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#1 2014-06-27 01:06:28

JulieW
Silver Stacker
From: Australia
Registered: 2010-10-14
Posts: 10,897

Killing Cash

Forerunning ZeroHedge on Spain's latest theft:

While Spain's economy minister Luis De Guindos proclaimed in the Senate today that bank deposits under EUR100,000 are "sacred"and that "Spanish savers should stay calm," Spain, it would appear, has changed constitutional rules to enable a so-called 'moderate' levy on deposits - as under previous Spanish law this was prohibited. For now, they claim the 'levy' will be "not much higher than 0%" and is mainly aimed at regions in Spain that have "made no effort to collect taxes" based on new revenue expectations.
http://www.zerohedge.com/news/2014-06-2 … k-deposits

Ann Barnhardt put these thoughts on her blog. Worth the full read:

Mario Draghi, chief psychopath of the European Central Bank went full-stupid on June 5th and announced mandated NEGATIVE INTEREST RATES on the excess reserves of European banks held and the European Central Bank  (which is the equivalent of the Federal Reserve Bank in the U.S.).  What does this mean?  It means that when a European commercial bank deposits excess cash reserves with the ECB, the commercial bank must PAY the ECB to store that money.  The commercial bank does not earn any interest income on that money, it in fact has a percentage of its deposit CONFISCATED from its account every month by the ECB.

As you can see in the article linked above and countless others, the publicly stated rationale behind this negative interest rate paradigm is "stimulus".  If the banks have to pay to store cash, they will instead lend their excess cash out to customers rather than have a percentage  confiscated every month.  This is utter bee-ess on multiple levels.  These top-tier central bankers know that negative interest rates have NOTHING to do with stimulus, and will, in fact, lead to exactly the opposite.  In fact, they know that the inevitable outcome of negative interest rates is the complete nationalization of the banking sector and total governmental control of all capital flows – which means today a CASHLESS ECONOMY.  Yup.  If you're interested, I'll walk you through the chain of events and differentiate between the propaganda that will be used to justify this evil and the reality of how the world actually works.

so to the point of the post:

Negative interest rates will be a cost to YOU is two ways.  First, the obvious: you will have a confiscatory tax levied on your bank deposits every month – that's what a negative interest rate is, sweetie.  It is a TAX on the PEOPLE, NOT the banks, because the banks will pass through to the customers the cost for the bank to store reserves at the Central Banks PLUS a margin.  Next, in an economy that is perceived to be relatively stronger or safer (of which the former United States is still at the top of the list because of its size, both economically and militarily) capital will flow IN to that economy, thus causing ASSET BUBBLES and CONSUMER PRICE INFLATION.  Been to the grocery store lately?  Looked into buying any farm ground lately?  Uh-huh.  So when consumer prices inflate, what do banks do to interest rates in order to cover the resulting increased risk in lending to consumers who now are having a much more difficult time making ends meet?  Yep.  They RAISE interest rates to borrowers.  And so therefore a negative interest rate at the Central Bank not only does not stimulate the economy, it increases the contraction and deepens the depression (because let's face it, if your economy is at the point that the Central Bank is going NEGATIVE on interest rates, honey, yo' ass is already in a DEPRESSION, not a recession).

Now to the big ugly.  Since the Central Bank is, despite any and all lying propaganda to the contrary, a government entity backed fully by the government and thus ultimately backed by the people, and since the Sovereign bond market is also a pure function of the government and thus ultimately backed by the people, when banks receive payment on both their capital borrowed from the Central Bank at negative interest AND receive a positive interest yield on their government bond holdings, that means that THE PEOPLE are PAYING THE BANKS… ON BOTH SIDES.

This is a backdoor way of confiscating collateral from the people and using it to RECAPITALIZE THE BANKS.  And also pay the bankster oligarchs' eight and nine-figure salaries and compensation packages, which, let's be honest, is their top priority. 

