Currency Reset Confirmed🚨 A Farewell To Paper Money? 2020: The FALL Of The Economy? - financialanalysis

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Thursday, December 26, 2019

Currency Reset Confirmed🚨 A Farewell To Paper Money? 2020: The FALL Of The Economy?


A decade or more ago, I began to discuss with associates the possibility of governments and banks colluding to eliminate physical cash. Back then, the idea struck most everyone as poppycock, that governments could never get away with it.
I didn’t write on the subject until 2015, when several countries had begun to limit the amount of money a depositor could extract from his bank account. At that point, the prospect that central banks might conceivably eliminate cash was looking less like an alarmist fantasy, and it became possible to write on the nascent issue.
In a nutshell, today, in most of the world’s most prominent countries, the people who control banking are the same people who pull the strings in government. A cashless system therefore seemed to me to be a natural, as it dramatically increased both profit and power for both banking and government – an opportunity that can’t be passed up.The Benefit to Banking
Some banks have been delving into negative interest rates, which is a euphemism for charging you to keep your money in the bank, so that they can loan it out for their own profit. You actually lose money annually by having it on deposit.

Of course, some people accept negative interest rates in order to retain the imagined safety of having their cash in a bank vault, rather than at home. Others tolerate it because they value the convenience of using ATMs and chequing.
But anyone else may simply decide to store their money at home and save the “reverse interest” charges.
But what if cash were eliminated? No one would have a choice. They’d have to have a bank account and use it for all transactions, or they couldn’t purchase goods or pay bills.
Once everyone accepted the concept that bankers had total control of transactions, that this was “normal,” banks would be in the catbird seat. They could raise the transaction fees considerably over time and the depositors would be unable to exit the system.
The Benefit to Governments
Governments would thoroughly endorse the idea, because it would mean that, for the first time, they’d have access to all information on your economic activity. The necessity of allowing people to file for income tax would vanish. In future, they could assess your annual tax themselves and take it from your account by direct debit. They could also begin taxing you monthly rather than annually, “for your convenience.”
And in the bargain, we could anticipate that the charges would be numerous, confusingly worded on the monthly statement and difficult to figure out. That would allow both the banks and the government to periodically effect incremental increases.
Once all your transactions were monitored, those that are “suspect” could be noted and even refused. Purchases at gun shops could be classified as “terrorist-related.” A transfer to a realtor in Panama could be classified as “money-laundering.”
Since the War on Cash has become recognized in the last few years, many people have turned to cryptocurrencies as a means of retaining monetary freedom.
However, as the future of financially pillaging the populace depends on ensuring that the populace have no option other than banks, will governments allow cryptos to flourish?
Not if they can stop it. But can they?
It’s been my contention that banks will at some point, launch their own cryptos, whilst doing all they can to discredit non-central bank cryptos as being potentially criminal.
The Bank of Canada is now considering launching a digital currency that it says would help it combat the “direct threat” of cryptocurrencies. It would initially coexist with paper money, but would eventually replace it completely.
They state further that banknotes are becoming obsolete as a means of payment, creating problems for the banking system as a whole: “The time may come that merchants/banks find it too costly to accept banknotes.”
Translate that to mean that, if you insist on using banknotes, the bank will have no choice but to charge you a premium for their use.
This has come on the heels of the plan by Facebook to release libra, its own cryptocurrency. The Bank of Canada states that “Facebook’s digital offering is losing key backers and facing scrutiny from regulators worldwide, including the Bank of Canada.”
It suggests that central bank digital currencies allow banks to collect more information on Canadians than is possible when people use cash. “Personal details not shared with payee, but could be shared with police or tax authorities.”And if there are any remaining uncertainties to the benefits of non-central bank cryptos, they added, “Cryptocurrencies may become a direct threat to our ability to implement monetary policy and lender of last resort role.”
On the surface, the statement from Bank of Canada appears to be an announcement of banking progress, for the betterment of depositors. But it’s the first report, to my knowledge, in which a bank declares bitcoin and other non-central bank cryptos as a “direct threat.”
The above statement is a forerunner to declaring non-bank cryptos to be criminal in nature. Cryptos offer the hope of monetary freedom and that can’t be allowed.
At some point, we can expect banks to disallow any payment for cryptos such as bitcoin through central bank cryptos and refuse accounts to anyone who has a history of dealing in non-central bank cryptos. The objective will be to eliminate the possibility that your grocer or gas station, along with any other bank depositor, might accept bitcoin. The intent will be to send bitcoin to the crypto graveyard.
Unlike gold, bitcoin is intangible and cannot simply be stuffed in the mattress until such time as it regains its acceptance for convertibility, as gold has in the past. It doesn’t exist in physical form and only has a perceived value if another party is prepared to accept it in payment.
The War on Cash is a war on your economic freedom. At present, most people still retain the ability to remove their wealth from the system, move it to a more wealth-friendly jurisdiction and hold it to forms that will retain value in the future.
