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Physical Cash Poses a HUGE Problem For Central Banks
More and more institutions are trying to make it harder for you to move your money into cash.
Globally, over $5 trillion in debt currently have negative yields in nominal terms, meaning the bond literally has a negative yield when it trades. In the simplest of terms this means that investors are PAYING to own these bonds.
Bonds are not unique in this regard. Switzerland, Denmark and other countries are now charging deposits at their banks. In France and Italy, you are not allowed to make cash transactions above €1,000.
This sounds laughable to most people, but it is a reality in Europe… and in the US, in some regions. Louisiana has made it illegal to purchase second hand goods using cash.
This is just the beginning. The War on Cash will be spreading in the coming weeks.
The reasoning is simple. Most large financial entities are insolvent. As a result, if a significant amount of digital money is converted into actual physical cash, the firm would very quickly implode.
This is precisely what happened in 2008…
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.
None of these issues have been resolved. The big banks remain as leveraged as ever and at risk of implosion should a significant percentage of capital get pulled into physical cash.
European banks as a whole are leveraged at 26 to 1. In simple terms, this means they have just €1 in capital for every €26 in assets (bought via borrowed money).
This is why whenever things get messy in Europe, the ECB and EU begin implementing capital controls.
Consider what recently happened in Greece. Depositors began to flee the banks in droves, so they declared a bank holiday. This holiday included safe deposit boxes… so all the bullion or physical cash Greeks had stashed there remained locked up… just like the “digital” money in their savings accounts.
Again, it was impossible to get cash out of the banks… even cash that technically wasn’t “in the system” anymore but sitting in safe deposit banks.
The US financial system isn’t any better. Indeed, the vast majority of it is in digital money. Actual currency is just a little over $1.36 trillion. Bank accounts are $10 trillion. Stocks are $20 trillion and Bonds are $38 trillion.
And at the top of the heap are the derivatives markets, which are over $220 TRILLION.
If you think the banks aren’t terrified of what this market could do to them, consider that JP Morgan managed to get Congress to put the US taxpayer on the hook for it derivatives trades.
Mind you, this is the same bank that is now refusing to let clients store cash in safe deposit boxes.
This is just the tip of the iceberg. As anyone can tell you, it’s all but impossible to move large amounts of money into cash in the US. Even the large banks will routinely ask you for 24 hours notice if you need $10,000 or more in cash. These are banks will TRLLLIONS of dollars worth of assets on their books.
This is just the beginning.
Indeed, we've uncovered a secret document outlining how the Fed plans to incinerate savings.
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https://www.lewrockwell.com/2015/10/bill-sardi/are-markets-being-manipulated-again/ Are The Markets Being Manipulated To Convert Stocks To Cash In Yet Another Stealth Strategy To Aid The Banksters (And Will It Backfire On The FED?)
forget this banning cash meme...not gonna happen. there are too many obstacles. they want to ban cash like they want to ban guns, but it's just not possible.
A ban on cash will only work if there are no other alternatives to escape out in to.
But yeah many of us saw this coming a long time back.
Get everyone trapped in the system then impose negative interest rates or a bail-in (or both).
All I can say is they must think we are pretty fucking stupid (maybe the majority of the population is, I dunno).
'Never' normally turns out to be 6 months.
This article is like adware that comes with a new computer.
Useless.
major credit card co's and robbing you blind: Am express card sent to me (not asked for by the way by me)..
12.99% int rate, cash advance 24.99%,, one missed payment for any reason, get this: 29.99% for six months after payment....29.99%
and on my savings accounts I get 0.01%..kill the banks.
How about some Roswell stories.
The end of the world stories are getting...
cashless society.... a zionist's wet dream... expose the murdering jewish fiat currency wealth destroyers
Scumbags just can't figure out how to pull their skim / scam on the cash.
Fuck 'em.
$100 bills first.
Money in America is already gone. $100 bills are junk. Euro has 550 Euro bills.
A $100 bill has the purchasing power of a fiver from 1964.
A $100 bill buys about 100 average Hershey chocolate bars at a convenience store. In 1964 it would have bought 2000, that's a 95% drop in purchasing power. Consumers are stupid--they never notice.
And on the other side of that bargain, Hershey's products are wildly over-priced.
haha! complete bullshit. will never happen. pipe dream. get real dude.
NEVER is quite a long time, friend!
Not true on Lousiana, look it up on snopes.
Although I do believe all the other forthcoming ass fuckings to be correct.
We need the guns, save the children!
I think this mofo is gona erupt big time.
A few things about your comment...
1) How could you EVER believe Snopes? It is worse than Wiki....
2) Forbes says that it is true and here is the link for your reading pleasure.
http://www.forbes.com/sites/kenfisher/2011/10/21/louisianas-poor-hating-...
3) Here is the law for your to read yourself.
https://legiscan.com/LA/text/HB195/id/343620
4) Something to consider here (for all of us).... The Civil Forfeiture law as intended for high end drug dealers.... why is it they are taking BILLIONS without charging anyone with crimes and most of the forfeitures are very small amounts often as low as $500...... Abuse of Power is what these laws promote and we all know it!!
"
http://www.snopes.com/politics/business/cashillegal.asp#p05TRO6mYk7hKm8G...Well, that makes it OK, then.
Great point and to add to your point, here is the law. Just do a search for Metals and enjoy the reading!
They are setting up to control the sale of everything when the current financial system becomes useless....
https://legiscan.com/LA/text/HB195/id/343620
Same abuses as the civil forteiture laws will happen...
Isn't Louisiana a civil law jurisdiction, as opposed to common-law in most other states?
The Achilles heel of Fiat currency/fractional reserve banking is that it must expand or it fails. The big banks are insolvent, and are relying on free money for profits. If people where to withdraw and refuse to use the banks, say 10%, The banks couldn't play this shell game any longer, they truely need us more than we need them.
Yes you are revealing a good warning
The attempts to extend central banking beyond its well demarcated boundaries and limits(essentially 20th century technology) is what will lead to bloodshed.
Those running the show are the persistence of a 19th-20th century cartel mindset. They are proving themselves incapable of adapting and transforming into the expectations and demands of the 21st century. Their mindset-that of hierarchical control structures-has long since past them by. The debt those structures created is a testament to their obsolescence.
That kind of thinking -which liberated man from the agricultural world-is a liability in the way of men benefiting from the information age.
"...They are proving themselves incapable of adapting and transforming into the expectations and demands of the 21st century. Their mindset-that of hierarchical control structures-has long since past them by."
But families of central banking cartels will persist, as they always have. And always will.
make no mistake. They are trying to eliminate tipping at restaurants as a step.
And legalizing marijauma in order to reduce the size and accessiblity of black markets.
I think it was Citi that put the US taxpayer on the hook for the derivitives, although I would not be surprised if Chase JP Morgan was also involved. Effers
Actually the 2005 rewrite of US bankruptcy law (google it) places derivative holders at the top of the heap, above actual account holders, bond holders or shareholders if a bank goes bankrupt. The big five Wall Street banks hold the vast majority of the $220 trillion in derivatives, but if one of them goes bust the cascade of events will likely bring the entire system down with it.
The actual cause of 3008 was deep financial corruption. The symptom was loss of trust and a movement to physical. Applying band-aid to the symptom will not cure the deep underlying corruption that is modern finance.