Our "FREE" Country wouldn't tolerate an immediate ban or confiscation of cash. So, government stealthily and quietly clamps down on the use of cash. Soon, a government caused financial 'emergency' will provide the means for complete central control of cash and the economy.
Anyone who believes this country is free is an idiot!
How banks & the government are diminishing your savings
by Charles Hugh Smith
Friday, June 12, 2015, 12:07 PM
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 Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.
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Cash in the bank cannot be withdrawn in a financial emergency that shutters the banks, i.e. a bank holiday.
NOVEMBER 4, 2013 / GARY GIBSON
[Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]
The days of the federal government stealing money from taxpayers, or borrowing it from the Federal Reserve, to save troubled banks — as in they did in the 2008 crisis — may be over. Congress is considering imitating the theft in Cyprus and letting troubled banks "bail-in" depositor money in order to make themselves solvent.
“Bail-ins are coming to North America without any doubt, and will be remembered as the ‘Great Leveling,’ of the ‘great Flushing’. Not only can it happen here, but it will happen here…It stands on legal grounds by legal precedent both in the US, Canada and the UK."
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.
The beneficial effect of inflation on debt has been in play for decades, so it can’t be the cause of governments’ recent interest in eliminating physical cash.
So now we return to the question: Why are governments suddenly declaring war on physical cash, the oldest officially issued form of money?
The first reason: physical cash has the potential to evade both taxes as well as officially sanctioned theft via bail-ins and negative interest rates. In short, physical cash is extremely difficult for governments to steal.
Some of you may find the word theft harsh or even offensive. But we must differentiate between taxes—which are levied to pay for the state’s programs that in principle benefit all citizens—and bail-ins, i.e. the taking of depositors’ cash to bail out banks that became insolvent through the actions of the banks’ management, not the actions of depositors.
[Editor's Note: The $700 billion Troubled Asset Relief Program (TARP) came from Federal Reserve (money out-of-thin-air) inflation, the preferred, secret theft.]
Bail-ins are theft, pure and simple. Since the government enforces the taking, it is officially sanctioned theft, but theft nonetheless.
Negative interest rates are another form of officially sanctioned theft. In a world without the financial repression of zero-interest rates (ZIRP—central banks’ most beloved policy), lenders would charge borrowers enough interest to pay depositors for the use of their cash and earn the lender a profit.
If borrowers are paying interest, negative interest rates are theft, pure and simple.
Why are governments suddenly so keen to ban physical cash? The answer appears to be that the banks and government authorities are anticipating bail-ins, steeply negative interest rates and hefty fees on cash, and they want to close any opening regular depositors might have to escape these forms of officially sanctioned theft. The escape from bail-ins and fees on cash deposits is physical cash, and hence the sudden flurry of calls to eliminate cash as a relic of a bygone age—that is, an age when commoners had some way to safeguard their money from bail-ins and bankers’ control.
Forcing Those With Cash To Spend Or Gamble Their Cash
Negative interest rates (and fees on cash, which are equivalently punitive to savers) raise another question: why are governments suddenly obsessed with forcing owners of cash to either spend it or gamble it in the financial-market casinos?
The conventional answer voiced by Mr. Buiter is that recession and credit contraction result from households and enterprises hoarding cash instead of spending it. The solution to recession is thus to force all those stingy cash hoarders to spend their money.
There are three enormous flaws in this thinking.
One is that households and businesses have cash to hoard. The reality is the bottom 90% of households have less income now than they did 15 years ago, which means their spending has declined not from hoarding but from declining income.
While Corporate America has basked in the glory of sharply rising profits, small business has not prospered in the same fashion. Indeed, but some measures, small business has been in a 6-year recession.
The bottom 90% has less income and faces higher living expenses, so only the top slice of households has any substantial cash. This top slice may see few safe opportunities to invest their savings, so they choose to keep their savings in cash rather than gamble it in a rigged casino (i.e. the stock market).
The second flaw is that hoarding cash is the only rational, prudent response in an era of financial repression and economic insecurity. What central banks are demanding--that we spend every penny of our earnings rather than save some for investments we control or emergencies—is counter to our best interests.
This leads to the third flaw: capital -- which begins its life as savings -- is the foundation of capitalism. If you attack savings as a scourge, you are attacking capitalism and upward mobility, for only those who save capital can invest it to build wealth. By attacking cash, the central banks and governments are attacking capital and upward mobility.
Those who already own the majority of productive assets are able to borrow essentially unlimited sums at near-zero interest rates, which they can use to buy more productive assets, while everyone else--the bottom 99.5%--is reduced to consumer-serfdom: you are not supposed to accumulate productive capital, you are supposed to spend every penny you earn on interest payments, goods and services.
