Harvard Economist Demands Ban On Big Bills To Make It "Harder On The Bad Guys"

Tyler Durden's picture

Last week, we were dismayed - although not entirely surprised - to learn that Germany’s Social Democrats have proposed a €5,000 limit on cash transactions and the elimination of the €500 note.

The rationale: if you’re paying in cash for something that costs more than €5,000, you’re probably a terrorist or a “foreign criminal.”

Of course that’s nonsense but it’s a reflection of a changing world.

Angela Merkel’s junior coalition partners are hardly the first officials to suggest that cash should be phased out. In fact, the “ban cash” calls have been getting louder for at least a year as everyone from Citi’s Willem Buiter to economist Ken Rogoff to Norway’s largest bank to Bloomberg’s editorial staff demands the abolition of the barbarous paper fiat relic that serves as a check on central bankers’ ability to go “full Krugman.”

You’re reminded that cash - as worthless as it may ultimately be - does serve a purpose.

It’s a check on Keynesian insanity in that it sets a very real lower bound on interest rates. If rates are too punitive (that is, if they’re too negative), savers will simply pull their cash out of the bank and put it under the mattress. That’s inconvenient for policy makers who have been thus far unable to resuscitate global growth and trade.

Put simply: if you ban cash, you can centrally plan the the entire economy by forcing people to spend. You either spend it, or watch as deeply negative rates eat away at your savings.

Of course policy makers and the influential economists who inform their decisions won’t tell you that. They’ll say it’s all an effort to fight crime. On Monday we get the latest cash ban call, this time from Peter Sands, the former chief executive officer of Standard Chartered who’s now an academic at Harvard Kennedy School. “High denomination banknotes such as the 500-euro ($556) note and the $100 bill should be eliminated to make it harder for criminals, terrorists, tax evaders and corrupt officials to transfer funds,Bloomberg writes, referencing a new paper by Sands entitled “Making it Harder for the Bad Guys.”

Here’s what Sands has to say about high-denomination bank notes:

“High-value notes are the preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved. They play little role in the functioning of the legitimate economy, yet a crucial role in the underground economy. The irony is that they are provided to criminals by the state.”

So there you go. The latest in a string of verbal attacks on the only thing that stands between central bankers and hugely negative rates. First it will be 100s that are banned, then 50s, then 20s, and so on until individuals' economic autonomy is completely stripped away and make no mistake, it has very little to do with fighting "terrorism" and "crime" and quite a bit to do with giving officials the leeway to conduct still more moneatry policy experiments.

After all, the Kurodas and Draghis of the world are very nearly out of options. When everything that can be monetized without completely breaking markets has been monetized, and when rates become negative enough that banks can no longer avoid passing the cost on to depositors, it's either admit that post-crisis policies have failed, or go digital. 

And somehow we don't see central bankers suddenly delivering a mea culpa.

Full paper


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Soul Glow's picture

Yeah because Harvard is where the good guys come from.

Truther's picture

Ban the Harvard Mother Fuckers from existence instead.

Leopold B. Scotch's picture

First hang the lawyers. Then the Academia Economists. (aka, the politician and central bank enablers)

pods's picture

The thing that scares me the most about all of this is NOT that there are control freaks that wish to impose this upon us.
It is the vast herd of commoners that will support this.

That is where my anger resides.  


Ignatius's picture

"It is the vast herd of commoners that will support this. That is where my anger resides"

This is why the elite foundations took control of the schools.

Why propaganda?  Because it works.

TerminalDebt's picture

Oh shit, does this rule out the trillion dollar coin then?


manofthenorth's picture

I have been trying my best to give them all the big bills back that I can over the last 10 years as I have shifted savings to silver.

Digital FRNs are no problem at the moment as I can turn those into silver even faster than paper ones.

Go ahead and ban them you dirty pig fuckers, the sooner we get rid of your trash fake money the better !

Captain Debtcrash's picture
Captain Debtcrash (not verified) manofthenorth Feb 8, 2016 1:51 PM

They lose all credibility when economists bring up banning cash for law enforcement reasons.  If its to allow for significantly negative rates, say it.  If it’s for law enforcement reasons, let someone in law enforcement discuss cash bans.

If people that were adults during the great depression were around this talk wouldn't be looked at too kindly.  

Herd Redirection Committee's picture

We don't need more laws, Mr Economist, sir!  We need proper enforcement of EXISTING laws.  Oh, thats impossible because of wealth and political connections?  OK!  Fine.  Admit it, and we move on.  But don't pee on me and tell me its raining.  We DON'T NEED MORE LAWS.

mtndds's picture

Fuck you Peter Sands.  You sack of shit.

