Why Elites Are Winning The War On Cash

Tyler Durden's picture

Authored by James Rickards via The Daily Reckoning,

Visa recently unveiled its own offensive in the war on cash. Visa is offering certain merchants a $10,000 reward if they refuse to accept cash in the future.

Not surprisingly, Visa’s competitor is also part of the war on cash. Mastercard is increasing its efforts to encourage merchants to refuse cash. Here’s Bloomberg, quoting the CEO of Mastercard:

“Mastercard Chief Executive Officer Ajay Banga has been one of the most ardent supporters of ditching paper currency in the U.S. The 57-year-old first declared his war on cash in 2010.”

These private efforts by Visa and MasterCard exist side by side with official efforts to eliminate or discourage the use of cash coming from governments in India, Australia, Sweden as well as the United States.

These efforts are always portrayed in the most favorable light. Private parties talk about convenience and lower costs. Governments talk about putting pressure on tax cheats, terrorists and criminals.

Governments always use money laundering, drug dealing and terrorism as an excuse to keep tabs on honest citizens and deprive them of the ability to use money alternatives such as physical cash and gold.

But the so-called “cashless society” is just a Trojan horse for a system in which all financial wealth is electronic and represented digitally in the records of a small number of megabanks and asset managers.

Once that is achieved, it will be easy for state power to seize and freeze the wealth, or subject it to constant surveillance, taxation and other forms of digital confiscation.

The war on cash has two main thrusts.

The first is to make it difficult to obtain cash in the first place. U.S. banks will report anyone taking more than $3,000 in cash as engaging in a “suspicious activity” using Treasury Form SAR (Suspicious Activity Report).

 

The second thrust is to eliminate large-denomination banknotes. The U.S. got rid of its $500 note in 1969, and the $100 note has lost 85% of its purchasing power since then. With a little more inflation, the $100 bill will be reduced to chump change.

Last year the European Central Bank announced that they were discontinuing the production of new 500 euro notes. Existing 500 euro notes will still be legal tender, but new ones will not be produced.

This means that over time, the notes will be in short supply and individuals in need of large denominations may actually bid up the price above face value paying, say, 502 euros in smaller bills for a 500 euro note. The 2 euro premium in this example is like a negative interest rate on cash.

The real burden of the war on cash falls on honest citizens who are made vulnerable to wealth confiscation through negative interest rates, loss of privacy, account freezes and limits on cash withdrawals or transfers.

The whole idea of the war on cash is to force savers into digital bank accounts so their money can be taken from them in the form of negative interest rates. An easy solution to this is to go to physical cash.

The war on cash is a global effort being waged on many fronts. My view is that the war on cash is dangerous in terms of lost privacy and the risk of government confiscation of wealth. India provides the most dramatic example.

How would you like to go to bed one night and then wake up the next morning to discover that all bills larger than $5.00 were no longer legal tender? That’s essentially what happened in India not long ago.

The good news is that cash is still a dominant form of payment in many countries including the U.S. The problem is that as digital payments grow and the use of cash diminishes, a “tipping point” is reached where suddenly it makes no sense to continue using cash because of the expense and logistics involved.

Once cash usage shrinks to a certain point, economies of scale are lost and usage can go to zero almost overnight. Remember how music CDs disappeared suddenly once MP3 and streaming formats became popular?

That’s how fast cash can disappear.

Once the war on cash gains that kind of momentum, it will be practically impossible to stop. That’s why I’m always saying that savers and those with a long-term view should get physical gold now while prices are still attractive and while they still can.

Given these potential outcomes, one might expect that citizens would push back against the war on cash.

But in some places, the opposite seems to be happening.

A recent survey revealed that more than a third of Americans and Europeans would have no problem at all giving up cash and going completely digital.

Specifically, the study showed 34% of Europeans and 38% of Americans surveyed would prefer going cashless.

Notably, Germans are the most resistant to going cashless. Almost 80% of transactions in Germany are done in cash, and many Germans never use credit cards.

The German experience with hyperinflation after WWI and additional monetary chaos after WWII certainly plays a part in this resistance to the cashless society.

Incidentally, the German word for debt, schuld, also means guilt.

Other countries, such as Romania and Bulgaria, which have recent experiences with currency and financial crises, also tend to use cash extensively.

Of course, there’s no denying that digital payments are certainly convenient. I use them myself in the form of credit and debit cards, wire transfers, automatic deposits and bill payments.

