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Is a Ban on Physical Cash Coming Soon?

Phoenix Capital Research's picture




 

The Central Banks hate physical cash. So much so they there will likely try to ban it in the near future.

 

You see, almost all of the “wealth” in the financial system is digital in nature.

 

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.

 

If you think this sounds like some kind of conspiracy theory, consider that France just banned any transaction over €1,000 Euros from using physical cash. Spain has already banned transactions over €2,500. Uruguay has banned transactions over $5,000. And on and on.

 

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

Our FREE daily eletter: http://gainspainscapital.com/

 

 

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Thu, 10/08/2015 - 17:30 | 6646427 richsob
richsob's picture

They will never "ban cash".  It would be a nightmare to regulate.  All they have to do is pass a law that any sale over $50 has to be done with a credit card or debit card.  And if you get caught buying stuff for cash at flea markets, garage sales, etc. both the buyer and the seller face a year in jail.  The sheeple will fall in line.

Thu, 10/08/2015 - 15:16 | 6645659 we built this city
we built this city's picture

Does this guy lives on Mars?

 

There is only one person more disconnected than this Pheonix guy- and it's 

the fellow sitting in the White House

Thu, 10/08/2015 - 15:08 | 6645617 unplugged
unplugged's picture

why is this author still on this site?  quackery

Thu, 10/08/2015 - 12:44 | 6644817 CarpetShag
CarpetShag's picture

1. Fuck.
2. No.

Thu, 10/08/2015 - 12:24 | 6644691 Skiprrrdog
Skiprrrdog's picture

We are already halfway there...what do you think 'direct deposit' of your paycheck is?

Thu, 10/08/2015 - 13:32 | 6645124 Citxmech
Citxmech's picture

Try and withdraw more than $2,500.00 in cash from the bank and you'll see how true this is.

Thu, 10/08/2015 - 18:04 | 6646571 slammin_dude
slammin_dude's picture

while i agree generally with truth of war on cash, i took out 14k in cash no hassles, they just asked me to give them a day so that they don't get cleaned out...but also offered 2 other branches that have the cash on premises if i wanted

 

the greatest user of cash is the money launders, drug trafficker and arms dealers....all done by the USgovt and CIA etc....you think they'll hurt their profits or ability to conduct blackmarket deals? cmon....

Thu, 10/08/2015 - 15:01 | 6645590 Jameson18
Jameson18's picture

In financial regulation, a suspicious activity report (or SAR) is a report made by a financial institution about suspicious or potentially suspicious activity.

It does not matter the amount. But a movement of 10000 in cash in a 24 hr period and the feds get their panties in a bunch.

Thu, 10/08/2015 - 15:30 | 6645752 Citxmech
Citxmech's picture

I tried to pull out $5k in cash to partially cover the purchase of a tractor and I had to got to three f'n branches.  I couldn't believe it.  

Thu, 10/08/2015 - 15:39 | 6645832 PacOps
PacOps's picture

If you call your branch, tell them how much you want and give them a few days to have it delivered - no problem.

Thu, 10/08/2015 - 22:25 | 6647468 Citxmech
Citxmech's picture

I think that you're missing the point.

Thu, 10/08/2015 - 11:35 | 6644449 Thoreau
Thoreau's picture

Yes, by all means: Please ban the world reserve currency for the sake of the world.

Thu, 10/08/2015 - 11:17 | 6644371 Immortal Flatulence
Immortal Flatulence's picture

EU vs USA vs Asia... does not matter. My take on our future, yes, cash will be banned globally. The gov may induce a crisis, as they are doing now to get "all digital" to become reality. They'll sell it to the public by saying "everyone has to pay their fair share of taxes, and cash allows for cheaters." This willl be done after fabricating a media freazy on big tax cheats (my guess anyway). My take on the mark of the beast "666" is all number, six rows of six digits, likely in digital format as some current or new implanted chip. 6^6^6 give an enormous number of permutations, enough to give every person ever born their own unique id code.

Complete financial control? Totalitarian state? Yes, it's on it's way.

And it was predicted long befor I was born..

Revelation 13:16-17

16 And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:

17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.

 

Thu, 10/08/2015 - 11:03 | 6644306 the grateful un...
the grateful unemployed's picture

negative interest rates will really get the ball rolling.. one thing you can do is prepay your bills, put money in your credit card account, etc etc. so why did they go to the trouble to make these highly secure curriencies if they didnt want people to use them. actually printing a lot of cash would be inflationary which is their policy.

Thu, 10/08/2015 - 10:45 | 6644227 Argenta
Argenta's picture

So what are we saying now...hoard cash and metals?  We continually equate fiat to toilet paper and so forth, but if there is an outright ban on cash transactions wouldn't that make cash more desirable than metals?

-Argenta

Thu, 10/08/2015 - 13:30 | 6645111 Citxmech
Citxmech's picture

Not if it's no longer legal for trade.  

