The War On Paper Currency Begins: ECB Votes To "Scrap" 500 Euro Bill

Tyler Durden's picture

Update: in case there was any doubt about the ECB's true intentions, we just got the official "denial":


Translation: the ECB action is only about reducing physical cash, some 30% of it to be specific.

* * *

The first shot in the global war on cash was just fired, by none other than the ECB, which moments ago Handelsblatt reported...

... and Bloomberg confirmed - ECB COUNCIL VOTES TO SCRAP EU500 NOTE: HANDELSBLATT - has voted to scrap the second highest denominated European bank note in circulation:

... after the CHF 1000 note.


So what, big deal, eliminate it. The people will still have 5, 10, 20, 50, 100 and 200 euro bills right.

As we wrote just one week ago, the answer is not that simple at all. Recall that the €500 note is the second highest currency denomination in G10, after the CHF1,000 note. More importantly, the total value of €500 notes in circulation amounts to €306.8bn and has been rising as shown in this BofA chart:


Furthermore, as a share of the value of total euros in circulation, the €500 note is the second-highest, after the €50 note.


This is what we said last Thursday:

In other words, if overnight the €307 billion worth of €500 bills were eliminated, the notional value of the entire amount of European physical currency in circulation would decline by 30% to €700 billion!


And there you have it: while it may not be banning all European cash outright, we are confident the ECB would be delighted if one third of it was to start, while pretending to be fighting financial crime, terrorism, corruption and drug dealers. 


Of course, what Europe would be truly doing is setting the scene for ever more aggressive NIRP, and by removing the highest denomination bank notes, it would make evading negative that much more difficult and costly (albeit would certainly favor gold).

That's not all: as Bank of America pointed out, abolishing the €500 note may even end up even weakening the European currency:

... we would expect that abolishing a note that represents almost 30% of the total Euros in circulation would be negative for the currency, keeping everything else constant. The share of the €500 note in the total value of Euros in circulation has been falling since 2009 and this has coincided with a weakening Euro in real effective terms. This is not evidence of causality, but we should not ignore it.


If we are right, the Euro will weaken, primarily against the USD and the CHF. The USD is the most liquid currency and we would expect it to capture a large share of the drop in the demand for the Euro as a store of value. However, the CHF could also benefit, having the largest note denomination in G10 economies. Indeed, the CHF1000 note is already very popular, representing more than 60% of the CHF  notes in circulation, unless the SNB follows the example of the ECB and also abolishes the CHF1000 note.

BofA is right, unless of course, in this global race to the bottom where every central bank tit has other central bank tats as a direct response, first the SNB "scraps" the CHF1000 bill, and then the Federal Reserve follows suit and listens to Harvard "scholar" and former Standard Chartered CEO Peter Sands who just last week said the US should ban the $100 note as it would "deter tax evasion, financial crime, terrorism and corruption."


Go ahead and cut, then: after all who really needs the Benjamins, right? Well, here's the thing:

Chart of value of currency in circulation, excluding denominations larger than the $100 note. Details are in the Data table above.

As the Treasury chart above shows, $100 bills account for for $1.08 trillion of the $1.38 trillion total in circulation. So should the Fed react to the ECB's "scrapping" of the €500 bill, which accounts for 30% of the value of currency in circulation, then the Fed would respond in kind, by eliminating 78% of all paper currency in circulation by value.

Not a bad way to launch a global ban on paper currency ahead of a global NIRP regime, and all, of course, in the name of fighting "tax evasion, financial crime, terrorism and corruption."

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KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) Feb 15, 2016 9:56 AM

It was headed for scrap anyway, they just did it a little sooner.

Took Red Pill's picture

On this President’s Day, let us heed the advice of some of our former presidents;


“God forbid we should be twenty years without a rebellion. What country can preserve its liberties if the rulers are not warned from time to time that their people preserve the spirit of resistance?”

        — President Thomas Jefferson (1787)


“This country, with its institutions, belongs to the people inhabit it. Whenever they shall grow weary of the existing government, they can exercise their constitutional right of amending it, or their revolutionary right to dismember, or overthrow it.”

       — President Abraham Lincoln (Inaugural Address, 1861)


“The right of Revolution is an inherent one. When people are oppressed by their government, it is a natural right they enjoy to relieve themselves of the oppression if they are strong enough, either by withdrawing from it, or by overthrowing it and substituting a government more acceptable.”

