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A Vision of Monetary Hell Troubles Our Sleep...

Tyler Durden's picture




 

Submitted by Bill Bonner via Bill Bonner & Partners,

A vision of Hell troubles our sleep.

It is the vision of what the United States will be like when the authorities have obliterated almost three millennia of monetary progress and have their boots on our necks.

Here’s Peter Bofinger, a leading German Keynesian economist, in Der Spiegelmagazine:

With today’s technical possibilities, coins and notes are in fact an anachronism. They made payments incredibly difficult, with people wasting all sorts of time at the cashier as they wait for the person ahead of them to dig through their belongings to find some cash, and for the cashier to render change (rather than, for example, waiting for someone to find the right credit card, complete the transaction, and wait for approval)

 

[…]

 

But the additional time is not the largest benefit of the elimination of cash. It dries out the markets for moonlighting and drug trafficking. Almost a third of the euro cash in circulation consists of 500-euro notes. No one needs those for shopping; light-shy figures use them for their activities. [Also] it would be easier for central banks to impose their monetary policies. At this time, they cannot push interest rates appreciably below zero because the savers would hoard cash. If there is no cash, the zero bound is eliminated.

A Slide Back into Prehistory

Yes, dear reader, it seems to be coming – a dreadful slide back beyond the darkest ages and into the mud and slime of prehistory. Back then, modern “money” had not been invented. Using rudimentary credit and barter systems, you could only trade with people you knew – and on a limited scale. Capitalism was impossible. Progress was unattainable. Wealth couldn’t be accumulated.

Then in India, in about the sixth century B.C., came silver coins – real cash. You didn’t need to know the person you were trading with. You didn’t know his family. Or his motives. Or his balance sheet.

And you didn’t have to keep track of who owed what to whom. You could just settle up – in specie. This made modern commerce and industry possible.

This new wealth also provided people with a new kind of liberty. They could travel – and pay for food and lodging with this new money. They could invest… and use this new, private wealth to create even more wealth.

They could even raise armies… build fortifications… and challenge the power of the ruling elites.

“Suspicious Activities”

But now, governments are trying to abolish cash.

Leading economists want it banned, too. Limits on cash use are already in place in many countries. In France, for instance, a law will come into force in September that will limit cash payments to €1,000 ($1,115). And in the U.S., having a large amount of cash is already considered “suspicious activity,” subject to forfeiture without due process. That’s right: Thanks to civil forfeiture laws, the feds can seize your property without having to convict you of a crime. As the Washington Post reported here last year, police made 61,998 cash seizures – totaling $2.5 billion since 9/11 – without search warrants or indictments.

Why do the feds want to eliminate cash? Isn’t it obvious? They want to control you and your money. Where did you get it? They’ll want to know. What will you do with it? They’ll want a say. Couldn’t you use it for something “bad”?

Heck, you might support “terrorists”… evade taxes… or buy a pack of cigarettes.

The possibilities are too rich to ignore. And the arguments are too persuasive to stop. Zero Hedge summarizes the “pros”:

•  Enhance the tax base, as most/all transactions in the economy could now be traced by the government
•  Substantially constrain the parallel economy, particularly in illicit activities
•  Force people to convert their savings into consumption and/or investment, thereby providing a boost to GDP and employment

Feeling the Feds’ Lash

The arguments are hollow… but they’ll probably be convincing. And for the first time in history, rulers will have a way of controlling people by cutting off their money. Electronic money, run through a government-controlled banking system, allows the feds to put us where they want us – with bars on our cages and whips on our backs. All transactions could be subject to approval. And every person would know that he could feel the feds’ lash at any time.

Under Argentina’s military dictatorship, about 13,000 people “disappeared.” That is, they were rounded up by government death squads, interrogated, murdered, and then thrown from planes into rivers.

How much easier it will be – and more humane – simply to cut off their money? With modern face-recognition technology, the feds could identify almost anyone in any setting – at a café, a public meeting, or an ATM. Then with a couple of strokes on a keyboard, the accounts could be frozen… or confiscated. The poor citizen would “disappear” in seconds – unable to participate in public life and forced to scrounge through trash cans to stay alive.

Who would dare to help him? Who would dare to support him? Who would dare to speak out against this new diabolical system? They, too, would be marked as undesirable… and disappeared.