Thu, 10/08/2015 - 15:33 | 6645758 whotookmyalias
whotookmyalias's picture

First of all legal for trade is much different than a medium of exchange agreed upon by 2 parties.  Second, oh never mind, that's all I've got.

 

edit - oh, wait, I remember now.  Stocking up on TP is also a good idea and may be a very valuable barter item in the future.

Thu, 10/08/2015 - 09:50 | 6643972 NoBillsOfCredit
NoBillsOfCredit's picture

The government in the USA cannot prohibit the use of paper FRNs between private individuals. Unless they remove all of them from circulation. Then we just use what we want to. We are not Europe where rights are not recognized.

Thu, 10/08/2015 - 09:25 | 6643840 Deathstar
Deathstar's picture

Oh, it's phoenix again with their scare and push a book scheme again.

This is the 4rd time I know of this sort of tripe from them over they years and none of their BS has come true.

Take this with a grain of salt.

It's simple and you don't have to click on their website....
..and i'm not out to make a buck or client.

GOLD BITCHEZ!

Thu, 10/08/2015 - 13:51 | 6645246 boogerbently
boogerbently's picture

We have outlined the secrets to the universe......the first 1000 copies are FREE !!!!

Thu, 10/08/2015 - 08:20 | 6643499 Heiman Van Rock...
Heiman Van Rockerchild's picture

The central banks are a criminal enterprise, and have hijacked the government

Thu, 10/08/2015 - 08:10 | 6643462 roadhazard
roadhazard's picture

Not in your life time.

Thu, 10/08/2015 - 10:15 | 6644094 Citxmech
Citxmech's picture

The issue isn't the lack of physical cash - the issue is that they can't allow folks to take their money and leave the casino.  THAT is what would crash the system.

Thu, 10/08/2015 - 07:03 | 6643348 Bemused Observer
Bemused Observer's picture

They haven't 'banned cash'...people just haven't been asking for it.

They are up shit creek if people suddenly start. The Mother of all Bank Runs. And God help the poor bastard who tries to tell them their money is "digital and safe" when they get it in their heads otherwise. They will want more than promises.

Yeah, TPTB have not banned cash, regardless of what they may think. The only thing holding currencies up is what remains of trust. Not just trust in the money, but also the whole system holding it.

2 very weak foundations, in my opinion.

Thu, 10/08/2015 - 06:48 | 6643328 ToSoft4Truth
ToSoft4Truth's picture

Government has been cashless.

Thu, 10/08/2015 - 06:41 | 6643321 nnnnnn
nnnnnn's picture

it will only create a black currency. comparable to a black market

Thu, 10/08/2015 - 06:58 | 6643335 FinalEvent
FinalEvent's picture

Perfect stom for bitcoin...

Thu, 10/08/2015 - 09:30 | 6643881 Deathstar
Deathstar's picture

Hey, if you were in Nepal and in an area with no internet with people that have the mindset "Money talks, BS walks"

AND you were in dire need of supplies and medical attention...

Which do you think they will accept before you bleed out?

A piece of paper with a bunch of random numbers and letters

OR

gold coins.

(Before you answer... think in terms of reality by placing your rational, logical thinking caps on your noggin')

Thu, 10/08/2015 - 12:22 | 6644687 Skiprrrdog
Skiprrrdog's picture

That is why whenever I travel to a foreign country, I always take a goat or two to trade/barter with...

Thu, 10/08/2015 - 10:18 | 6644114 crazytechnician
crazytechnician's picture

Where in Nepal don't you get cellular / Internet acess ?

Thu, 10/08/2015 - 11:58 | 6644567 Grosvenor Pkwy
Grosvenor Pkwy's picture

They need Internet access in Nepal so they can continue to collect on their fake earthquake charity scams.

Thu, 10/08/2015 - 10:08 | 6644056 El Oregonian
El Oregonian's picture

I'd be very careful there. Make sure you have one bad bodyguard while you are getting that medical attention. I know those gold coins can bring out unscrupulous characters, even doctors.

Once they see how you plan on paying, they can figure out that there is probably more of those from where they came from.

Watch your 6 when returning home...

Just in case...

Just say'in.

Thu, 10/08/2015 - 15:28 | 6645737 whotookmyalias
whotookmyalias's picture

I think the most important question at this point is "why am in Nepal?"  Am I there willingly? Was I kidnapped? Was I beamed there?  Was I in a coma and mysteriously woke up in Nepal needing medical care?  I am so confused.

Thu, 10/08/2015 - 07:04 | 6643351 Latitude25
Latitude25's picture

Bitcoin is digital dipshit.

Thu, 10/08/2015 - 07:15 | 6643371 FinalEvent
FinalEvent's picture

Same digital shit you are using right now?

Oh no, of course, it's different.

Thu, 10/08/2015 - 08:41 | 6643607 Baa baa
Baa baa's picture

Careful how you throw the word "You" around.

Thu, 10/08/2015 - 08:43 | 6643603 Baa baa
Baa baa's picture

oops

Do NOT follow this link or you will be banned from the site!