That window may close sooner, rather than later.The Wealth Redistribution Scam that Is "Inflation"The world over people are told that central banks pursue “price stability” by making sure that consumer goods prices do not rise by more than 2 percent per annum. This is, of course, a big sham. If the prices of goods rise over time, it does not take that much to understand that prices do not remain stable. And if the prices of goods increase over time, it necessarily means that the purchasing power of the money unit declines.As money loses its purchasing power, income and wealth are stealthily redistributed. Some individuals and groups of people are enriched at the expense of others. Savers and workers are swindled out of their deserved income and retirement benefits, while those who own goods that rise in value or who borrow money typically reap a windfall profit. Clearly, the banking industry is a major beneficiary of monetary debasement.
"Inflation" Is a Rise in the Quantity of Money
Central banks are the very source of the phenomenon that all prices of goods tend to rise over time. They hold the money production monopoly and increase — in close cooperation with commercial banks — the outstanding quantity of money through credit expansion, an increase in the supply of credit that is not backed by real savings. It goes without saying that it is rather profitable to be active in the money-production business.
The increase in the quantity of money results, and necessarily so, in higher prices compared to a situation in which the quantity of money has not been increased. This is no arbitrary assertion but stems from logical reasoning: a rise in people's money holding lowers the marginal utility of the additional money unit, meaning that the marginal utility of other goods that can be exchanged against money rises.
Consider the case in which the quantity of money in the hands of market agents rises. People will then exchange money balances (which have, from the viewpoint of the money holder, lost in marginal utility) against other vendible items (which have gone up in marginal utility). As people exchange money units against other goods, money prices go up (compared to a situation in which the quantity of money has not been increased).
The Mainstream Explanation and Its Problems
Of course, in real life additional factors (such as, for instance, demand changes, market introduction of new products, etc.) interfere with the link between the increase in the quantity of money and the rising prices of goods. This, however, by no means refutes the economic insight that a rise in the quantity of money in the economy leads to goods prices that will be higher than if the quantity of money not been increased.
The increase in the quantity of money is what deserves to be called inflation; rising prices are just a possible symptom of an increase in the quantity of money. However, mainstream economists typically define inflation as rising consumer goods prices. This, however, is problematic for at least two reasons. First, by equating inflation with rising prices, the real reason for higher prices, namely the rise in the quantity of money, is obscured.
This, in turn, gives rise to arbitrary explanations of why goods prices may go up: sheikhs who force up oil prices, unions that cause wages to rise, an overall buoyant economy that creates shortages in production factors, and so forth. All these pseudo-explanations deflect from the real culprit — the central bank, in cooperation with commercial banks, which issues new money, so that people no longer understand who, in fact, harms them.
Asset Price Inflation
Second, changes in consumer goods prices do not tell us the entire story, for they do not take into account asset prices such as, for instance, stock prices, housing prices, and land prices. However, the newly injected money can be expected to not only push up consumer goods prices, but also drive up asset prices. And like rising consumer prices, rising asset prices diminish the purchasing power of money.
In other words: asset price inflation destroys the purchasing power of money in the same way that price inflation of consumer goods does. Take, for instance, stock market prices. If prices rise from, say, $100 to $200, the purchasing power of the money unit would drop by 50 percent. The owner of the stock becomes richer, while the holder of dollars become poorer. In fact, this is precisely what has been happening in the last decades.
For illustrative purposes, let us take a look at the chart above. It shows the development of the US quantity of money, nominal GDP, and stock prices from 1996 to autumn 2019. In the period under review, the US nominal GDP increased by 4.3 percent per annum on average. The quantity of money rose by 6.1 percent, while stock prices expanded by 8.1 percent. To the attentive observer, these numbers contain an important message.The increase in the money supply does not only raise prices of consumer goods, but also tends to raise all prices. For instance, in the period under review, on average, the real GDP in the US rose around 1.9 percent per year while prices of goods and services that are included in US GDP went up by 2.4 percent. The remaining “excess money” obviously pushed up stock prices and other asset prices such as for instance, housing prices.
Don’t Put Your Trust in Today’s (Fiat) Money
The lessons to learn are these: always think of inflation as a rise in the quantity of money. Be aware that central banks and commercial banks provide a kind of money that does not keep its purchasing power — that most people suffer losses when holding it for the purpose of storing wealth. Better not to put your trust in today’s money and keep your transaction balances as small as possible. Don’t be taken in by the inflation sham.
The insights outlined above should encourage all of us to join the call for better, sound money — money that lives up to the highest economic and ethical standards. This can be achieved by simply creating a free market in money, where people are free to choose the kind of money they would like to use, and where entrepreneurial spirits are free to make their fellow people sound-money offers.
A free market in money — which would be tantamount to putting an end to central banks’ money production monopolies — is actually easy to establish. Just strip the official currency of its privileged "legal tender" status and remove all capital gain and sales taxes on all media that stand an excellent chance to compete for becoming currency — most notably gold and silver but potentially also crypto units.
A free market in money will work wonders. Many of the evils that haunt our world today — be they chronic price inflation, financial and economic crises, boom-and-bust cycles, and even over-funded governments and aggressive wars, would be greatly reduced. One of the biggest challenges of our time is to reform our money. The solution is to open up the market in money.

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