By Bill Bonner and cross-posted from Bonner & Partners
The Deep State wants you to use money it can easily control, tax, and confiscate. And paper currency is getting in its way…
France has already banned residents from making cash transactions of €1,000 ($1,114) or more. Norway and Sweden’s biggest banks urge the outright abolition of cash. And there are plans at the highest levels of government in Israel, India, and China to remove cash from circulation.
Deutsche Bank CEO John Cryan predicts that cash “probably won’t exist” 10 years from now.
And here is Mr. Lawrence Summers, a reliable source of claptrap (and a frequent spokesperson for the Deep State) in the Washington Post:
Illicit activities are facilitated when a million dollars weighs 2.2 pounds as with the 500 euro note rather than more than 50 pounds, as would be the case if the $20 bill was the high denomination note.
He proposes “a global agreement to stop issuing notes worth more than say $50 or $100. Such an agreement would be as significant as anything else the G7 or G20 has done in years.”
What makes Mr. Summers so confident that a ban on Ben Franklins would be a good thing?
It turns out that a research paper – presented by Peter Sands, the former CEO of British bank Standard Chartered, and published for the Harvard Kennedy School of Government – says so.
“High denomination notes,” said the report, “play little role in the functioning of the legitimate economy, yet a crucial role in the underground economy.”
Mr. Sands should know about hiding money.
While he was CEO, New York’s top financial regulator threatened to strip Standard Chartered of its banking license. It claimed the bank “schemed” with the Iranian government to hide at least 60,000 illegal transactions – involving at least $250 billion.
Here at the Diary, we don’t pretend to know how to improve the world. We just know what we like. And we don’t like other people telling us what to do.
Last year, we traveled all around the world. We went where we wanted to go. We did more or less what we wanted to do. Rarely did we feel that someone was bossing us around.
But back in the USA…
“Take your belt off. Take your shoes off. Anything in your pockets? Take it out…”
“Turn on lights. Fasten seat belts. Turn on windshield wipers.”
This morning, walking through the park, we found this sign:
Curb Your Pets
Not just a courtesy to your neighbors
IT’S THE LAW
People who insist you follow their ideas are always the same people whose ideas are idiotic.
“Always do the opposite of what they tell you do,” said a friend in France whose father was mayor of a small town during World War II.
“There had been ‘an incident.’” he explained. “I think the Resistance had killed a German soldier in the area. It was that time, late in the war, when the Nazis were retaliating against civilians. So, they told my father to get everyone in town to assemble in the town square.
“Instead, my father told everyone to run for the woods. They all did. They were lucky. They survived the war.”
And now, Mr. Summers wants us to bring our cash to the town square. Instead of $100 bills, he wants to force us to use electronic notations faithfully recorded in a federally regulated bank.
Have you ever seen one of these “electronic dollars,” dear reader?
We have not. We don’t know what they look like. And we’re deeply suspicious of the whole thing.
The European Central Bank and the Bank of Japan – along with central banks in Denmark, Sweden, and Switzerland have already imposed a negative interest rate “tax” on the accounts commercial banks hold with them (known as “reserve accounts”).
These central banks are hoping banks will pass on this new tax to their customers.
This has already happened in Switzerland…
As colleague Chris Lowe told Bonner & Partners Family Office members at our recent annual meeting in Rancho Santana in Nicaragua, Alternative Bank Schweiz (ABS) will begin charging a negative interest rate on customers’ deposits this year.
ABS will levy an annual penalty of 0.125% on deposits of less than 100,000 Swiss francs ($101,173) and an annual penalty of 0.75% on deposits of more than 100,000 Swiss francs.
Essentially, ABS is charging its customers to keep their money on deposit.
If you put $1 million in the bank, at 0.75% negative interest, you come back a year later, and you have $992,500 left. The bank has confiscated the other $7,500.
At a negative rate of, say, 3%… you pay $30,000 a year just to keep your money on deposit.
It sounds like a scam…
Governments abolish cash. You have no choice but to leave your savings on deposit. And you’re forced to pay banks for storing your money.
Banks are not really storing “your” money at all. A bank deposit is an IOU from your bank. There is no vault cash backing it up… just 1s and 0s on a database somewhere.
If the bank decides not to give you “your” money, you’re out of luck.
It’s as though someone offers to store your cherry pie. Then he goes and eats the pie, promising to give you one just like it when you want it. He then has the cheek to charge you every month for “storing” the pie…