Imagine the political candidate who suddenly discovers his backers have no money? Imagine the whistle-blower who suddenly has no whistle to blow?

A Warning from Argentina

Are we hallucinating? Are we worrying about nothing?

In Argentina, following a coup d’état in 1976, the military junta first targeted leftist revolutionaries – who may have posed some real threat to the nation. Then, in what became known as the “Dirty War,” the targets grew more diverse – with students, political adversaries, intellectuals, trade unionists, and anyone the junta wanted to get rid of caught in the net. This period of terror only came to a close in 1983, after the generals unwisely invaded the Falkland Islands and proclaimed Argentine sovereignty over a British overseas territory.

The plain people are easily led into war – no matter how moronic the pretense. As they had hoped, the Argentines rallied behind their soldiers. But the British, led by the “Iron Lady,” Margaret Thatcher, did not play the role the generals had expected. Rather than negotiate a settlement, they sent a task force to the South Atlantic, including a nuclear submarine, two aircraft carriers, 42 fighter jets, a brigade of Royal Marine commandos, and an infantry brigade. In a matter of weeks, the British submariners had sunk Argentina’s World War II-era cruiser the General Belgrano… as the Royal Marines, the soldiers of the 5th Infantry Brigade, and the RAF hammered away at the ill-prepared and ill-equipped Argentine troops shivering out in the South Atlantic.

This was too great a humiliation for the Argentines to take. The Union Jack went up once again over the Falklands, the military junta was thrown out of office, and the disappearances stopped.

Are Americans smarter than Argentines? Are their politicians more honest or more faithful to the rule of law? Does power corrupt less in the Northern Hemisphere than it does south of the equator?

We doubt it.

 

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Fri, 05/22/2015 - 20:17 | 6123294 Ham-bone
Ham-bone's picture

There is no free market any longer and only manipulation, lies, deceit in it's place...the demographics of the situation is why the unsustainable model blew up and since the '08 blow it's game over for ever "fixing" the system.  The system is now about maintaining a system that enriches the few at great many's expense.  Interesting that ZH hasn't gotten into the real unresolvable dilema we are facing which is declining populations among the cores of advanced economies vs. massive rises in the 65+ segments...this situation is getting worse everyday...

In 2008, the 25-54 yr/old segment of the US population began outright shrinking (the Ponzi had run out of new "investors")...the market implications were decidedly not good.  As Bush said in Dec. '08, "free market principles were abandoned to save the free market".  In the next year or two, the 25-64 yr/old population segment will likewise begin shrinking and do so for 5 to 8 years.  And this is happening across almost all advanced economies. 

 

The Fed and CB's are simply running a con game to avoid outright panic of the masses and meanwhile stuffing the pockets of the greatest among us at the expense of the vast majority...this was a system premised on ever more population, consumption, investors.  The entire premise was always in trouble but now it is totally broken.  We are presetly in the full on fucking Wile E Coyote moment.

 

Economists and Fed chiefs enjoy explaining the growth of the US population as a part and parcel of the US "exceptionalism" meme.  But the truth of our economic troubles (and OECD nations alike) lies in slowing population growth and the components of that slowdown.  The core populations are shrinking...the old are swelling...the young are barely growing.

 

http://econimica.blogspot.com/2015/05/the-truth-of-great-financial-crisisand.html


When you have demographics against you, interest rates at zero, record debt to GDP, and you are likely beginning a recession while in the midst of the greatest asset bubble of all time...below are some things to consider while Wall St. and the Fed tell you all is well!?! 


http://econimica.blogspot.com/2015/05/reality-check.html

Fri, 05/22/2015 - 20:42 | 6123357 TeamDepends
TeamDepends's picture

Would you like that in your right hand or forehead?

Sat, 05/23/2015 - 06:40 | 6124076 Supernova Born
Supernova Born's picture

The attempted elimination of cash lays the egg that hatches the Black Swan.

 

 

Mon, 05/25/2015 - 17:27 | 6130611 Chuck Walla
Chuck Walla's picture

666

 

FORWARD SOVIET!