This inversion of capitalism dooms an economy to all the ills we are experiencing in abundance: rising income inequality, reduced opportunities for entrepreneurship, rising debt burdens and a short-term perspective that voids the longer-term planning required to build sustainable productivity and wealth.
Physical cash: Only $1.36 Trillion
According to the Federal Reserve, total outstanding physical cash amounts to $1.36 trillion.
Given that a substantial amount of this cash is held overseas, physical cash is a tiny part of the domestic economy and the nation’s total assets. For context: the U.S. economy is $17.5 trillion, total financial assets of households and nonprofit organizations total $68 trillion, base money is around $4 trillion, and total money (currency in circulation and demand deposits) is over $10 trillion (source).
Given the relatively modest quantity of physical cash, claims that eliminating it will boost the economy ring hollow.
Following the principle of cui bono—to whose benefit?--let’s ask: What are the benefits of eliminating physical cash to banks and the government?
Benefits To Banks And The Government Of Eliminating Physical cash
The benefits to banks and governments by eliminating cash are self-evident:
Every financial transaction can be taxed
Every financial transaction can be charged a fee
Bank runs are eliminated
In fractional reserve systems such as ours, banks are only required to hold a fraction of their assets in cash. Thus a bank might only have 1% of its assets in cash. If customers fear the bank might be insolvent, they crowd the bank and demand their deposits in physical cash. The bank quickly runs out of physical cash and closes its doors, further fueling a panic.
The federal government began insuring deposits after the Great Depression triggered the collapse of hundreds of banks, and that guarantee limited bank runs, as depositors no longer needed to fear a bank closing would mean their money on deposit was lost.
But since people could conceivably sense a disturbance in the Financial Force and decide to turn digital cash into physical cash as a precaution, eliminating physical cash also eliminates the possibility of bank runs, as there will be no form of cash that isn’t controlled by banks.
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.
See the following links for more related articles:
[Editor's Note: what I have dubbed the "Legislative-Executive-Judicial Cabal" which the American People have caused by ignoring the generational transition from our Constitutional Republic to what now is, in effect, an "elected" dictatorship. Never mind who is elected. Never mind which bogus party is in power. The superficial, theatrically staged, choreographed appearance of debate, disagreement, and stalled legislation always resolves into more government and less FREEDOM. We the People still lose more freedom after every "emergency" or unnoticeably when CON-gress passes another general, open-ended law that enables the Executive (dictator) and its unaccountable agencies to formulate more freedom-restricting regulations (200 pages a day get posted to the Federal Register). The "Dictator's" agencies (police force) continue to pile-up more weapons to squelch uprising(s) when the People finally realize and understand their tyrannical government.
Currently, CONgress is just a group of socialists, progressives, and faux-conservatives (career politicians) that, on a daily basis, ignores the Constitution, many of their own past statutes, and cedes their responsibilities to the president ("elected" dictator). A comparison to the history of Rome becomes more and more credible with the Executive and its "featherbedded" lackeys gaining more power while CONgress sits back all fat-dumb-and-happy.
CONgress has made recent efforts to expose State Dept. failures in Benghazi (inept political leader), Fast-and-Furious gun-running (criminal AG), IRS 1st amendment violations, gov't union Veterans Administration fraud, and whining about Obama(Reid)-killer-Care, but these efforts are mostly politics as usual. Most "citizens" will forget about these infringements from our unaccountable, uncontrollable Executive branch with its tyrannical agencies staffed by socialist unions that extort "juicy" contracts from the "elected" dictatorship.
Most positions in the federal government whether elected, appointed, or hired are nominal, make-work jobs (confidentially) designed merely to grow government, bilk money from private businesses and citizens, and eventually fully transform America into a totalitarian state. When this happens, CONgress will have destroyed the economy and the country by their negligence and counter-liberty policies, and it will be almost impossible to Restore America. The 'Restore America' list is only a beginning too.]
"The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed or elective, may justly be pronounced the very definition of tyranny."
James Madison, Federalist Paper 47, Friday, February 1, 1788
Anyone who believes this country is free is an idiot!
"Extortion and thuggery are good things when they're called law!"
Larken Rose
[Editor's Note: a Constitutional Convention is required to reverse the damage to freedom and liberty since 1900. This Article V was ratified by the participants at America's founding Constitutional Convention as an alternate path for repairing damage to freedom and liberty, a path for the People to restore damage caused by our failed representatives in the Legislative, Executive, and Judicial branches of a government designed to represent the wishes of We the People.
