ZeroHedge: They're coming for your cash!
But that’s not enough, according to some economists. Citicorp’s chief economist, a technocrat named Willem Buiter, thinks the US needs much lower interest rates to push the economy out of the doldrums. He thinks negative interest rates around -6% would do the job. But there’s one condition: For his plan to work, he says, the government must abolish cash.
It’s easy to understand why Buiter might not have warm and fuzzy thoughts about cash. After all, if your bank is taking 6% from your savings, $100 in your account would be worth only $94 at the end of one year, $88.36 after two years, and $83.06 after three years. On the other hand, a $100 bill with Ben Franklin’s picture on it would still be worth… well, $100. Buiter understands that as long as cash exists, no one will voluntarily keep their savings in accounts with negative interest rates.
And Buiter isn’t the only one pointing out that outlawing cash could stimulate the economy, especially in a crisis. In a recent article, Michael Pento, president and founder of Pento Portfolio Strategies, observed:
“Strategies such as pushing interest rates into negative territory, outlawing cash, and sending electronic credits directly into private bank accounts may appear more palatable in the midst of market distress.” (emphasis added)
And the Fed seems to be catching on to the prospect of negative interest rates. At the latest meeting of the Fed’s Open Market Committee, at least one member suggested that negative interest rates might be worth considering.
As for abolishing cash altogether, proposals to do so are much further advanced outside the US. Italy and France have banned allcash transactions over €1,000. Spain has banned cash transactions exceeding €2,500. Similar restrictions are in place in Belgium, Bulgaria, Greece, Mexico, Russia, Uruguay, and other countries.
In the US, cash transaction limits don’t yet exist, but de facto limits already are enforced. I’ve received reports from several clients of interrogations by banks if they withdraw more than a few thousand dollars in cash from their accounts. And depositing or withdrawing more than $10,000 in cash from an account requires that banks (as well as other “financial institutions”) file a Currency Transaction Report with the IRS. “Structuring” a single cash transaction into multiple transactions to avoid this requirement is a crime. And if the circumstances surrounding a transaction above $5,000 are “suspicious,” financial institutions must file a Suspicious Activity Report.
Federal, state, and local law enforcement agencies consider cash holdings inherently suspicious. Under the Alice-in-Wonderland legal process of civil forfeiture, they can seize your cash if they believe that it’s somehow connected to a crime. That’s easy, since nearly 100% of cash circulating today contains tiny concentrations of narcotics residues – primarily cocaine. All police need to do is bring in a drug-sniffing dog to inspect the cash. If the dog alerts, police seize the cash. And under civil forfeiture rules, it’s up to you to prove that the cash has a legitimate origin.
If the government decides to restrict cash transactions or outlaw cash altogether, how would they do it? Actually, efforts along this line are already well under way. Many airlines accept only credit or debit cards for inflight purchases. Louisiana forbids cash for some secondhand sales of scrap metal. A proposal in Wisconsin would ban cash payments for treatment at pain clinics.
But for negative interest rates to really take hold, the Fed will need to step in. One proposal is for cash to be recalled in a very short period – as little as 10 days. Anyone turning in more than a relatively low threshold – perhaps as little as $1,000 – would be required to prove that the cash was generated legally and that all taxes on the income had been paid. Otherwise, 30% or more of the cash would be confiscated.
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Now repeat outloud: "Banks are terrified of Bitcoin. The Government can never control Bitcoin. And my favorite: Kill the Fed! Kill the Fed! Kill the Fed!" Haha.
Feels absurd all of a sudden?
Now you understand how ridiculously funny the lies sounded to me and why I mocked shills like Andreas and Ver since 2013. I only Wish I would have heard about Bitcoin before it hit $266.
dude the closed down the citibank where I live, mom my will get bonus stuff if she uses mobile payments, shes switching banks now. lol