Sat, 05/23/2015 - 06:27 | 6124072 doctor10
doctor10's picture

basically what the players are telling all of us is that if ever the market looks as tho its about to be "priced to reality" they intend to blow it and the planet up first

Fri, 05/22/2015 - 20:27 | 6123325 A Lunatic
A Lunatic's picture

Elimination..............!!!

 

https://www.youtube.com/watch?v=svi6JiMe9c0

Fri, 05/22/2015 - 22:08 | 6123547 pickupthatcan
pickupthatcan's picture

.gov can't eliminate cash. They make way to much running Asscrackastan smack and Mexican drugs into this country and around the world. It's TPTB primary retirement fund.

Fri, 05/22/2015 - 20:29 | 6123327 Stoploss
Stoploss's picture

http://finviz.com/futures_charts.ashx?t=ZB&p=m1

 

De Bonds, dey don looook like dey no good...

Fri, 05/22/2015 - 20:30 | 6123330 techstrategy
techstrategy's picture

It isn't the Feds... People need to understand that it is the TBTJ fractional reserve banking control fraud operators that want to lock in their ill gotten gains (centuries of private seigniorage from "money" creation that G3 central banks have just started to do with QE).  Everyone us do brainwashed we don't realize BANKS have always created "money" (fractional reserve claims...) Out of nothing.  Pull your excess cash from TBTJ and put it in ST UST.  Acquire physical gold.  We've lived under the privately controlled fractional reserve control fraud for a century (Fed socializing losses made it a control fraud).  Recognize it is the root of all our problems.. 

Fri, 05/22/2015 - 20:39 | 6123351 Kreditanstalt
Kreditanstalt's picture

BARTER would come back to life. Betcha...

Fri, 05/22/2015 - 21:08 | 6123405 DaveA
DaveA's picture

Herr Bofinger suffers some serious delusions about who serves whom between the government and the people. Does he seriously think illegal commerce will cease when cash no longer exists?

I heard of a guy who bought cocaine with a credit card; his receipt said "tires". Medicare and SNAP are fully electronic, yet they're still riddled with waste and fraud. Sarbanes-Oxley demonstrated that accounting rules don't prevent fraud, they just force people to produce squeaky-clean accountings that bear little relation to reality.

Of course, the government could outlaw precious metals and authorize police to conduct random searches and seize any they find. In which case police would be regarded as thieves in uniform, and often shot on sight.

Fri, 05/22/2015 - 21:16 | 6123431 kchrisc
kchrisc's picture

"A Vision of Monetary Hell Troubles Our Sleep..."

1) Gold and silver? Check
2) Well stocked arsenal? Check.
3) Food and water? Check.
4) Read and trained up on tactics, etc.? Check?
5) A treason list of those that have committed crimes against the American people? Check.
6) A guillotine? Check.
7) Liberty, and the spirit of the American country in my soul? Check.
8) Ready to fight and die for my Liberty and the Liberation of the America country from the occupation and oppression of the DC US and Zion? Check.
9) Sleep like a baby? Check.

See you on the battlefield or in one of Zion's basements.

Liberty is a demand. Tyranny is submission..

Sat, 05/23/2015 - 07:18 | 6124081 Supernova Born
Supernova Born's picture

I didn't see "register to vote" on your list.

;<)

 

Fri, 05/22/2015 - 21:19 | 6123437 steelrules
steelrules's picture

After the crash will all those 100's ounces of silver Leafs and Lady Liberties I put aside be called barter or be cash?

Methinks it be cash.

Fri, 05/22/2015 - 21:30 | 6123467 kchrisc
kchrisc's picture

 

They will be called "contraband."
Your possession of them will be called "terrorism."

Liberty is a demand. Tyranny is submission..

Fri, 05/22/2015 - 22:14 | 6123558 steelrules
steelrules's picture

That goes without saying friend, but as long as I can take them to the local farmer or rancher I care little what TPTB think, my answer to them will be .223 & 7.62 x 39.

PS: I have some hardened steel plate that'll hold a razor sharp edge, just in case you need some to finish your guillotine 


Fri, 05/22/2015 - 22:47 | 6123624 Albertarocks
Albertarocks's picture

It will be the only money left on earth.  You'd better believe it'll be cash.  No worries.

Fri, 05/22/2015 - 21:26 | 6123453 kchrisc
kchrisc's picture

Fraudulent-reserve banking is theft.