The States must "demand" a Convention and explicitly specify an agenda of:
laws to be repealed or modified,
Amendments to existing constitutional clauses that define the co-equal branches to further specify and define, and
new Amendments or statutes to be eventually ratified by States.
These Amendments should further specify and clarify the powers of the Legislature and Executive Branches. A good example is the definition of a "Bill".
A Bill should contain ONLY verbiage in regards to the topic of the future law. NO earmarks and NO unrelated sections or attacments.
Many past Bills sent to a president for signature contained unrelated but essential funding sections that rendered the Bill veto-proof when it warranted a veto.
CON-gress can override a veto if the Bill is deemed absolutely necessary by CON-gress.
If the Bill requires SPECIFICALLY related amendments, the CON-gress can "debate" (with its usual theater) and vote any new amendments.
The original text of the Constitution contains some very GENERAL clauses enabling both CON-gress and Executive branches to write laws and
regulations with their particular nuances expanding powers beyond intent. "Intent" may be gleaned from a complete understanding of
Federalist Papers.
An example of further specification and clarity for CON-gress should be a clear, very specific definition of the boundaries for the interstate Commerce Clause.
To restore freedom, liberty, and individuality - minimally these must be repealed:
Currently, even with computer-searching systems, the list of antiquated and/or obsolete statutes (and related regulations) is unwieldy.
These statutes must be invalidated unless there remains an applicable reason for retaining the law(s).
Aside from invalidating statutes, there are many regulations that are biased in favor of large enterprises (who buy support from bureaucrats)
at the expense of the competition, effectively repressing the Free Market. Any regulations not related to public safety that gives a financial advantage
to some companies over their smaller rivals must be rescinded to enable all companies with good consumer products to excel without burdensome regulations.
Additionally, the Convention should adopt for ratification at least these new Amendments or statute modifications:
clearly define and limit the role of government in regards to the term "general welfare",
Term Limits for CON-gress (12 years) including a 6 month limit on time residing in DC,
strict Prohibition of Lobbying (with a comprehensive definition of "lobbying"), and
a Balanced Budget Amendment to stop wreckless spending. During a CON-gressionally declared "war" (only after USA is attacked or attack is proven "imminent"),
deficit spending is permissible.
Restore America to its roots, i.e. Defense, State, Treasury, and Justice. Some Agencies are required like CIA and NSA, both respectively focused on defense against real foreign aggressors and not fictitious paranoid delusions of war mongers. Other agencies help where certain interstate communications are necessary. Most agencies like Agriculture, Education, DEA, IRS (eliminated with 16th Amendment) and many other listed here should be eliminated.
Restore the world Gold Standard with five contentious steps, and
Replace the IMF, World Bank, and Export-Import Bank with facilities that reflect the new Gold Standard, and
After decentralizing and economizing, if tax revenue is needed to fund all or part of the federal government, then implement the Fair Tax.
Regarding a Constitutional Convention itself, some of the available literature warns the reader about a possible "unstructured" and "mismanaged"
Convention that might propose and adopt amendments that could damage the Republic.
Possible, however, it is difficult to envisage how much more damage could done over what the L-E-J Cabal has already done.
If the Convention's agenda and rules of order strictly prohibit violation of the rules and enable a vote on unlisted Amendments AFTER all others are adopted,
then the Convention will be properly structured and managed. ]
John Adams said, “Without [term limits] every man in power becomes a ravenous beast of prey”. That being said, here are some of the reasons we believe our country needs Term Limits.
Term Limits can help break the cycle of corruption in Congress. Case studies show that the longer an individual stays in office, the more likely they are to stop serving the public and begin serving their own interests.
Term Limits will encourage regular citizens to run for office. Presently, there is a 94% re-election rate in the House and 83% in the Senate. Because of name recognition, and usually the advantage of money, it can be easy to stay in office. Without legitimate competition, what is the incentive for a member of Congress to serve the public? Furthermore, it is almost a lost cause for the average citizen to try to campaign against current members of Congress.
Term Limits will break the power special interest groups have in Congress.
Term Limits will force politicians to think about the impact of their legislation because they will be returning to their communities shortly to live under the laws they enacted.
Term Limits will bring diversity of people and fresh ideas to Congress.