So now you may be thinking that this will cause a feedback loop to occur and rates will continue to be driven more and more negative.  Yes.  Absolutely.  Because the Central Bank will have to keep adjusting its rate down to stay "more negative" than the Sovereign bond and other money markets.  What happens when customer deposit rates go sufficiently negative so as to compel normal people to withdraw their cash from the banks and hold it in cash?  The answer is, the oligarchs will enact government policies outlawing the use of cash.  Think I'm crazy?  Have you tried paying your car insurance bill with cash lately?  Cash.  As in hundred dollar bills.  How about your phone or utility bill?  Guess what.  You can't.

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#2 2014-06-27 03:46:47

errol43
Silver Stacker
From: Bundaberg
Registered: 2010-04-13
Posts: 6,299
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Re: Killing Cash

^^^^Doesn't the PO take cash to pay the phone a/c for telstra.?

Regards Errol 43

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#3 2014-06-27 04:58:46

Ag bullet
Member
From: SE QLD
Registered: 2013-12-26
Posts: 516
Trades :   10 

Re: Killing Cash

legal tender. take it or don't get paid. till they make cash illegal


'let's get physical!'

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#4 2014-06-27 05:02:35

SpacePete
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Registered: 2014-03-01
Posts: 13,036
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Re: Killing Cash

Mario Draghi, chief psychopath of the European Central Bank went full-stupid on June 5th...

lol

but....

Spain, it would appear, has changed constitutional rules to enable a so-called 'moderate' levy on deposits - as under previous Spanish law this was prohibited.

How long will the levy stay "moderate"? This is really just a tax.


The law's duty is to protect the innocent, not to make them prove their innocence.

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#5 2014-06-27 05:04:56

bja
Silver Stacker
Registered: 2013-12-05
Posts: 423
Trades :   26 

Re: Killing Cash

Like a budget repair levy = Tax or
2% Medicare Levy = Tax
Call them what they like, we are the ones that pay

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#6 2014-07-07 10:23:31

Gorth
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Registered: 2014-06-14
Posts: 80
Trades :   

Re: Killing Cash

Going completely off topic for a bit, is it just me or does anyone else think the Spanish President is totally Gareth Evans' long lost twin brother?

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#7 2014-07-07 16:32:27

Old Codger
Silver Stacker
Registered: 2011-05-13
Posts: 5,128

Re: Killing Cash

What a horrible thought, TWO komrade gareths!


OC


"The Australian Labor Party is a democratic socialist party and has the objective of the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate exploitation and other anti-social features in these fields."   -  ALP Constitution.

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#8 2014-07-07 18:22:32

aleks
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From: Karl-Marx-Allee
Registered: 2010-10-14
Posts: 2,344
Trades :   20 

Re: Killing Cash

You have to remember losts of EU memebers still have their own currency.  In some small towns it's near impossible to pay with a card and even in big cities, some major supermarket chains and fast food outlets don't take credit cards. I don't think it will be happening anytime soon.

Last edited by aleks (2014-07-07 18:52:19)


Only you have your best financial interest at heart, be your own guru

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#9 2014-07-07 20:43:45

Court Jester
Silver Stacker
From: Gold Coast QLD
Registered: 2012-07-30
Posts: 2,783
Trades :   41 

Re: Killing Cash

aleks wrote:

You have to remember losts of EU memebers still have their own currency.  In some small towns it's near impossible to pay with a card and even in big cities, some major supermarket chains and fast food outlets don't take credit cards. I don't think it will be happening anytime soon.


what countries besides the UK are in the EU and dont use the euro?


<--------------------------------------------------------- SIDEWAYS --------------------------------------------------------->
quote=sammysilver 25/10/13  ----- PMs will drive silver to over $30 by Christmas with the GSR dropping to sub 50. I've overextended myself at sub $24 but will keep buying up to $30 then sell half my stack at Easter at $36 and buy up on the next dip if there is one.
Running Telly of incorrect to correct Predictions by SammySilver -- 7:1 as of 10/08/16

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#10 2014-07-07 23:33:55

Caput Lupinum
Silver Stacker
From: Silver Stackers forum
Registered: 2012-06-17
Posts: 4,961
Trades :   11 

Re: Killing Cash

Bulgaria
Croatia
Czech Republic
Denmark
Hungary
Lithuania
Poland
Romania
Sweden

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#11 2014-07-07 23:41:14

errol43
Silver Stacker
From: Bundaberg
Registered: 2010-04-13
Posts: 6,299
Trades :   

Re: Killing Cash

Old Codger wrote:

What a horrible thought, TWO komrade gareths!


