rights...getting rid of cash would be the first step.
My dad who saw the Nazis and Soviets both go through their family farm...said that governments can make farmers produce food to keep the masses from revolting in cities..."by property taxes". The government just taxes farmland so high that farmers have to produce to keep their land. He has been gone over 20 years, but his words keep haunting me...how can it happen here? What can I do to circumvent it, and to protect my family? I don't think there is anyway to avoid it if cash is abolished. Even silver would be useless to pay the taxes if the governemnt refused it.
If the new world order doesn't have cash,and doesn't deposit the imaginary digits into the farmer's debit account... they have a legal way to drag the farmer off his land and turn it into a state farm...by property tax arrears. This same method could be used with businesses, law firms, homes, apartments...it's mind boggling...It fits perfectly, why wouldn't the bastards do it?
The state can do this as long as landowners don't shoot any moron claiming their land for "state reasons". So, get armed and be willing to defend and eventually die when defending your property. After the say first 1000 casualties on the government side, the government will back off - since the example will have been set for the rest of the landowners and the 0.1% government-paid morons will never be able to overrun the 99.9% landowners with guts and balls. The 0.1% who think they rule the globe can only do this because the 99.9% are to cowardly to resist. Ask the Jews who lived in Nazi Germany, they know all about it and the survivors changed their policy. If the Ghaza based morons don't quit launching missiles ( e.g. ), they get blasted to the stone age, period. That's the spirit!
Hedge with "marginal" land in a country without property taxes. Yucatan
Banknotes are NIBELS and since they are non-interest bearing promissory notes from The State they are discounting human labour costs in terms of money values receiving output before payment.
There is a danger in breaking that contractual link with the broad mass of people. Electronic money requires hardware to access and extract and compulsory bank accounts which banks would then seek to charge for.
The basis of Western docility before State Power might evaporate rapidly
"Electronic money requires hardware to access and extract ..."
And the first time someone pulls the plug out of the wall and the lights go out and there is no electricity available it is instantly game over.
I guess this all means we're going to see tittie bars burning to the ground in 3...2....1
long fire hose...
Tittie bars will still be there, those chicks will just have to learn to pick up stacks of walking liberty silver coins from the table without using their hands.
By then you'll be able to buy the who joint for a couple of Librerities
More phony problems about the Fed so you never find out who owns, who runs it, & how hard they're raping you.
The government has nothing to do with the Fed and the government is not interfering in the market.
The Fed is 100% owned and controlled by the banks.
The Fed is the reason the government has to tax you.
The market is 100% manipulated by the banks. It creates shit the market doesn't need. It breaks the market. The market fails to punish the banker parasites. The market fully subsidizes the banks but that's not enough, the government subsidizes the banks and they get to commit dozens of crimes with impunity.
So WTF is Tyler talking about with this government "central planning" shit?
https://youtu.be/Y1ZxPxSD2Yo
Why do you keep posting the same comments and the same link? Trying to promote your site?
There is no such thing as 'digital money'.
There is 'money' and there is 'credit' promising to pay money.
All deposit accounts are credited accounts. This means that the richest amongst us have exactly the same amount of money in their deposit accounts as the poorest amongst us have in theirs, $0.00. It's all 'Bank Debt'.
"There is 'money' and there is 'credit' promising to pay money" ... wrong there is no one who will promise to pay money only ... "There is 'money' and there is 'credit' promising to pay " ... CURRENCY
Yep, right. Collectable commodities is money, everything else is just dicking around.......
They want to ban cash because it is what their debt is denominated in. It's their get out of debt free card.
They did this once before, when the 'legal tender money' (LTM) and the 'money of account' (MoA) was gold.
See:
Banning Cash - Part IIAll of those illegal aliens over the last 50 or so years were paid under the table. Where do employers (corporations) find money to pay them that is not on the books? Underground economy. Fruit/veggie stands, yard sales, swap meets and Farmer's markets are an example.
Very true, but on the animal farm, not all animals are equal.
Because paper money that's lost 97% of it's value in just 100 years wasn't moving fast enough to zero?
When companies started direct deposit to your checking account . I figured it was over.. SSI went to direct deposit .. and its nearly impossible to get a hard copy check from companies or SSI .. they turn it into a Catch 22 .. one way to force people into the system is to give them few or no options. I wonder how druggies will cope . am sure they will find a way.
Jugs of Tide.
They are not just attacking with low interest rates and taxes. Research civil forfeiture and structuring laws. In many ways, it is already impossible to use cash in any meaningful way.
They can ban cash, or at least they can ban the cash they print but it doesn't work for very long. During the depression Canadian banks quit loaning money in Alberta. Things became so desperate that there was almost no money in circulation. My great grandfather paid his county taxes by renting out a team of horses to the county. He couldn't sell his grain crop as prices had collapsed and almost all his cash had been spent.
Finaly Alberta's provincial government started printing their own money. It didn't take long and Ottawa changed their tune and banks again started issuing loans, in governmet aproved fiat of course.
The Feds think they can control a naturally chaotic system. They are so afraid to let a free market simply work on its own.
