Posted on 11/17/2016 5:35:17 AM PST by blam
Jeff Berwick
November 17, 2016
We are living in a world where paper fiat money is becoming a novelty.
In Australia, Citibank has just become the first to declare that it no longer will accept notes or coins. Only digital transactions. This follows on the heels of India banning large cash denominations.
The cash-oriented changes of these two countries are especially troubling in light of the eventual plans to phase out large denomination euro notes and the US 100 dollar bill by 2018. Just as the Economist predicted nearly 30 years ago, the world is going cashless.
A few days ago we wrote (here) about how the Reserve Bank of India eliminated 500 and 1000 rupee banknotes from the money supply. These notes represent 20% of the cash value in circulation and 80% of cash outstanding in the country.
The main reason India has been combating cash in conjunction with selling off gold, is because people in the “black” or “free” Indian marketplace were supposedly circumventing the financial system by conducting business and then slowly buying physical gold with large denomination bills.
Since the transactions were not being tracked or monitored, it was much easier to hide earnings from the government trying to extort them. So naturally, being a greedy crime syndicate that operates parasitically on extorted funds, the government is putting a stop to something that it views as an ongoing, expanding threat.
Of course, there’s a reason why Indian women wear their wealth – gold and silver – on their bodies. Indians have been through this before. Indian societies are very old, perhaps the oldest in the world, and they’ve gone through numerous metals confiscations in the past.
(snip)
(Excerpt) Read more at marketoracle.co.uk ...
Digital only money is an easy way to impose bans.
Imagine an anti-2A prez using his pen and phone to prohibit firearm sales.
It’d be unconstitutional, obviously, but the financial networks WOULD COMPLY with the order and it’d be up to you to sue to restore things.
Cash will never be abolished. Instead, alternative forms of money will be used. We may see a return to gold and silver coins
That’s a great way for a huge welfare state like ours to prevent cheating by the peasants~!
“The US 100 dollar bill by 2018.”
Did he just make this up?
I would note that the ONLY thing that stopped the runaway inflation in Zimbabwe was their inability to print more paper money since other countries wouldn’t sell them the ink. Otherwise they would have continued to chop off zeros forever. Just one more reason not to go to a cashless society.
I should point out that the Indian government is, as part of this initiative, actually *replacing* the 500-rupee note with a new one, not eliminating it completely. It is eliminating the 1000-rupee note, but is circulating a new 2000-rupee note in its place. So no, India is not in the process of going cashless. Far too much of the economic activity there takes place in tiny villages or along roadsides, where the infrastructure to support a cashless society is completely absent.
Much of the effort is aimed at erasing the value of hidden piles of illicit cash (bribery money, mostly) held by wealthy businessmen and political figures. In this respect, it has shown some success, though that was marred by the apparent heads-up received by some VVIPs in Gujarat and various political parties, which enabled them to get their money converted or deposited before the axe came down.
It is also apparently aimed at destroying a surprisingly large pool of counterfeit bills streaming in from Pakistan. It’s too early to tell how successful this is going to be, as counterfeits of the new 2000-rupee notes are already surfacing (they didn’t include any new anti-counterfeit tech in the new notes, so all the counterfeiters had to do was change the colors in the printers and recut the paper bills).
Fiction ... Larry Sommers and others floated the idea ... but not happening: http://www.wsj.com/articles/end-the-100-bill-uncle-sam-says-no-1466155982
A glimpse into the distant, or not so distant future.
I hate this war on cash on a number of fronts not to speak of that it is also a war on anonymity.
But one of the reasons I do not like this attack on large bills is in relation to currency exchange. Sometimes I exchange US dollars for foreign currency at a time the dollar is strong just to have the foreign cash ready for travel to the other country in the future or in expectation of a later weakening of the US dollar (in the second example, yes I could use FOREX investing but the problem is the round lots you often have to buy and maybe you do not want to invest that much)...
What happens is, you often get higher denomination bills in the currency exchange and now you find out later the denomination is no longer accepted.
Take the example of Indian rupees - the 500 and 1000 rupee note is apparently not going to be accepted in India anymore.
1000 Indian rupees is only about $15 US dollars right now. Using the Indian 1000 rupee note has not been uncommon at all because some things have become “expensive” in India even eating in a restaurant and you probably do not want to use a credit card in an Indian restaurant or taxi if you are from the US.
So now I have some Indian 1000 rupee notes that I cannot use... now what?
This isn’t the only country I can example. And I keep some $100 dollar bills in a lockbox for an emergency. What now?
Of late I am stashing 1 dollar coins in $25 rolls. And $10 dollar bills in stacks. Part of retirement planning. I never use my debit card anymore - too risky so I am turning to using cash.
Thanks. A whole thread a couple of days ago never brought this out.
Sounds like you need a trip to India or a good friend going that can get them exchanged.
“I should point out that the Indian government is, as part of this initiative, actually *replacing* the 500-rupee note with a new one, not eliminating it completely. “
Introducing facts into a thread where people are going on about gold will get you some grief, I’ll wager.
It is called legal tender for a reason. I suggest a class action lawsuit. As legal tender banks should have to accept it or close down any unit not accepting coin or bills.
One of my concerns is that in the case of a hurricane how do you buy food and medicine? When Ike made land in Texas we had no power. It was only a category 3 hurricane.
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