       — President Ulysses S. Grant (1885)


“President Kennedy said, ‘Those who make peaceful revolution impossible, make violent revolution inevitable.’



KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) Took Red Pill Feb 15, 2016 9:58 AM

This country is well on it's way back towards a monarchy... A queen currently sits on the throne, but will be replaced by a king in November.

greenskeeper carl's picture

Listen guys, quit your bitching. We all have to make sacrifices. Its for the children.

onewayticket2's picture

and when a e500 note buys only a loaf of bread, the war will be won.

NoDebt's picture

We're a long damned way from the Trillion Dollar Coin idea now.

KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) NoDebt Feb 15, 2016 10:42 AM

A Trillion Dollar Euro coin... Now wouldn't that be sumpin!

Orémus's picture

Well if they supress bank notes people will look for alternative currencies

AllThatGlitters's picture

The war on real money began too. But this is nothing more than return fire, so we're getting a little pullback.

The recent rally in gold and silver was the first volley. Gold and silver are currently reloading.

Change this live silver chart to a weekly chart:

FinalEvent's picture

See? There is no inflation god dammit!


DutchR's picture

Nice touch with the running people on the €500 bill, I go for the metal value of the €0.10 if anything else..

Citxmech's picture

This move, from the publishing of that artical by the Harvard wanker, and this vote was FAST.  

Things must be really bad behind the curtain in Bankster-Land.

If don't hold PMs yet (or enough) I think i might be putting that as one of my top priorities for my dry powder. . . 

Durrmockracy's picture
Durrmockracy (not verified) Citxmech Feb 15, 2016 1:30 PM

It's just a game of "Fantasy Fiat" anyway... you can cut zeros off the bills, you can add numbers, replace dead prez heads with ones from Sheople Magazine!  I've got a Kanye $01505 Dollar Bill!

It's fun for the whole family!!

Four chan's picture

they will need a 5000000000 euro note when this is over, for a pepsi.

new game's picture

a kardashian bill, what denomination? 3 dolla is my vote...


The Alarmist's picture

So you scrap the €500 note and $100 note ... do they really think the bad guys, or anyone else for that matter, is simply going to sit on a pile of worthless notes or use them to heat their homes? No, these notes are going to come home to roost almost overnight in the inevitable exchange window that will have to be allowed.

Weimar redux ... world-wide!

DutchR's picture

The biggest criminals use what currency...

Citxmech's picture

It cracks my ass up that one of the justifications for eliminating cash is to "inhibit corruption" when the real reason is to facilitate the bankster's ability to fuck us ever more completely. 

thesonandheir's picture

They should be scrapping the penny not the high notes!

DutchR's picture

Nordic gold vs Paper

You do the math

Durrmockracy's picture
Durrmockracy (not verified) thesonandheir Feb 15, 2016 1:31 PM

Why?  If you don't have 100 pennies you don't have a dollar, do you?

TxExPat's picture

I may be out of date, but the last time I looked, the copper value of 100 pennies was more than a Dollar...


noless's picture

Pennies after 1982 are zinc, not copper.

DutchR's picture

pennies / dollars you lost me there but paper / metal

Choose wisely

IPA's picture

It doesn't matter if the ban it. The 500$ note will retain its intrinsic value

g speed's picture

there's a big difference between banning it and stop issuing-------they will issue a new bill just like the new denominated dollars a while back---its to undercut the counterfeiters IMHO---

fear mongering at its finest--

KnuckleDragger-X's picture

The EU has picked the perfect time to fuck up even more, since Europe just isn't collapsing fast enough.......

J Jason Djfmam's picture

Anyone got change for a $1 Trillion coin?

KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) greenskeeper carl Feb 15, 2016 10:11 AM

That's what lambs blood is for.

ejmoosa's picture

Yes, but we are not sacrificing for your children.  We are sacrificing for theirs...

DavidisDawei's picture

Great quotes, but 2 out of 4 were assasinated and Grant helped to defeat the South, which was the end of States' rights and the rise of an over reaching Federal government.

The US citizen of today will go along to get along - and those in power know it.  In fact, the typical "American" now screams" for more government control and protection.

