First the War on Cash, Gold is Next- Jim Rickards

 

 

Larry Summers:

“On balance, nothing in the Indian experience gives us pause in recommending that no more large notes be created in the United States, Europe and around the world.”

This is the Playboook on How Cash is Ending

Any questions? At risk of sounding like a broken record. Cash is dead, and they will come after Gold next. Don't take it from us, although we've been saying it for 5 months. Take it from Jim Rickards.- Soren K.

 

 

First the War on Cash, then the War on Gold

By Jim Rickards via the Daily Reckoning

The global elites are using negative interest rates and inflation to make your money disappear. The whole idea of the war on cash is to force savers into digital bank accounts so their money can be taken from them in the form of negative interest rates.

One way to avoid negative interest rates is to go to physical cash. They can’t impose negative interest rates on cash.

In order to prevent people from using that option, the elites have launched a war on cash, as recent events have borne out. The war on cash is old news, but it is escalating rapidly...

India’s decision to make 1,000- and 500-rupee notes worthless is having devastating ripple effects in the Indian economy and the market for gold.

The consequences of the decision are both appalling and encouraging — appalling because they show governments’ ability to destroy wealth, and encouraging because they show the ingenuity of individuals operating under the thumb of an oppressive government.

One immediate consequence of the cash ban was that paper money began trading at a discount to face value. The entire banking system in India has been running out of cash and alternative forms of payment such as gold and barter have been emerging.

In plain English, you might be able to sell your illegal 1,000-rupee note to a middleman for 750 rupees in smaller denominations. You would get legal tender for your worthless 1,000-rupee note. The middleman presumably has some connection with the banks that allows him to deposit the funds without being harassed by the tax authorities.

In plain English, you might be able to sell your illegal 1,000-rupee note to a middleman for 750 rupees in smaller denominations.

It’s not unusual for bonds to trade at a discount due to changes in interest rates or credit quality, but this is the first time I’ve ever seen cash trading at a discount (although I did predict this development in Chapter 1 of my new book, The Road to Ruin.)

The second distortion is that gold is selling in India for over $2,000 per ounce at a time when the world market price is under $1,200 per ounce. This is because Indian citizens are rushing to buy gold for cash.

The gold dealers can then deposit the cash for full value. This is just another form of discount on the face value of the cash. It’s not that gold is more valuable; it’s just that your $2,000 is worth less than $1,200 (in rupee equivalents) when it comes time to buy the gold.

I've said for a while that the war on cash would be followed quickly by a war on gold. India may prove the point.

Don’t think of this as something that happens only in poor countries. Similar scenes will play out in the U.S. and Europe as elites become more desperate to take your money.

It should be clear that the war on cash has two main thrusts. The first is to make it difficult to obtain cash in the first place. At home, U.S. banks will report anyone taking more than $3,000 in cash as engaging in a “suspicious activity” using Treasury Form SAR (Suspicious Activity Report).

The second thrust is to eliminate large-denomination banknotes. A 1,000-rupee note may sound like a lot, but it’s only equivalent to about $15 U.S. dollars. The U.S. got rid of its $500 note in 1969, and the $100 note has lost 85% of its purchasing power since then. With a little more inflation, the $100 bill will be reduced to chump change.

Of course the European Central Bank announced that they were discontinuing the production of new 500 euro notes (worth about $575 at current exchange rates). Existing 500 euro notes will still be legal tender, but new ones will not be produced.

This means that over time, the notes will be in short supply and individuals in need of large denominations may actually bid up the price above face value paying, say, 502 euros in smaller bills for a 500 euro note. The 2 euro premium in this example is like a negative interest rate on cash.

Ken Rogoff is a leading voice of the elites in the war on cash. He recently wrote an article detailing the ways elites can steal your money. The first is negative interest rates. The second is the elimination of cash (governments can do this by declaring the $100 bill worthless, just as India did with the 500- and 1,000-rupee notes).

The third way is to set higher inflation targets. Rogoff wants to raise the Fed’s inflation target from 2% to 4% per year. At a 4% rate, the value of a dollar is cut 75% between the time you’re 30 years old until a normal retirement age of 65. The money you save in your younger years is nearly worthless by the time you need it.

Rogoff wants to raise the Fed’s inflation target from 2% to 4% per year. At a 4% rate, the value of a dollar is cut 75% between the time you’re 30 years old until a normal retirement age of 65.

