The War On Cash: Officially Sanctioned Theft

Saturday, June 13, 2015
By Paul Martin

Charles Hugh Smith
OfTwoMinds.com
June 13, 2015

While the benefits to banks and governments of banning physical cash are self-evident, there are downsides to the real economy and to household resilience.

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 Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.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Cash in the bank cannot be withdrawn in a financial emergency that shutters the banks, i.e. a bank holiday.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.

The Rest…HERE

Comments are closed.

Join the revolution in 2018. Revolution Radio is 100% volunteer ran. Any contributions are greatly appreciated. God bless!

Follow us on Twitter