Cashless fraudulent-reserve banking is neo-feudalism.

Liberty is a demand. Tyranny is submission..

 

A phrase of wisdom from the time of classical feudalism: "If it all be his lands, then in his lands shall we put him."

Fri, 05/22/2015 - 22:23 | 6123578 andrewp111
andrewp111's picture

The ban on cash will be global to prevent foreign currency from being used. That is they only way they could actually make it work.

Fri, 05/22/2015 - 23:26 | 6123702 q99x2
q99x2's picture

What sleep. Finals coming up.

Sat, 05/23/2015 - 00:19 | 6123804 Dragon HAwk
Dragon HAwk's picture

Total number of federal Employees, divided by the number of gun owning patriots...  or is it the other way around, my bet is the patriots outnumber the feds..  but it would be an interesting number anyway..

Sat, 05/23/2015 - 01:21 | 6123854 Radical Marijuana
Radical Marijuana's picture

The actual situation is WAY WORSE than this article indicates, because the monetary system has been making "money" out of nothing as debts to "pay" for strip-mining a fresh planet's natural resources, developing a debt engine treadmill, upon which people turned those natural resources into garbage and pollution as fast as possible. "Sliding back into prehistory" is an extremely optimistic way to express the problem of everything becoming based on strip-mining the planet, using fundamentally fraudulent financial accounting systems to justify doing that!

For a slightly less optimistic view:

Bond Market Collapse and the Banning of Cash
Sat, 05/23/2015 - 06:59 | 6124092 SMC
SMC's picture

Hell may come after "Just Us" and their thugs can not buy a single natural egg with their digital trash.  Perhaps some TPP loving corporation will feed them - ROFL.

In the long run these clowns are killing themselves and their families.  

 

Sat, 05/23/2015 - 08:40 | 6124199 agent default
agent default's picture

Well if they know how much you have and what you spending it on, it immediately follows that at some point they will have to "take action" against "serious problem".  Think something like limiting ammo purchases to $10 a month.  Just a possible outcome of these policies.

Sat, 05/23/2015 - 09:01 | 6124228 Rich V
Rich V's picture

The BBC put together a great miniseries movie called "The Last Enemy" It covers the points in the post and a lot more. Well worth watching  https://www.youtube.com/watch?v=A-lnKHaYoJ8

 

Sat, 05/23/2015 - 09:15 | 6124248 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

Casino Capitalism requires black market activity in order to maintain buoyancy. If you take the cash out of the corrupt system the masses will hoard commodities across the board and a currency war will turn into a commodity war. GS is leading the pack in the commodity hoarding right now. Moreover, governments use black money to bribe politicians, and business persons, but if governments cannot hide the payments they will be forced to trade in commodities that cannot be easily concealed. ERGO, a cashless society is not at all realistic, or practical.

Sat, 05/23/2015 - 09:15 | 6124249 stant
stant's picture

That mason jar full of coins that I used to carelessly leave in the wash room has now been placed in a safer place

Sat, 05/23/2015 - 09:40 | 6124300 oudinot
oudinot's picture

I can't read this claptrap as the author does not understand history.

The first coins minted were gold and they were done by an Ionian Greek in Lydia named Croesus.

That's where we get the phrase, 'as rich as Croesus'.

Sat, 05/23/2015 - 11:59 | 6124441 Billy Bob101
Billy Bob101's picture

So many times I have thought "boy, they really jumped the shark on that one!" only to learn that it didn't bother most people at all.  It seems pretty radical to eliminate cash, but I have a feeling it might just work, though it may take awhile before they can fully implement it. The first step is to get people seriously thinking about it.  If people get really excited, they take it back and say "anyone who thinks we would do such a thing is crazy!"  When the public calms down, they roll it out again. They do this as many times as necessary until people do not react.  This would fit perfectly into Agenda 21, the ultimate plan.

 

Sat, 05/23/2015 - 12:13 | 6124621 Frankly Speaking
Frankly Speaking's picture

If the central banks truly have a cashless model in mind I would welcome it. If they do not succumb to the mob at their doorstep they have nonetheless dug their own graves over time. I paraphrase.

" Folks, you are going to have to create your own form of currency since this one no longer works".

OK. We will.

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