Why should you care what Ken Rogoff thinks? Because Rogoff is not just another big brain. He’s a professor of economics at Harvard University and the former chief economist of the International Monetary Fund. More importantly, his name is frequently mentioned as a possible nominee for a seat on the Board of Governors of the Federal Reserve. If Rogoff were on the Fed board, he’d be in a position to turn his confiscatory ideas into policy.

But even if Rogoff remains at Harvard, his views are highly influential on economic policy in general. Rogoff is not alone in his views.

One solution to negative interest rates is to buy physical gold. But if the government has a war on cash, can the war on gold be far behind? Probably not.

Governments always use money laundering, drug dealing and terrorism as an excuse to keep tabs on honest citizens and deprive them of the ability to use money alternatives such as physical cash and gold. When you start to see news articles about criminals using gold instead of cash, that’s a stalking horse for government regulation of gold.

Guess what? An article on the topic of criminals using gold just appeared this spring, in Bloomberg. This is one more reason to get your physical gold now, while you still can.

If you do not already have a 10% allocation of investible assets to gold, it’s time to make that allocation. Gold is almost the only way to avoid the plans for confiscation that Rogoff and the other elites have in mind.

Previous Articles on Cash's Demise

India,

  CITI in Australia,

Norway, Denmark, and Sweden

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graham hall (not verified)

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remember the past and what happens to greedy governments and banks , the issues everyone is missing its not to curb illegal products, or terrorists, its about control of the masses by those at the top, im sure the bastille is still remembered the french revolution also, civil war poor against rich will cause a massive culling that those in power want but if banks and powers want to head down that road again modern tech wont help them.it will effect everyone. maybe they should stop and have a good think, cyprus was only a year or two ago it cost the people millions and the banks got away with it then they installed the same legislation in canada and new zealand wouldnt want to get in front of a kiwi when hes had enough.
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roger mason (not verified)

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hey soren, 10% of your savings in gold is a pitiful joke. silver has much more potential than gold. gold is for people with too much "money". we are 100% invested in physical silver bullion in our own hot little hands. your reporting on the war on cash if first rate. thank you, roger
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Soren K.

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search our silver articles. we repeatedly state silver is the better metal to own long term if a true doomsday scenario wereto happen.- TX for the compliment. Rock on
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Hi Ho Silver (not verified)

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Wealth is about power over other people. Always has been. What form it takes, the bottom 99% are the last to know.
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Hi Ho Silver (not verified)

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Most look upon those setting aside Precious Metals like when Noah was building an Arc in the desert. But then the flood came...
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...away (not verified)

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ark
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Soren K.

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lol. nice. "sorry honey, but the boat weighs too much. Can't take you AND my Gold!"
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derrend (not verified)

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Bitcoin is a non-physical asset that cannot be ceased from you by force which makes it more secure that physical gold imo.
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Soren K.

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because you don't need to seize it form the owner. you already control it. And no public riots or doors being broken down. CONTROL>OWNERSHIP
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Soren K.

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ok.. and how do you prove you own it, when the system is "hacked" and by hacked i mean the government just says its gone. See southpark
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Dave (not verified)

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The manipulators are once AGAIN driving down metal prices to make the noobs panic and sell. The real deal is HOLD WHAT YA GOT! Be patient and it will pay off big time! My Mother (*G-d bless her) taught me to be patient. THIS is that moment. Peace
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LOL (not verified)

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Kitco sales waning...pulling out all fear stops now
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Soren K.

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lol. nice. not true though.. this Rickards article is a push for his book. in fact my fear is that coopting Gold control is a reason to not own gold, as it will be confiscated in value. If you are long gold, they wont let you have it when you need it. guns ove rGold if it comes to that
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Some Guy (not verified)

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Invest your wealth in these private fiat currencies, or somewhere else? It seems that they are springing the trap a little too quickly, as we still have some alternatives they haven't quite eliminated yet.
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Soren K.

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look at India as a trial balloon for the US... easier to convince the masses without education first. Even if the US has no influence over India's decision. it is smart to sit back and watch. Then change its own plans according to India's mistakes. Summers' statement tells all. Western countries can afford to watch and learn To Modi's credit, the black market economy is close to 20% GDP. That's insane. if they are to join the supranational community of globalizers, that has to be stopped.