The surest way to lull someone into complacency is to offer a “convenience” that quickly becomes habit and impossible to do without.

The convenience factor is becoming more prevalent, and consumers are moving from cash to digital payments just as they moved from gold and silver coins to paper money a hundred years ago.

But when the next financial panic comes, those without tangible wealth will be totally at the mercy of banks and governments who will decide exactly how much of your own money you’re allowed to have each day.

Just ask the citizens of Cyprus, Greece and India who have gone through this experience in recent years.

It will come to the U.S. soon enough.

Other dangers arise from the fact that digital money, transferred by credit or debit cards or other electronic payments systems, are completely dependent on the power grid. If the power grid goes out due to storms, accidents, sabotage or cyberattacks, our digital economy will grind to a complete halt.

That’s why it’s a good idea to keep some of your liquidity in paper cash (while you can) and gold or silver coins. The gold and silver coins in particular will be money good in every state of the world.

I hold significant portion of my wealth in nondigital form, including real estate, fine art and precious metals in safe, nonbank storage.

I strongly suggest you do the same.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
AlZo's picture

How is the government going to control how much of my crypto I can spend ? 

order66's picture

Well, eventually, you'll have to use THEIR crypto. All these digital currencies will eventually be banned except for the one backed by governments/banks.

AlZo's picture

Banning of non-governmental cryptos is going to be impractical and would require a simultanous and coordinated worldwide enforcement policy. 

Not happening.

Occident Mortal's picture

I don't buy the theory that banning cash makes it easy to seize wealth.

Any Joe Dipship can switch their wealth into all manner of value storing assets outside of "electronic accounts".

BlindMonkey's picture

Switching assets is extremely hard.  Let's say you want to convert cash into a physical commodity.  Gold is good but scarce enough to be controlled.  So you buy yourself $250,000 worth of copper.  Good luck getting that on a plane and leaving the country.

 

BTC for the win, baby.

Conscious Reviver's picture

Totally clear why people want cyrpto's to cross borders, but as long as it can be traded in FRNs it can be messed with. You can never bring more FRNs to the table than the house w/its printing press.

Longer term,  the barriers to entry for competing crypto's are minor compared to the value proposition.

Omen IV's picture

with no cash allowed -  banks will increase the transaction fees to the businesses and over time the prices will include a buffer charge as well so you wll be tagged 3-6% plus the negative interest rates  in the bank account

Blue Steel 309's picture

The same mechanisms that tax businesses can ban those businesses from accepting crypto. Then your crypto is no long an abstraction of the USD, but an actual money system with no value. Victory!

Conscious Reviver's picture

Taxing based on Visa transactions seems pretty straight forward. Crypto traffic is encrypted that's why they call them cryptocurrencies.;) They can and have subpoena'd exchanges to find people cashing out their recent BTC gains but that to me is different than a vendor who accepts cryptos. If they subpoena 'd the vendor's what? Searched his home and office?  Knew it when they saw it? Seems more difficult. No?

Bigly's picture

If there is that kind of lockdown, there will be a govt above country's govts. Essentially that NWO CAN dictate that....

Blue Balls's picture

The President, Senate, and Congres suck these bastards cock evey single day.

SoDamnMad's picture

 

 Senate bill 720 (which already has half of the senate and house traitors backing it) so that you can go to jail for 20 years and be fined 1 million for supporting the Palestinians

911bodysnatchers322's picture

That's just it they can't control crypto, so they'll do one of a few things

1) they'll lock down your devices to inhibit crypto traffic from leaving your devices, using the backdoors they've already put into every router, cell, computer and even into your intel processors

2) they'll take down the control grid using an EMP either in segments or en masse and blame it on Korea, btw, all your bitcoins are destroyed in this process, because while the grid is down they can put in various devices that add backdooring and other security injuries to crypto, meanwhile, you can't spend your crypto, and if you haven't paper-walletted your coin and it's on magnetic disks, it might be GONE

3) This is the biggest threat. NSA algos used by crypto have been cracked a long time ago, and PRISM is a big crypto cracker. Now here's the thing, PRISM is over 10 yrs old; They have been developing Quantum computers and are developing sufficiently high qbit processors to unzip the blockchain

Crypto is not quantum proof; and this is a big problem. In fact, I think crypto is a way to take away all underclass wealth by tempting them with crypto and greed

It's a trap. Ideologically it's great. But people really don't understand the technologies that our intelligence agencies have and are developing to a high degree, which are a huge threat to crypto

The only people then who are investing in crypto are taking a huge risk that their wealth will grow faster and oupace the capabilities of the untrustworthy deepstate to unzip the blockchain with advanced quantum technology

Juliette's picture

They will simply ban businesses from using cryptos, on a national scale, and "strongly encourage" other nations to do the same, i.e. bully them into compliance, just as they did with the ban on Cannabis 80 years ago or with FATCA etc.

