by Nick Giambruno, International Man:
I recently sat down with Scott Horton on the The Scott Horton Show. If you want to get the real scoop on U.S. foreign policy, you must listen to his podcast. It’s simply the best there is on this topic. It’s one of the very few I always listen to.
Scott and I had an in-depth discussion on the U.S. government’s latest schemes… the War on Cash and negative interest rates.
I think you’ll find our conversation below informative and entertaining.
Nick Giambruno: Yes. There’s an annual World Economic Forum meeting in Davos, Switzerland. Leaders in business, government, media, and even some celebrities go to these events to discuss the big issues of the day. This conference happens every year in the open. But this year, I think a secret meeting took place during the conference behind the scenes, with huge historical significance…
Immediately after the conference, there was a big acceleration to eliminate paper cash, or at least high-denomination currency notes. A flood of articles from The New York Times, The Economist, Zero Hedge, and other publications picked up on this.
For example, a few days after Davos, the head of the Japanese central bank implemented negative interest rates for the first time ever. This was after he repeatedly denied that he was planning to use negative rates. It seems like something might have changed his mind at that conference. But that’s not all.
After the conference, the CEO of Deutsche Bank called for the elimination of cash. Norway’s biggest bank essentially did the same thing.
Bloomberg published a piece called “Bring on the Cashless Future.” Financial Times published something very similar. Then Harvard put out a paper talking about the need to eliminate high-value paper currencies, like the $100 bill and the €500 note.
Negative rates and the War on Cash really went into overdrive after this Davos meeting. I can’t conclusively prove that a secret meeting took place, but there’s a lot of circumstantial evidence that points to it.
Scott Horton: The ideas of negative interest rates and outlawing cash sound like crankery. Plus, we’re talking about the most powerful people in the world, their representatives in media, and their lackeys in government proposing this. This is something to take very seriously.
My question is if the banks are so powerful, why are they allowing the government to engage in this policy? It seems like it’s tailor-made to destroy their business.
Nick Giambruno: It is horrible for the banks, which earn a big part of their revenue charging interest. But they tolerate it because there’s another component of this. It’s the evil twin brother of negative interest rates… the War on Cash.
With negative interest rates, a lot of people would rather take their money out of the bank and put it under a mattress than suffer a penalty or a tax on saving money.
The economic central planners know this, and that’s why the War on Cash has been really ramped up along with the spread of negative interest rates around the world.
The banking system is very fragile. There’s not a lot of actual paper cash in banks. It’s mostly digital bytes on a computer. So if people start pulling paper money out of the banks en masse, it won’t take much to bring the whole system down.
Their solution is to make accessing cash harder, and in some cases, illegal. Take France, for example. It’s now illegal to do cash transactions over €1,000 without documenting it properly. That keeps cash in the banking systems. That makes the banks happy because if you can’t withdraw your cash, there can’t be a bank run.
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