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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.
To pick up yours, swing by….
http://www.phoenixcapitalmarketing.com/cash.html
Best Regards
Phoenix Capital Research
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No Problem, just introduce the 10k dollar bill, then the 100k dollar bill, then the 1B dollar bill, then the 1T dollar bill... and they will not have to print a lot of "hard cash" for long. Now they may well hate cash, but they loathe fizzical aurum, and fizzical argentum... I am not sure their negative emotions toward fizzAg can be captured in words. LOL stack on yall.
And then print on only one side of the paper to save ink.
I have a 1B deutschmark from the twenties. It's the size a pack of cigarettes and is printed on one sde only.
same here, got one of those too. mine was originally a 100 DM note, and then they just PRINTED 1 Billion DM in red ink over it on one side. LOL
I have a $200,000 Zimbabwe bill, it was issued July 2007 and expired in June 2008. Yep, has actual expiration date on it.
Bernanke suggested this as an extreme, though legitimate action.
OK people it's time for GLUE DAY.
Anyone who has big enough nads needs to go and glue a major banks branch door shut on a sunday night, soon.
You need to mix epoxy resin and sand (or tiny ball bearings if you have a source of them) and fill the big lock on the front door with the goop.
Extra credit if your bank has big glass doors of course.
If the lock is a type that takes a flat key, you'll need to use super glue. (about a quarter to a half tubes worth).
Don't get caught by cctv, (cover up on the day, and practice walking and moving differently for a week beforehand).
The important bit is THIS:
Always spend 50cents to cause 500$ 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 asymettrically expensive damage if used creatively.
It's time.
The big front doors are usually unlocked from the inside.. you would have to hit the little back door employee entrance
may i suggest the metal epoxy putty
and yes NSA this info is just for when the terrorist issis guys take over our country. were all American Patriots here. yah Know
Long Live the Head of the CIA..
a 1.29 $ tube of any super glue
squirted in any lock
renders it frozen and usless
in less than a minute...
Umm..and the peeps that REALLY need to cash that check and take a $9 hit? Seems like it would back fire on those that need the cash.
How in god's name am I supposed to wash my truck if I can't put coins in the damned meter??? Park it?? Drive Golf balls?? Wash my King size duvet??
Preposterous!!
Why would you wash your truck? What kind of cowboy are you?
If you don't hold it, you don't own it. They have 'haircuts' in our future and the sheep will be surprised.....
the sheep will be sheared...
You are right that they are trying to FORCE people onto a debt-driven system of finance. BUT just as importantly, they are trying to TRACK every transaction using the Government computers. Once all transactions become electronic money, then everything you buy and sell can be tracked by a computer. And not only that - a computer algorithm will analyse your buying habits and decide if you are a potential RISK to society. That is exactly where we are headed with this.
But if they force "cash" to be a second-rate currency, that will only push cash transactions into an underground economy. That is a ridiculous thing to do ... it is counter-productive to the sensile needs of the US economy. Cash serves a VERY useful purpose, and every household NEEDS some cash for emergency purposes. So "taxing" cash is an utterly absurd idea.
"Once all transactions become electronic money, then everything you buy and sell can be tracked by a computer" Its called 'target marketing' .... it was a big deal to banks to have target marketing algos incorporated into their online banking systems when I did that kind of work 15 years ago but I only worked on 12 banks' sites but some of them were very large banks.
Screamer
"......sell can be tracked by a computer". Uh, who does the actual tracking?
Some sorry assed fat bitch in a giant warehouse in Utah? Good luck with that. Don't EVER underestimate the icompitancy of a govt worker. The days of gathering intel and running it up the chain of command are over. Shit is jumping off way to fast already. Next yr it will be faster.....much faster
Its more likely that it will be an exchange rate with money kept in the banking system electronically. Its a concept called the E Dollar.
they may think about it- as they are tying the rope around their neck-but if they do it-they have jumped off the stool.
Its called "Hawala" -
http://priceonomics.com/hawala-the-working-mans-bitcoin/
95% of the world is "working men and women" the 5% of the world that are wonking it in London, New York and Brussels probably aren't capable of seeing that-which is why they may actually go ahead and jump-
leaving the rest of us to become Muslim in order to access a real financial system providing a socail utility
BEGIN to tax it?
Hasn't inflation always been a "tax" on cash?
if they won't
spend it...
we'll tax it
Yes but it has also been a tax on dollars kept in the banking system. A Tax, banning cash, or an E dollar system entices you forces you into the banking system which is just what they want. Especially when they want to impose negative rates.
Not only that, but businesses, and ultimately consumers, pay about 2.5% for all credit card purchases---thru the business. Thats not including the rates a consumer pays if they carry a credit card balance. Imagine that, a 2.5% skim on all business digital transactions, that benefit the BANKS! Thats nothing more than another "tax" also.
Ditto
One Carrington Event later and cash + gold /silver are kings.
Cash is King.
You have to be pretty stupid to trust banks when they have proven themselves to be dishonest.
It's about time someone started making little medallions with $4 worth of silver in them, sold them for $5 with a promise to buy them back at $5 on demand within ten years.
And they would simply stop making them if the price of silver went up 25%.
They are already doing that. A company in Germany is selling gold grain cards. It's an MLM company but for some reason doesn't like doing business in the US. Funny that.