The War On Cash: Officially Sanctioned Theft

interestCharles Hugh Smith – You’ve probably read that there is a war on cash being waged on various fronts around the world. What exactly does a war on cash mean?

It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.

These limits are broadly called capital controls.

The War On Cash: Why Now?

Why are governments suddenly acting as if cash money is a bad thing that must be severely limited or eliminated?

Before we get to that, let’s distinguish between physical cash—currency and coins in your possession—and digital cash in the bank. The difference is self-evident: cash in hand cannot be confiscated by a “bail-in” (i.e. officially sanctioned theft) in which the government or bank expropriates a percentage of cash deposited in the bank. Cash in hand cannot be chipped away by negative interest rates or fees like cash held in a bank.

Cash in the bank cannot be withdrawn in a financial emergency that shutters the banks, i.e. a bank holiday.

When pundits suggest cash is “obsolete,” they mean physical paper money and coins, not cash in a bank. Cash in the bank is perfectly fine with the government and its well-paid yes-men (paging Mr. Rogoff and Mr. Buiter) because this cash can be expropriated by either “bail-ins” or by negative interest rates.

Mr. Buiter, for example, recently opined that the spot of bother in 2008-09 (the Global Financial Meltdown) could have been avoided if banks had only charged a 6% negative interest rate on cash: in effect, taking 6% of the depositor’s cash to force everyone to spend what cash they might have.

Both cash in hand and cash in the bank are subject to one favored method of expropriation, inflation. Inflation—the single most cherished goal of every central bank—steals purchasing power from physical cash and digital cash alike. Inflation punishes holders of cash and benefits those with debt, as debt becomes cheaper to service. Continue reading

Usury: The Problem With The Economic System… [Audio]

Anthony Migchels is an Interest-Free Currency activist and founder of the Gelre, the first Regional Currency in the Netherlands. He joins us to talk about the very central problems of economics today, usury or interest, alternative currencies and more.

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We begin by discussing the problems with our global usury economy, which results in the rich owning the majority of the wealth – a scheme that will inevitably lead to an economic collapse. Anthony explains how the money powers that be have plans spanning centuries and this predatory system, disguised as a free market strategy, is backed by the extremes of Libertarianism and Marxism, philosophies that contradict the very nature of mankind.

We’ll also take a look at how the workforce produces the majority of the wealth for the rich, yet their wages, food and basic commodities are taxed, resulting in total slavery to the state. Then, Anthony talks about the monetary reform movement, which is concerned with the creation of money out of nothing, as opposed to the problem of usury.

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