Baa baa's picture

Not in this neck of the woods... Oh yeah....Sarc?

Gold Pedant's picture

“This country, with its institutions, belongs to the people inhabit it. Whenever they shall grow weary of the existing government, they can exercise their constitutional right of amending it, or their revolutionary right to dismember, or overthrow it.”

       — President Abraham Lincoln (Inaugural Address, 1861)


“The right of Revolution is an inherent one. When people are oppressed by their government, it is a natural right they enjoy to relieve themselves of the oppression if they are strong enough, either by withdrawing from it, or by overthrowing it and substituting a government more acceptable.”

       — President Ulysses S. Grant (1885)


You do know that 620000 souls perished during the presidential and military reigns of Lincoln and Useless S. Grant as the CSA was fighting for its independence from tyrannical oppressors, right? You realize that Lincoln was saying that they can fight but that the government will fight back to preserve the union, right? You realize that the North destroyed the South's economy, burned the place down to the ground, instituted sociopolitical chaos, and left a giant mess that is exploited to this day, right? The worst thing that ever happened to the South in the nineteenth century was that Lincoln refused the principles of self-determination. The second worst thing for the South was that Lincoln was assassinated. He was one of the few things that would have at least moderated the chaos. And history was rewritten to make him a martyr while ignoring most of the reality about the man.

Greenie's picture

Gold, you beat me to it regarding Lincoln's quote.  Note that his quote  was made during his Inaugural Address in 1861. As the Civil War progressed, he changed his views regarding the right of people to "dismember" their government.

"My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that. What I do about slavery, and the colored race, I do because I believe it helps to save the Union; and what I forbear, I forbear because I do not believe it would help to save the Union. I shall do less whenever I shall believe what I am doing hurts the cause, and I shall do more whenever I shall believe doing more will help the cause." The Collected Works of Abraham Lincoln edited by Roy P. Basler, Volume V, "Letter to Horace Greeley" (August 22, 1862), p. 388.

False_Profit's picture

in a cashless society, time is the currency...this is an effective way to control the size of the "older" demographic as well...





dimwitted economist's picture

i think i might go buy some more silver today.. just for the hell of it.

Baa baa's picture

I plan to do same in a few weeks. Hope I'm not too late.

SuperRay's picture

It's bargain hunting time in PM's.  Besides, i get a kick out of buying PM's because i'm telling these sociopathic bankers to go fuck themselves.  It a world where we have taxation without representation, not much more we can do.

Moe Howard's picture

It's a way of voting that actually does matter.

XAU XAG's picture

of course, in the name of fighting "tax evasion, financial crime, terrorism and corruption."



Guess what those involved in tax evasion, financial crime, terrorism and corruption will replace thease large notes with!


Long pm's

DavidisDawei's picture

Yes and don't forget another lie to create fear...

get rid of "paper" money to eliminate transmission of disease/virus 

It is time to take away the power of all bankers, lawyers, politicians, lobbyists and hit the reset button

countryboy42's picture

So, how am I supposed to snort blow off a hookers ass with out a $100 bill? Granted, a straw from McDonalds works better, but it is just not as classy.

Kirk2NCC1701's picture

That's because all the criminal acts (tax evasion, financial crime, terrorism and corruption, perversions, war crimes, etc) are ONLY permitted, if you've paid your Dues to DC lobbyists and its ploticians.  Then virtually anything goes.

Shakespeare (and Napoleon, quoting the Bard) were right:  "First thing we do, is kill all the lawyers".  Then, after a period of time, when Natural Law has re-established itself, we can begin anew with a new legal system, from the ground up.  It's analogous to an old house that keeps getting repainted and keeps getting cosmetic changes, when it really needs the Wrecking Ball and Bulldozers, and plans for a brand new house.

That's what happens, when you give the vote to those who (a) don't own property, (b) have a low IQ, (c) are semi-literate and ill-informed, or (d) of a foreign Species, with an incompatible Agenda and Values.  "Tolerance", my ass!  

The Founders never foresaw these things, and have thus left holes that have been exploited, and have brought us to the present era of Democratic decay, while allowing for the return of the Feudal Crime Lords.

open-range's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...

Dragon HAwk's picture

Doesn't drinking piss on a web cam make you sick?