Conscious Reviver's picture

If it is banned, some will abide by the ban, but if it is banned and not detectable, it will encourage others. Buying drugs with crypto is banned, but people do it.

BadLibertarian's picture

"if you haven't paper-walletted your coin and it's on magnetic disks, it might be GONE"

That's not how crypto works. The coin is never on only one person's device. The coin is on the blockchain which is replicated across thousands of nodes around the world. You can lose your *key* in the way you've described, but not your coin. Simple solution - memorize it.

If you have proof of the other claims you're making, I'd like to see it, because without that, it just sounds like dramatized conspiracy thinking.

ECDSA is probably vulnerable to quantum computing, but SHA256 is probably not. So no one is going to 'unzip' the blockchain using quantum computation. But they might be able to hack private keys which would allow funds to be stolen from the wallet addresses that are cracked. That won't all happen in one day though and certainly not across all cryptos. So someone could potentially one day cause a max exodus from one crypto into another, which would be bad, but I think that's the worst case scenario and still not very likely.

Conscious Reviver's picture

How would they "lock down your devices to inhibit crypto traffic from leaving your devices, "? How does one distinguish encrypted from nonencrypted traffic? Lot's of traffic is already encrypted according to some protocol, video for instance. If encrypted crypto is imbedded in some already encrypted traffic it seems it would be very hard to distinguish at the router for example.

Oliver Jones's picture

IOTA is quantum proof.

When that becomes a problem for other cryptocurrencies, I woud expect IOTA to become very popular. Even without this advantage, feeless transactions and scalable architecture (including snapshots, avoiding the need to replicate every single transaction since the genesis block) mean it will overtake Bitcoin eventually.

ReturnOfDaMac's picture

By turning off the power

tmosley's picture

You do realize that they need power too, right?

They also need the goods and services the private sector creates. Those goods and services won't exist without both power AND internet.

There is nothing they can do.

Mr. Magoo's picture

They dont have to, they already control everything digital whether you think so or not. If you are naive enough to believe they dont have back doors to everything on the net you have been duped

mickrussom's picture

Turn off the internet.

HRClinton's picture

Do YOUR part to help the Parallel Economy:

Barter, Cash, Crypto, PM.

Regardless of which you favor the most, your attitude should be: "The enemy of my enemy is ally."

Stand together, or perish divided.

SeuMadruga's picture

Such a brilliant comment does not deserve your disgusting alias...

HRClinton's picture

You're right. I plan to retire it at the 1 yr mark.

order66's picture

All digital currency is the natural evolution of money. Who cares what the reason is to remove cash? It's always been inevitable.

tmosley's picture

So upset that cash is changing form, and becoming formless so that it can't be stolen, nor inflated away.

Almost as if you had some sort of agenda.

GRDguy's picture

The only way the "elite" can steal your savings, without confrontation, is by lyin'.

Fundies's picture

The sheeple are going cashless. The sheeple are being lead to the slaughter.

Mena Arkansas's picture

Born into a Sikh family in Khadki, Pune, Maharashtra in India where his father, an army officer, was posted. The family's origin is from Jalandhar in Punjab. His father is retired lieutenant-general Harbhajan Singh Banga who is a decorated army general of Indian Army. He is also the younger brother of another well-known CEO M. S. Banga.

Banga grew up and schooled across India, successively in Secunderabad, Jalandhar, Delhi, Hyderabad and in Shimla, where he finished his schooling.

https://en.wikipedia.org/wiki/Ajaypal_Singh_Banga

Time to revoke his visa and send him back to the Punjab.

Go home and make india great again. Just leave us the fuck alone.

nathan1234's picture

People like him and Sunder Pichai have sold their souls to the devil. Useless cash, useless ATM.s , uslesss Bank account Security for each-  they try to take off what littlle we work and slave for. May their souls o back 4 milleniums.

wobblie's picture

Because stupid fucktard rank and file Liberals and Conservatives are falling for the bulshit that distracts them from things like this.