OC

Or maybe TWO Mein Furhers..:D

Good to see you back OC

Regards Errol 43

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#12 2014-08-30 22:33:55

TeaPot&ChopSticks
Member
Registered: 2012-04-16
Posts: 288
Trades :   

Re: Killing Cash

Peru is now launching a digital currency - just like The Creature from Jekyll Island .

Last edited by TeaPot&ChopSticks (2014-08-30 22:34:16)


"If speaking is silver, then listening is gold." — Turkish Proverb

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#13 2016-08-12 19:46:41

SpacePete
Silver Stacker
Registered: 2014-03-01
Posts: 13,036
Trades :   118 
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Re: Killing Cash

More propaganda to support the elimination of cash. Look at how it is being demonized:

* "Cash is an untraceable means of exchange that enables (and encourages) a vast criminal economy."

* "It's also about limiting day-to-day street violence"

And maybe the real reason it is being pushed:

* ...if interest rates dip below zero, meaning banks effectively charge savers, customers can simply withdraw their cash and sidestep the policy entirely. This effect is known as the "zero lower bound," and is considered a serious limit to the effectiveness of monetary policy. "There are certainly many ways to skirt the zero lower bound, but the most elegant would be getting rid of most cash," Rogoff says.

Why Killing Cash Makes Sense

The case against cash isn't new—and while coins and paper notes are still integral in the U.S., they account for a minority of all transactions and just 14% by value. At the same time, the idea of a completely cashless economy is growing in popularity as research confirms the drawbacks of paper currency and technology provides a safer way forward. The argument is simple: Cash is an untraceable means of exchange that enables (and encourages) a vast criminal economy.

"For individuals and organizations conducting illicit activities, cash is undoubtedly the preferred payment mechanism," notes Peter Sands, Harvard president emeritus and a senior fellow at the university's Kennedy School of Government, in a recent paper. "No other payment mechanism simultaneously provides anonymity for payor and payee, leaves no trace of transactions, and is so widely accepted."

Without paper money, the criminal class would have to use banks, greatly increasing their chance of detection, or use a vastly more troublesome means of exchange. The increased oversight raises privacy concerns for law-abiding citizens, but experts point to a big societal payoff.

"You've seen pictures of these gigantic bales of money international drug dealers are found with," says Richard Wright, chair of the justice and criminology department at Georgia State University. Without cash, "what are you going to trade for drugs? Start trading 747s? Sure, you can transmit funds electronically, but that's much riskier because it's much more traceable."

...abolishing high denomination bills, such as the $100 bill and €500 note, would impose a sizable cost on criminals trafficking large amounts of money by making transportation much more difficult. Crooks can easily tote $1 million in $100 bills in a single briefcase, for instance; the cash weighs just 22 lbs. But in $20 bills, that same $1 million would weigh 110 lbs. and fill four briefcases—too much for one courier to handle.

Getting rid of cash isn't just about disrupting major organized crime. It's also about limiting day-to-day street violence. Professor Wright and his colleagues studied crime statistics in Missouri during its mid-1990s transition from distributing federal welfare benefits via a cashable check to a preloaded debit card. After comparing areas that transitioned to debit cards with those that still provided cash benefits, they found moving away from cash was associated with a roughly 10% drop in the total crime rate.