The9thDoctor's picture

It's funny they consider a US $100 bill "a big bill". Have these ivory tower academics ever gone grocery shopping in the last quarter century? It's well over $100 to make a trip. What about the millions of Americans who cash their checks because traditional banks wont allow them to open an account? I've used check cashing myself way back when. You get $100 bills.

Besides, the Fed already has banned big bills any way. We used to have $500, $1,000, $10,000 and even drumroll $100,000 denominations. Thank Nixon for his executive order to take those existing bills out of circulation.

The way groceries and even apartment rents are going nowadays, we should be reintroducing the $500 bill.


Theosebes Goodfellow's picture

~"Harvard Economist Demands Ban On Big Bills To Make It "Harder On The Bad Guys""~

If you want to really make it hard for the "bad guys", you'd audit the Fed, Fort Knox and re-institute Glass-Steagle. It's amazing that anyone gives these asshats paychecks, much less Harvard.

Tarzan's picture

That's the thing, they're not trying to make it harder on the "bad guys", we live in a backward world where right is wrong good is bad and bad is good.  Where the best play is not to play and those who do fair best by doing the opposite of the "market experts".

We the people are "bad guys"

nuubee's picture

If they ban cash, then we have essentially come full circle on the notion that "gold and silver are money and all else is credit."


Essentially, you won't have a checking account in a cashless world, you'll just have a positive credit balance that is subject to change.

Oracle of Kypseli's picture

Lately, I have been using a $9,500 note for my illicit activities. (a 250gr. gold bar)

Doña K's picture

I bet you get change in silver maples

illyia's picture

Chipping away at it... Piss me off!!!

BidnessMan's picture

They don't care. EBT taken almost everywhere. Noticed all the signs?

mvsjcl's picture

Notice that picture in his report,  "US$207m drug cash seizure" those bills look remarkably "laundered," as in fresh from the bank.    

Baby Bladeface's picture
Baby Bladeface (not verified) Captain Debtcrash Feb 8, 2016 3:01 PM


They lose all credibility when economists bring up banning cash for law enforcement reasons."

Is funny about US $500 FRN. In 1969 FRB begins removing from circulation FRNs denominationed US $500, US $1000, US $5000, US $10000 for lack of need. US $100 FRN, and maintained because of need, in 1969 gave greater value on adjusted inflations than today gives US $500.

US Treasury site tells that "the purpose of the United States currency system is to serve the needs of the public and these denominations meet that goal".


If this Harvard economist guy could be honest (yes, yes, maybe when Jesus wakes up) and he would be telling is needed now the US $500 FRN again.

Dig Deeper1's picture

Probably.  Need to short wheelbarrows,too.

Dr. Spin's picture

Fuck the "Ivy League".  I'm buying torch and pitchfork futures...

zeronetwork's picture

Ban on big bills, no way. CIA will never allow this.

Manthong's picture

The Keynesian label for these folks is only a veneer to conceal their true nature

They are what is recognized in academia as “Cultural Marxists”.

The funny thing is that they actually are fascists following  communist ideals.

The problem that in most of the Western world, so are most in government, economics, academia, climate science… name just about any pursuit nowadays.


Herd Redirection Committee's picture

I didn't 'get' the whole 'Cultural Marxism' angle, until I realized a massive part of that 'belief system' is 'fallibilism'.  They can lie to people (and themselves) without shame, because " it is an admission that, because empirical knowledge can be revised by further observation, any of the things we take as knowledge might possibly turn out to be false."

You will see this ALL AROUND YOU, in the media, in particular. 


*BLACK COFFEE: Are you at risk?*


*EGGS:  What you didn't know*

*Try this NEW method that experts are raving about*  (which just means, hey, we know its bullshit, but this bullshit might work for you, so we are going to bullshit you, without any qualms about doing so, whatsoever.  Hey, its OK to be wrong, as long as you are justified in your wrongness!  Its OK to lie, as long as you are doing it 'for a good cause'!)

Manthong's picture

Samo Samo with Islam…  maybe the shared ideologies is why we are being inundated with them.

One would have to be completely oblivious (most of the populace) to not see what is being done to us.

BTW, but that has been the goal of most education since the Frankfurt School precepts were forced into the system.

“The founding of the Institut marked the beginning of a current of “Marxism” divorced from the organised working class and Communist Parties, which over the decades merged with bourgeois ideology in academia.”


Herd Redirection Committee's picture

In Cultural Marxism, the 'scientific method' actually serves no purpose.  Because of 'fallibilism' you can just argue whatever you feel will be convincing (logical fallacies are welcome, as long as they are hidden, and help to persuade the mark).

Tarzan's picture

Cornered animals are notoriously unpredictable, viciously bestial...

Corner the world's Oligarchs, Machiavellian nuts, and there is nothing they will not resort to, to "save the children".

In Fiat world, population control, moar war, is Jubilee

"maintain humanity under 500,000,000"

Think it's too crazy, too outlandish? They would never.....

