Cash is quickly becoming a liability.
SHTF has been closely following the recent calls from Wall Street to ban cash and
implement a system that would force everyone to operate on the grid, even as
interest rates have hit negative and customers are actually charged for
keeping money in the bank.
For most observers, negative interest rates signals a bizarre and
unsustainable economic landscape, but for those calling the shots, the
negative rates are a necessary by-products of capital injections by the
Federal Reserve over the course of its quantitative easing operations.
The biggest problem with these negative rates – besides the fact that they
defy logic and send the wrong signals to investors – is that there is every
reason to withdraw cash and stash it, rather than be charged to keep deposits
in the bank.
But that’s exactly what the system wants to FORCE you to do. Money Metals Exchange explains it well:
The Federal Reserve bank and its owners, the largest banks on Wall
Street, want badly to be able to charge you interest for the privilege of
depositing your funds. The problem is getting you to stand for it.
Depositors already complain vigorously about zero percent returns on
checking and savings accounts. If they must start actually paying the bank to
hold funds on deposit, many will opt to simply withdraw the cash and
stuff it under their mattress or into a safe deposit box. That simply won’t
do.
The Goal Is to Force You to Deposit Cash and Charge You Interest
As author Clint Siegner notes, the problem is preventing cash from swiftly
evacuating banks, where fees can no longer be assessed. Government
institutions and banks are now setting policies to keep people from running
on the banks and operating outside their controlled system:
[The Swiss National Bank] is encouraging retail banks to be
“restrictive” with regards to cash withdrawals. And it is berating actors
such as the pension fund for trying to circumvent negative interest rates.
Apparently no one should be questioning the wisdom behind the policy! But the
bluster isn’t hiding the fact that bankers stand upon shaky legal ground. The
potential for a run on the banks remains.
The desired solution, as you see below, is in forcing compliance with new
bank fees by criminalizing cash, restricting its use for certain payments and above
certain amounts, as well as creating policies banning the storage of cash, gold and silver coins in
safety deposit boxes and other storage vehicles.
These are all topics that SHTF has covered recently:
Expert Says “Banning Cash” The Only Solution to Negative
Interest Market Problems
JP Morgan CEO Jamie Dimon Says Banks Should Charge for Cash
Banned: Chase Bank Says You Can No Longer Store Cash or
Precious Metals In Your Safe Deposit Box
Recently, Citigroup economist William Buiter called to “abolish or tax cash,” blaming
it for interfering with the effectiveness of negative interest rates:
When economic conditions worsen… they can bring interest rates to zero,
but reducing them further below that is fraught with problems, the biggest of
which is cash in the economy.
As SHTF noted, Jamie Dimon, head of JPMorgan Chase, called
on banks to charge for outmoded payments like cash and checks in his recent
letter to investors, signalling a climate centered around digital currency…
and with it, control:
Moreover, JPMorgan and other big banks are expanding their policies of
charging customers to hold deposits, validate funds and make transactions –
charges that JPMorgan sees as the “true cost of moving money.”
With new measures for cybersecurity, fraud protection and payment
verification in mind, JPMorgan is slated to tack on new processing fees and
add costs for all transactions, and especially ‘outmoded’ payments like cash
and checks and the loafing “free riders” who use them:
Dimon stated:
For example, it costs retailers 50-70 basis points to use cash (due to
preventing fraud and providing security, etc.). And retailers often will pay
1% to an intermediary to guarantee that a check is good. A guaranteed check
essentially is the same as a debit card transaction for which they want to
pay 0%. For some competitors, free riding is the only thing that makes their
competition possible. Having said that, we need to acknowledge our own flaws.
We need to build a real-time system that properly charges
participants for usage, allows for good customer service, and
minimizes fraud and bad behavior.
For the bankers and power brokers in charge, the digital market has all
the advantages for profit and control. Their need to phase out cash goes
hand-in-hand with their desire to force customers to pay more for less.
The ground market where cash is frequently used by ordinary people where
transactions are not tightly controlled and monitored goes against the aims
of not only Wall Street, but the larger system of population control.
Buiter, the proponent of abolishing cash, acknowledges but dismisses the
importance of these drawbacks and unfair intrusions into our daily lives, stating:
Abolishing currency would inevitably be associated with a loss of privacy
and create risks of excessive intrusion by the government.
Switching exclusively to electronic payments may create new security and
operational risks.
As Money Metals Exchange explained, these policies are not
established to create prosperity for the most people possible in a reformed
market – they are simply there to “herd” the masses into schemes by the
central planners, who hold the ultimate power:
If depositors’ response to negative interest rates is predictable, so is
the reaction from central planners. Effective herding is all about limiting
the escape routes for members of the herd.
Eliminating physical cash may well be a longer-term project, but it is not
something the Fed can likely implement any time soon. In the meantime, there
are other ways to prevent depositors from making their escape.
For starters, officials can criminalize the use of cash above
certain amounts …
[,..]
Banks can also implement new policies of their own. […] The
bank will no longer accept cash from customers who want to use it to make
mortgage payments, pay credit card balances or to cover their automobile
loan.
Chase also rolled out new restrictions on what can be put into safe
deposit boxes [the agreement] states, “You agree not to store any cash or
coins other than those found to have a collectible value.
As digital control replace free exchange of currency, the economy reaches
the point of total control and only restrictive, subservient activities are
allowed.
Nothing has been fixed since the 2008 economic crisis… it is only freedom
and the ability to restrict the takeover that has moved forward.
