Financial Tyranny: The Dawn of a New Totalitarianism
by Brian Maher
A beloved friend, Mr. Cash, has been charged with capital crimes and will be sentenced to death if convicted.
The charges are severe, and two in number. The first is obstruction. The prosecution has charged Cash with economic sabotage. The second is aiding and abetting. Prosecutors claim he’s been an accomplice of crime and terrorism. If convicted Cash will be years on death row before that blue day arrives. He may file several appeals along the way, but no further evidence will be admitted. The decision will be final...
Now, in reality Mr. Cash is ‘cash’ with a lower-case “c”, and it’s taking refuge in your wallet right now. The government and the central bank are out to get it. They’re the prosecution in the case at bar. Oddly enough, they’re also judge and jury. The accused was assigned a public defender.
Were you aware you were harboring such a dangerous felon in your wallet? Not likely. But according to the government and cheerleaders for the Federal Reserve, you are. And if they manage to destroy cash as intended, it’ll take the lingering vestiges of economic liberty to the grave with it. You’ll see why shortly…
Mainstream economists are taking the case against cash to the press. Nothing less than a cashless society is their goal. Willem Buiter, an economist at Citi, gives the prosecution’s side: “The world’s central banks have a problem. When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut -- they can bring interest rates to zero, but reducing them further below that is fraught with problems, the biggest of which is cash in the economy.”
The problem, according to economists of this species, is that cash prevents the banks from charging negative interest rates on account holders’ deposits. And negative interest rates are required to “stimulate” the economy. But if banks charged negative interest rates depositors would simply withdraw their cash. After all, you don’t have to pay interest on the $20 bill in your hand. But you would have to pay it if your $20 sits in the bank.
What’s their solution?
The Fed would like to deny you the freedom to own cash because your cash is sinking its efforts to stimulate the economy. Or at least a gaggle of impeccably credentialed economists would like you to believe that. What’s their ultimate goal?
Isn’t it funny that the remedy on offer hands more power to the central bank?
As the Financial Times put it:
“The introduction of a cashless society empowers central banks greatly. A cashless society, after all, not only makes things like negative interest rates possible, it transfers absolute control of the money supply to the central bank.” Now we’re getting somewhere. It transfers absolute control of the money supply to the central bank. Follow the money. Literally.
If I can get in a word before moving on…
This is the economics of cranks, of madmen hearing voices in the air. It is the economics of Weimar Germany, where wheelbarrows of money were spent one day out of fear they’d be worthless the next.
This scheme makes money a hot potato burning the hands of anyone holding it more than three seconds. It destroys savers. And it destroys the formation of capital that is the seed corn of future growth. It turns every principle of sound economics on its ear. It is not economics, in fact. It is anti-economics. Any economist proposing it should be stripped of his title.
But if they abolished cash the banks would be in high cotton. They’ve always had to confront the possibility of bank runs. Nervous customers in doubt of their bank’s promises could demand their money at any time. If they all demanded it at once, the bank would go under because the cupboards would be bare. They wouldn’t have the money on hand to pay all their depositors. The concern was especially great under the gold standard, but still applies to a lesser degree with cash. The private citizen was the ultimate master of the bank. Bankers always resented that since it put a hard check upon their inflationary designs.
But in a world without cash, banks no longer face this problem. The banks would no longer fear the specter of depositors demanding their cash. The tables would turn. They have your money and if you want it in cash, you can tell it to the judge. In other words, your money would no longer be your rightful property. It would be a wispy, ethereal digit managed by the banking system, held at its discretion. You could only access it if you play by their rules. Economic freedom? Hah.
Is there any wonder the banks would like to abolish cash? It would give them the power of princes. And make us their vassals.
Know who else wants to send cash to the gallows?
The government is keen as mustard to abolish cash. Why? Not for the reasons given. It cloaks the war on cash in patriotic dress. It says cash is the currency of the drug trade, of organized crime, and of course, terrorism. Cash is therefore pro-crime, pro-terrorism and anti-American. So they’ll try to convince you that surrendering your cash is good for the red, white and blue.
But something tells me drug lords and terrorists would find ways around the problem. They always do. Gold, silver, Bitcoin? Something else? Just as the TSA only seems to target law-abiding citizens, a cashless society would have the bureaucracy riding the innocent. They have most of the money in society.
And make no mistake, the government views cash with great suspicion these days. If you’re in the practice of depositing large amounts of cash, there’s an excellent chance you’ve been the subject of a “suspicious activity report”. Approximately 1.6 million suspicious activity reports were submitted to the federal government in 2013. I wonder how many involved drug dealers or terrorists.
But down to brass tacks. The cash economy is over $2 trillion. Consider for a moment the taxes the government isn’t currently collecting on that money. Uncle Sam certainly has. And he wants his cut.
If cash was abolished, not a transaction could occur anywhere under the folds of the stars and stripes that couldn’t be taxed. No kid could sell a cup of lemonade on a summer’s day without the taxman’s knowledge. Nor could he cut your lawn. And the dollar bill you give the bum on the corner would be worthless since no one else would accept it.
All financial privacy would cease to exist -- it would be a contradiction in terms. And there would be no escape. What North Korea or Cuba of the world could ever ask for more?
And that’s why the government hates cash with a purple passion. And why Uncle Sam is bucking hard for its abolition.
Banning cash is the economics of tyrants. Absolute control of the banking system has ever been the fantasy of despots. One of the chief mandates of the Communist Manifesto was to place all banking and credit under direct control of the state. Lenin would have gone over the moon if he could have abolished cash. Cash provides anonymity. And anonymity is the sworn enemy of totalitarians.
In the words of economist Martin Armstrong:
"In the mind of an economic tyrant, banning cash represents the holy grail. Forcing the plebs onto a system of digital fiat currency transactions offers total control via a seamless tracking of all transactions in the economy, and the ability to block payments if an uppity citizen dares get out of line."
It’s already happening in Europe. Just last month the central bank of Denmark announced plans to stop printing cash next year.
A prominent German economist proposed the same:
“Stand up for the abolition of cash, since coins and bills are obsolete and only reduce the influence of central banks.”
In other words, it would give central banks dictatorial control over our economic lives. And their record of economic management is so sparkling, no?
The war on cash is escalating and the cashless society is coming. And the U.S. will ultimately follow Europe’s lead. It won’t happen overnight. Pockets of the cash economy will remain. But even they will ultimately pass into that good night.
But the good news is, there’s a way to protect your money and your savings against financial totalitarianism. And yes, that’s what it is. You do have options. And it’s our job to bring them to you. And believe it or not, some believe the bankers’ agenda to ban physical currency may have led to the assassination of an American president. Unlikely? It might not seem so after you read this report. Click here to learn more about one important option.
That’s all for today. Thanks for reading.
© 2015 Laissez Faire Books, LLC.