El Oregonian's picture

Yeah, and there should be a ban on big smart idiots with crystal, yet fragile brains devoid of common sense and wisdom.

12357111317's picture

"Just so long as I can keep my job".

Antifaschistische's picture

let's go with his logic......and get rid of ALL paper (cotton) money, and use coins.  I'm okay with a $50 coin. (how about at least making it a copper/silver clad coin like the 1965-1969 kennedy 1/2 dollar) 

5 coins - $10,000 (gold/copper clad) $50 (silver/copper clad),  $20 (silver/copper), $10 (solid nickel), $1 (solid copper). 

The $10,000 will be used for international trade settlements. ($1 million dollars worth takes up about the space of two large Snickers bars)

we can also dump the penny, nickel, dime and quarter while we're at it since the counterfeiters have rendered them meaningless.

--but this will never happen, because the Washington insiders could never leave the country with a suitcase full of coins without being detected....and $100,000 in $50 (clad) coins starts to get very heavy.

I woke up's picture

Where did all these "bad" guys come from all of a sudden? It's a stupid argument to support a cash ban

nyse's picture

Just more control over us all. Surprised?

Kirk2NCC1701's picture

He got a big Bursary from a Mystery Donor, so you guess what his views are on all matters of the Deep State.

Lynx Dogood's picture

It's a Clinton hit piece...

Haus-Targaryen's picture

Not all lawyers have sold out.

This is just an outright power-grab.  The average idiot thinks this is to get the "bad guys" until he realizes what NIRP + no cash does to your spending power. 

I shudder to think what the future holds.

centerline's picture


Instant new taxes - no warning. 

Burden of proof being completely shifted once and for all onto the little guy.

Every aspect of one's life being subject to scrutiny and chance of error.



Kirk2NCC1701's picture

What centerline said above, plus...

Real-time tracking of all financial transactions, thus tracking the Person in real time.  Whether it's via the meta-data of their phone, credit/debit card, or whether it's via bio-chips from Intel that we'll get implanted.  

And, as always, they adoption of said Implants will be promoted for "Safety & Convenience", until they are ubiquitous.  After that, Mandatory Implants will arrive, again under the usual fake pretexts as always in a fascist regime.


css1971's picture

They can have geo coordinate tags of all transactions. You can then flip directly to security cams in the vicinity which are similarly geo-tagged, and by vicinity I mean in store. Cell phone pings will keep you within a couple of hundred metres when they're moving.

There's nothing technologically preventing this now. It's just a matter of organisation.

If they keep logs, they could be looking back at where you've been. Potentially a long way back if the logs are kept for a long time. Do you remember where you've been for the last year? No? The NSA do.

CheapBastard's picture

Well, at least he's not out protesting the name of a building or screaming for "moar muscle" to help him squash the First Amendment which is all the fad on campus these days.


After all, USA college kids are so 'oppressed.'

Lumberjack's picture
9 Criminals Who Went to Harvard







    Enron president committed conspiracy, making false statements, insider trading, and securities fraud


    Killed George Parkman in his Harvard lab in 1849


    Fugitive Czech financier facing federal bribery charges

  • 5. CHAS LEE

    Embezzled more than $100,000 from the Jimmy Fund


    Boston aristocrat and financier served time in Sing Sing for embezzlement


    Strangled his maid and lived out the rest of his days in McLean Hospital


    Pled guilty in 2002 to embezzling nearly $100,000 from Hasty Pudding Theatricals Note: the list does not have the names of hundreds who gat away with it, like. Larry Summers ) Blood Diamonds, Wanted in Russia, RICO issues in the US. Mikheil Saakashvili (Still wanted in Georgia but hiding in Ukraine)...

Kirk2NCC1701's picture

Well, it's a good thing that Bill Gates is not a criminal.  :-)

Herd Redirection Committee's picture

I knew Bill Gates got away with large-scale piracy, copyright infringement, outright theft, breaking monopoly laws, etc.  But I didn't know until recently, that his daddy was a lawyer!  And that his daddy's law firm was Microsoft's law firm!  LOL.  No wonder nothing they did was illegal, until they were already a what, $600 b company (back in 99)?

True Blue's picture

Say what you want about Bill Gates, it took real intestinal fortitude to name your company after the two most common adjectives women used to describe you in bed; micro and soft...

For a long while I have wondered if it is called "Windows" because it is something people peep through to watch your private life.

Squid Viscous's picture

at least the guy crushed by the crane in Tribeca was a Harvard BS/ MS/ etc.

"he was an absolute angel" said the family rabbi...

yeah right, if you believe that I have another crane to sell you

MANvsMACHINE's picture

I've been out of town so I'm catching up but I heard about the crane guy getting crushed.  I didn't see anything about him being a banker.  At which bank did he work?