"we've uncovered a secret document outlining how the US Federal Reserve plans to incinerate savings."
One word: RONCO.
In future, with so much credit around, so much debt, demographics and with constraints on availablity of cheap inputs there isn't going to be much "growth" for a long, long time.
Everything is going to change. The "live off investment income" model is dying.
And eventually even today's chumps will have to quit their desperate chasing of increasingly non-existent "yield" and begin measuring their wealth TODAY in REAL ASSETS. Or actually PRODUCE something needed...
Paging Andrew Jackson, paging Andrew Jackson...........Please come forward, we request your assistance.
You'll be paging Harryet Tubman soon
zombie Aaron Burr
It's simplicity is beautiful, the number of people that accepts it is scary.
We went from sound money, silver gold, to money backed by sound money to money partly backed by sound money to fiat money.
Each step on the way was small but with clear and simple functions: transfer wealth to the few and provide them with more control.
One of the last steps they can take, only to make it last a bit longer, is going to a 100% digital system.
I have no clue what it takes to wake up the sheep ?
It's like watching a car going straight for a brick wall at 90 m/h, you scream 'hit the brakes' but if they can't hear you, or do not want to listen, there is not much you can do.
The problem is, if somehow they survive they expect you to help, and if you, by miracle, save their lives, they will blaim you for not preventing it.......
So logic tells us just look, and walk, away,.
Theory is alway's the easy part.
Take care,
K a n s
"It's like watching a car going straight for a brick wall at 90 m/h, you scream 'hit the brakes' but if they can't hear you, or do not want to listen, there is not much you can do."
Relax man, we have air bags. There's all kinds of saftey features built into this car. Brick wall? Pbbt!
i'd back the truck up
and salvage the bricks..
There are still many reasons why the exchange rate, or the e-Dollar, will not work. and the most essential reason is what I just said - it is POSSIBLE for the whole global banking system to crash completely. So if all the banks and ATM's go down, we will literally have families on the streets with NO MONEY to buy food. CASH is always the last backstop for financial independence and emergency situations.
There are DEEPER reasons why cash is still king. The average person on the street understands cash. I don't mean the arithmetic of exchanging bills. I mean that if, for example, a waitress works 8 hours and gets paid $80 (plus tips of $30), she KNOWS how the cash translates into REAL WORK. Ultimately, all goods and services in the economy must go back to real productive work done. THAT is the value of money. And for the man or woman on the street, that is how we see what money is "worth".
HOWEVER, the further you go up the "Financial Pyramid", ending with derivatives on top, the further you are removed from real value. No-one has the foggiest notion what half of all those derivatives are really worth. It is all funny-money, and probably vastly over-valued. WHY? Because there is NO REAL COLLATERAL backing up a lot of those financial instruments. So the guy on the street says ... "Yeah, right! GIVE ME my cash!!". And in the end, the guy on the street is CORRECT!!
WHAT did the Central Banks, the Governments, and the Financial Gurus all forget??? ... THEY FORGOT that the economy is supposed to serve real people!!!
The economy is supposed to serve Real People
The global economy is not some giant get-rich-quick scheme where a few people can do financial quantum physics. screw the entire system, and walk away with a billion dollars. The economy ONLY exists to serve the real people.
END OF STORY.
They won't get rid of cash in the US that easily, but in UK, AU and EU the sheeple are more socialist (stupid) and they might get away with it, but then probably we'll start using Renminbis instead..... watch for some trial run in Australia or UK..... France seems to be pushing hard too.....
Probably one of the reasons why it's so hard to make money in the markets is because it's hard to believe it's real when 4-5-6 figures just comes wizzing into an account in a single day.
I wish you were right, but I've been amazed at what people will roll over for. And, even worse, when there is an apparently egregious offense on a protected class of person, the revolutionaries (/s) bust up and burn their own neighborhood, leaving police and governing authorities unscathed.
Lone wolf peaceful actions backfire. A postal carrier bought and flew a mini-chopper onto the Capitol front lawn to deliver letters to Congress insisting on fiscal responsibility (a cute, quaint notion when you think of it). He announced his intentions, posted videos of practice runs, posted the documents on the Inet. When he landed, he was surrounded by Capitol Hill goons pointing guns at him, was immediately arrested, and the news the next day that I saw suggested that he was threatening the White House and made to look like just another Postal kook.
The only way I can see to really wake people up is to hack the major broadcasters. Insert videos of verifiable information into the 4th quarter of exciting football games, or the first 10 minutes of Monday Night Football, or whatever scholck is popular in prime time, or any Oprah and her ilk, etc. Make it personal, tell why it hits their pocketbooks, tell how they've been made fools by folks who view them as chattel. But don't use any words over an 8th grade level.
Never, never, forget the 5th of November.
Indeed
"but then probably we'll start using Renminbis instead....."
Yes, how telling, renminbis/yuans with the picture of the biggest mass murderer in the human history, with over 60 million people killed or starved to death.
Cash is freedom.
Which is why TPTB want to suppress it...