Wright says criminals generally commit burglaries, larcenies, and theft-related assaults in order to get their hands on money they can use in the illegal economy. "You can't buy drugs with a debit card," the professor explains. In other words, crime declined because there was less of what thieves wanted to steal. The evidence for cash's role in crime is strong enough that Wright supports getting rid of paper money wholesale—assuming there can be safeguards to allow transactions in the event of a major internet outage. "Getting rid of cash won't stop all of this [crime] but it will slow it significantly," he says.

Harvard economics professor Kenneth Rogoff also supports eliminating cash, not just to thwart underground economies, but also to help improve economic policy. Central banks typically fight recessions by lowering interest rates, which stimulates the economy by making saving less lucrative and encouraging consumers and businesses to spend. However, if interest rates dip below zero, meaning banks effectively charge savers, customers can simply withdraw their cash and sidestep the policy entirely. This effect is known as the "zero lower bound," and is considered a serious limit to the effectiveness of monetary policy. "There are certainly many ways to skirt the zero lower bound, but the most elegant would be getting rid of most cash," Rogoff says.

More: http://time.com/money/4307717/getting-rid-of-cash/


The law's duty is to protect the innocent, not to make them prove their innocence.

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#14 2016-08-12 19:52:48

SpacePete
Silver Stacker
Registered: 2014-03-01
Posts: 13,036
Trades :   118 
Website

Re: Killing Cash

Eliminating cash will also eliminate the checks and balances on banking policy and practice

The rhetoric against cash (bank notes and coins) has intensified over the past months. Academics and central bankers are advocating the elimination of large denominations of currency notes; some suggest to eliminate cash altogether. This hasn't gone unnoticed by the public as the spike in Google Trends for topics such as "war on cash" shows. Now it seems the ECB is considering the first step towards implementation by eliminating the largest euro-denominated bank note: the 500 EUR bill. This bill, so described by ECB president Mario Draghi, "is being viewed increasingly as an instrument for illegal activities."


...One important finding we present is the systematically important use of large-denomination cash bills in times of market volatility. Eliminating the ability of savers to redeem cash and store it outside of the banking system would remove important checks and balances on commercial banks' activities.

...Removing the lower boundaries for central bank interest rate policy by phasing out cash would remove important checks and balances on central bank policy itself, something that historically has been associated with severe monetary instability.

https://wealth.goldmoney.com/research/g … d-balances


The law's duty is to protect the innocent, not to make them prove their innocence.

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#15 2016-08-12 20:44:54

Old Codger
Silver Stacker
Registered: 2011-05-13
Posts: 5,128

Re: Killing Cash

Will the paper boy 'under the clocks' at Flinders St Station have a card doo-dad?

OC


"The Australian Labor Party is a democratic socialist party and has the objective of the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate exploitation and other anti-social features in these fields."   -  ALP Constitution.

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#16 2016-08-12 21:01:54

SpacePete
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Registered: 2014-03-01
Posts: 13,036
Trades :   118 
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Re: Killing Cash

Old Codger wrote:

Will the paper boy 'under the clocks' at Flinders St Station have a card doo-dad?

OC

The paper boy has been replaced by a vending machine with PayWave for those old codgers who don't read the news on their smart phone wink


The law's duty is to protect the innocent, not to make them prove their innocence.

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#17 2016-08-12 21:33:30

Old Codger
Silver Stacker
Registered: 2011-05-13
Posts: 5,128

Re: Killing Cash

What's a smart phone?


OC


"The Australian Labor Party is a democratic socialist party and has the objective of the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate exploitation and other anti-social features in these fields."   -  ALP Constitution.

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#18 2016-08-12 21:38:17

SpacePete
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Registered: 2014-03-01
Posts: 13,036
Trades :   118 
Website

Re: Killing Cash

Old Codger wrote:

What's a smart phone?

A device that sucks intelligence from users causing them to walk the streets like zombies, totally oblivious to everything around them.


The law's duty is to protect the innocent, not to make them prove their innocence.

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#19 2016-08-12 21:43:21

Skyrocket
Silver Stacker
From: Melbourne
Registered: 2014-07-20
Posts: 4,590
Trades :   35 

Re: Killing Cash

^ and giving them brain cancer too!

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