Here’s a chilling article from the Daily Telegraph (UK) on a proposal to ban cash transactions and only allow them via (govt. controlled) banks. Note how it is proposed that governments “manage” the economy by directly controlling spending. This is no fantasy — Denmark is moving toward this already.
“All payments (would be) made by…card, mobile phone apps or other electronic means, while notes and coins are abolished. Your current account will no longer be held with a bank, but with the government or the central bank. Banks still exist, and still lend money, but they get their funds from the central bank, not from depositors.
Having everyone’s account at a single, central institution allows the authorities to either encourage or discourage people to spend. To boost spending, the bank imposes a negative interest rate on the money in everyone’s account – in effect, a tax on saving.”
“Radical” ideas like this are often first floated using academics to gauge the public reaction. Then it’s often downhill from there. Here’s the article:
http://www.telegraph.co.uk/finance/personalfinance/comment/11602399/Ban-cash-end-boom-and-bust.html
And just recently the largest bank in the U.S., has enacted a policy restricting the use of cash in selected markets; bans cash payments for credit cards, mortgages, and auto loans; and disallows the storage of “any cash or coins” in safe deposit boxes. Here’s more: http://www.zerohedge.com/news/2015-04-23/largest-bank-america-joins-war-cash
I was thinking about dollar bills the other day. Each bill says it is a “Federal Reserve Note” right on the top — and is even signed (by the US Treasurer AND the Secretary of the Treasury, no less!) just like any other note. (Question: If the Federal Reserve issues the notes, why aren’t they signed by the chairman of the Fed?)
A note is an IOU. There are two types of notes: secured and unsecured. If I give you an IOU for $1,000 secured by my car, and if I don’t pay, you can take my car. If my IOU is unsecured and I don’t pay, you can sue me (signing an “unsecured” note means the creditor can sue you for anything you have if you default).
At one time US paper currency was secured by silver or gold stored by the US government. You could actually trade in your dollars for silver or gold coins:
You can’t do that anymore (except by buying silver or gold from private dealers, of course).
How is a Federal Reserve Note a real note? That is, how is it an IOU, a promise to pay? What is the Federal Reserve (not the US Treasury, by the way…think about THAT) promising to pay?
Gold? Silver? Of course not.
All the Fed will “pay” you for your Federal Reserve Notes are other Federal Reserve Notes.
That’s like me giving you my note and when it comes time to pay I give you another note.
A Federal Reserve Note is unsecured. Therefore, you have the right to sue them just like any other unsecured note, right? Good luck with that.
So we have an economy based upon people trading notes back and forth…notes that have nothing backing them up.
I think I’ll go buy some gold.
I understand your comment about buying gold. I have contemplated that myself. However what will you/we do when the government prohibits private ownership as was done in the 30’s ?
That was a different America. Outlawing gold ownership today would be even less effective than the laws against drugs.
I saw a article 2 weeks ago where Jamie Diamond said Chase doesn’t want cash.
by Michael McDonagh, J.D.
Interesting. But I would not lose a minute of sleep over this because:
1. There are many, many crazy ideas out there – I am sure this is but one of countless others. The only reason this gets its 15 minutes of fame is because it was picked up in a traditional major new outlet and read my intelligent people like you, along with a vast number of people who read it without any real comprehension. Without having been given space in a publication, this idiotic idea would remain alone among the clueless cognoscenti.
2. Rather than going to a “no currency” society, there is already movement afoot to move to a “multi-currency” society. Exhibit #1 is bitcoin, and there are others.
3. There are too many stakeholders in a cash economy to allow stakeholders in a cashless economy to assert complete dominance. Exhibit #1 is the legal marijuana industry which requires cash because no bank with federal insurance or a federal charter will touch money connected to marijuana. This industry is growing and expanding, and governments are relying on its taxable proceeds. A similar addiction is government’s reliance on the gambling industry and its taxable proceeds.
4. As we saw in the last financial crisis debacle, the real power in this country is held by private-sector bankers running private-sector banks, and there is too much of their personal welfare and the economy tied up in and around cash, and its generation and movement to consider allowing any of that to be made subject to public control, and then eliminated.
O.K. This is only my point of view, because there is no legal sntace that would ever/could ever or had dealt with such a meltdown.If the US ever did collapse beyond any comprehension we know about .The $ could indeed become worthless .Countries that , lets say, were owed trillions of dollars, could ask to have collateral give against the loan but it is so unlikely, it is not worth considering. The US would be forced to sell/lease out viable assets .oil reserves,oil resources, gold etc. Railways and of course Land e.g. Alaska.At this stage, you own property would in effect be worthless, market collapse.You would owe money to the mortgage lenders, but it is likely that company would have collapsed as well. What third party would want to take on/buy these debts outstanding, when repayment was going to be unlikely ..I would imagine, if this dire positon did every happen, you would have a huge civil unrest and it wouldbe every man for himself and a brand new order would have to grow from the ashes, which would take years. Imagine what happens after a nuclear explosion . Keep smiling though