And then these idiots will support the very politicians who make that shit happen.

https://therulingclassobserver.com/2017/08/08/the-ten-commandments-of-th...

Solio's picture

Don't light that stogie with the frn's, the fumes from burning plastic can kill ya.

blue51's picture

I would rather , that countries go Khazar-less .

Rick Cerone's picture

Nazis will fall again.

tmosley's picture

Nope. Nukes prevent a gang-up like was done to Germany. If Nazis get control of a country with nukes, they won't be going anywhere. They are there until they are cast down by their own people, which they won't be, because the only way Nazis come to power is as a reaction to violent leftism, and the people don't want to be without a sheild against such reckless faggotry.

Rick Cerone's picture

They have been in control since 911, stupid.

Stormtrooper's picture

Not a problem.  Have a $200 dinner, offer cash and if they refuse legal cash for all debts public and private (videoed of course) you just got a free meal.  Don't notify them beforehand.  Same for any other services completed prior to payment.

Peanut Butter Engineer's picture

I offer cash discounts to off the book contractors and small home builders. Those discounts adds up big time, this just shows that cash is alive as long you give incentive to keep it so.

Rick Cerone's picture

But losing the war to promote pedophilia.

MEFOBILLS's picture

Cash today is only a physical representation of bank ledger money.  In England cash bills are still created by Treasury at seigniorage.  In the U.S. only coins are created at seigniorage.

In the U.S.. the banks acquire paper federal reserve notes at the cost of the minting.  Since it is paper, the cost is minimal.

So, cash represents the bank ledger.  Anybody not living under a rock, knows that private corporate banks, make new money (bank credit) upon loan creation.

The war on cash is so that banks can break through the zero bound.  That means they can charge negative interest.   

If you hold cash, then it is separated physically from banker double entry ledger.  Banksters are fearful that people will take out loans, then hoard cash.  Then pay off the loan with improved dollars, and pocket the difference as arbitrage.

The banksters also know that too many debt instruments are out there, and they don't want their fraudulent banking scheme to be taken from them.  So, negative interest rates are a way of inducing new future debtors to pay off old debts.  Their scheming is coming to an end unless all of the debt overhang is erased or paid off.

WallHoo's picture

Is a negative interest rate that bad?Or a death tax?

 

Arent we suppose to root for the best man,the most productive,(competition)?So why should a piece of shit offspring inherit the money(not wealth) of his father(excluding rent seeking properties)?And why should someone live at the backs of others once he made his big cash out.

 

What people seem to want is a lottery ticket,cash out and live in theire own big walls,instead of being productive and usefull till their lifes are over.

 

We had this talk and you have told me your ideas about silvio gisel.But i dont see how a sovereign system with bancor for international trade is gonna survive in a system that constantly concentrates wealth upwards...

 

The solutions to usury are always exports(hence mercantilism) or foreign investment(sic,this is the most laughable),budget deficits(buying time??) and misses style creative death(suicide)...And everybody knows that all this is to pay for the intertest...Well how about no interest.Just saying.

iLLivaniLLi19's picture

Meritocracy is racist and sexist, and Christians don't have the stomach to let the unproductive suffer their due consequence.

WallHoo's picture

Theres no reason for anyone to suffer,what is going on is misalocation of wealth(parasitism) all around the spectrum.Unless if you mean by unproductive the lazy then you are right.

 

It is true that meritocracy is hard to accept,too much hypocrisy to little resolve and lots of nerve is the way for many...

 

But hey "free market capitalism"

 

The argument that friedman had about death tax is totally retarted and can be debunked rather easily.

illuminatus's picture

The sheep are just so easy to fleece when they have a gun pointed at them.

illuminatus's picture

They are winning because they organize and they can pay for the enforcement of their decrees.

francis scott falseflag's picture

 

It will come to the U.S. soon enough.

 

It won't be coming to the U.S. until Congresspeople and Senators, and their owners,

figure out a way to buy legislation and pay bribes digitally, without briefcases full

of $100 bank notes.

Silver Savior's picture

The elite can shove cashless society up their asses. Not doing it. I pay cash only. It can also be gold or silver only too depending on the paradigm. The only time I couldn't use cash was to rent a car. I can do everything else in cash just fine. Cash is actually preferred by local merchants lots of times. 

moorewasthebestbond's picture

Ammo, booze, and food works in a pinch too!