The Phaserl


The Dethroning of Cash: Discouraged, Penalized, Even Banned?

by Stefan Gleason, Activist Post:

Stock market gyrations and deteriorating global economic conditions in the early goings of 2016 sent investors fleeing for safety. Or at least what is commonly thought to be safety.

Many in the financial media are now trotting out the bromide that “cash is king.” A sampling of recent headlines illustrates how pervasive the thinking is:

But how can cash be king when central banks around the world are working diligently and creatively to PUNISH holders of cash?

And our own Federal Reserve just asked U.S. banks this week make sure they, too, are ready for negative interest rates.

Central bankers have proven that 0% is no floor when it comes to interest rates. But negative interest rates create some peculiar problems. In theory, assessing interest on deposits rather than paying it out encourages funds to flow back into the economy. Negative rates make banks more apt to lend and consumers more likely to spend.

People Herded into Electronic Accounts So Negative Interest Rates Can Be Imposed

Unfortunately for the banks, though, negative rates encourage withdrawals of cash for hoarding. After all, dollar bills that pay 0% interest have a higher yield than savings accounts that charge interest!

The government surely doesn’t want to encourage a flight to physical cash. It drains the banks of their liquidity. And when cash transactions take place outside the banking system, authorities can’t track them, and that makes tax collectors jealous.

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1 comment to The Dethroning of Cash: Discouraged, Penalized, Even Banned?

  • Randy

    Well we’ll see just how far this wingless pig called a cashless society idea can fly when the drug trade kingpins start to bump off the proponents of it. Any serious talk of cutting off the life blood of their industry will have to result in some VERY serious repercussions. If their home addresses are not known already, they can quite easily be found out. I can almost guarantee that every last one of those cartels has a special fund of cash set aside and some people lined up with contracts to deal with such a situation as that when the time comes. All they need is a name and a down payment to get the ball rolling. Just look at all of the people down in Mexico who got their head lopped off and the body strung up on various bridges for crossing those guys! What was it a few years ago, 30,000+ people had died as a direct result of drug gang killings? My memory is not very firm on those stats, but they can easily be looked up if you really want to know for sure.

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