[Editor's Note: If you want to get rich, i.e. advance from a low paying government bureaucrat job on the local or state level, THEN GET ELECTED TO THE US CONGRESS (House or Senate). Once you're elected, it's easy to steal from your campaign contributions or the Congressional budget allocated to your seat and staff. You can go on a government-funded junket with 'lavishly' paid expenses. The list of ways to steal from the government while in office is inexhaustible. There are only a few Congressmen who left Congress just wealthy instead of a multi-millionaire. Of course, there are several who arrived in Congress as multi-millionaires and don't need to steal from the government.]
CONVENTION of STATES (CoS)
CONVENTION of STATES
BECOME a MEMBER-PARTICIPANT of CONVENTION of STATES here.
Get into the Action; Get information. Join here.
The CONgress (by
Article V of the Constitution) has proposed and
States have ratified many new amendments to the Constitution, some that increase their power over us citizens. CONgress can propose amendments, and the
alternative method to CONgressional proposals can come from States via
Article V. When "We the People" — meaning
a very large majority — are opposed to Acts of CONgress like the INCOME TAX or ENDLESS WARS or the FEDERAL RESERVE, Acts that restrict and regulate our
LIBERTY, Acts that are a waste of money, Acts that have caused unrecoverable indebtedness, then through local representaatives of our States WE can propose
Amendments to be ratified by States just like CONgress.
STATES and the PEOPLE of America are very angry at the federal goverment's violation of its
constitutionally-defined boundaries. States created the federal government in 1787 with LIMITED powers defined in the Constitution. All powers not
given by States to the feds remain with the States by Article X. The feds have through deceit, distortion, and falsification rearranged the entire contractual agreement
between States and the federal government. The feds have become a very powerful, all consuming force in American government. The time has come for States to rein in the federal government,
to take power back, to limit the federal government's power, and to add some detailed restriction to the definition of CONgress, the Executive, and the Judiciary.
In 1787 a central government was (is) necessary only to provide for the common defense and ensure equality
under the law for all Citizens, to provide a final arbiter for the resolution of unsolvable problems among States and People. Most laws and regulations that the federal
government has wreaked on the States and the People are unconstitutional. States are independent, sovereign countries who realized the need for a limited and defined
central government to prevent wasteful duplication of effort. The federal government, in 2017, is OUT OF CONTROL, infringing and interfering with State sovereignty and their
separate economies. A problem arose in 2012 with Arizona's attempt to secure their border with Mexico. An article is
here. States can prevent infringements
by the federal government with an Aricle V Convention of States to not only reverse past federal government "power grabs" but prevent future federal government
violations of their Constitutionally-defined boundaries.
A new, well-organized group of volunteers in all 50 states have gathered to restore America to
its roots by limiting all 3 branches of the federal government with a
Convention of States (CoS) organization (alternate site,
CoS Action). This is a Convention of States to AMEND the Constitution — NOT rewrite it!
Recently, CoS held an Article V, Convention
simulation with appointed volunteers from all 50 States. The simulated Convention demonstrated how a well-organized CoS can vote for proposed amendments
to the Consitution that are popular enough to be ratified by the necessary 3/4ths of States (38). Obviously, only proposed Amendments that are likely to pass
both Houses of the legislatures of thirty-eight (38) States, that is, the required 3/4ths of States to ratify an Amendment to the Constitution should be proposed.
See the Final Report here.
The purpose in a Convention of States, simulated or real, is to PROPOSE AMENDMENTS that give power back to the People. The proposed amendments must reflect the
thinking, objectives — the goals of people of States — who want to restore our Constitutional Republic to one that represents the people.
ARTICLE V Convention of States—Restore the Appropriate Balance!
ARTICLE V Convention of States—Restore the Appropriate Balance!
ARTICLE V Convention of States—Restore the Appropriate Balance!
A real CoS, requires that 2/3rds of States (34) send an "application" to CONgress requesting that
CONgress schedule a CoS. State Legislatures are composed of an Assembly and Senate. Each "house" must pass a bill separately and send the resolution to their
Governor. Then the State sends an "application" to the CONgress. When the federal CONgress receives applications from 34 States, the CONgress is required to set a date for
the Convention of States. CONgress is NOT involved otherwise. The States have the Convention, propose amendments, and dispatch the precisely worded amendments to
their respectives assemblies and senates for ratification. CONgress only schedules the Convention.
One is that households and businesses have cash to hoard. The reality is the bottom 90% of households have less income now than they did 15 years ago, which means their spending has declined not from hoarding but from declining income.
The bottom 90% has less income and faces higher living expenses, so only the top slice of households has any substantial cash. This top slice may see few safe opportunities to invest their savings, so they choose to keep their savings in cash rather than gamble it in a rigged casino (i.e. the stock market).
