War on Cash – Happening Faster Than We Ever Imagined – Here Are Some Examples You May Have Missed

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War on Cash – Happening Faster Than We Ever Imagined – Here Are Some Examples You May Have Missed
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It’s happening faster than we could have ever imagined.

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Every time we turn around, it seems, there’s another major assault in the War on Cash.

India is the most notable recent example– the embarrassing debacle a few weeks ago in which the government, overnight, “demonetized” its two largest denominations of cash, leaving an entire nation in chaos.

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But there have been so many smaller examples.

In the US city of New Orleans, the local government decided earlier this month to stop accepting cash payments from drivers at the Office of Motor Vehicles.

As I wrote to you recently, several branches of Citibank in Australia have stopped dealing in cash altogether.

And former US Treasury Secretary Larry Summers published an article last week stating that “nothing in the Indian experience gives us pause in recommending that no more large notes be created in the United States, Europe, and around the world.”

In other words, despite the India chaos, Summers thinks we should still curtail the $100 bill.

The conclave of the high priests of monetary policy almost invariably sings the same chorus: only criminals and terrorists use high denominations of cash.

Ken Rogoff, Harvard professor and former official at the International Monetary Fund and Federal Reserve, recently published a book blatantly entitled The Curse of Cash.

Ben Bernanke’s called it a “fascinating and important book”.

And, shockingly, a number of reviews on Amazon.com praise “brilliant” Rogoff’s “visionary concepts” in his “excellent book”.

Rogoff, like most of his colleagues, contends that large bills like the $100 or 500 euro note are only used in “drug trade, extortion, bribes, human trafficking. . .”

In fact they jokingly refer to the 500-euro note as the “Bin Laden” since it’s apparently only used by terrorists.

Give me a break.

My team and I did some of research on this and found some rather interesting data.

It turns out that countries with higher denominations of cash actually have much lower crime rates, including rates of organized crime.

The research was simple; we looked at the World Economic Forum’s competitive rankings that assesses countries’ levels of organized crime, as well as the direct business costs of dealing with crime and violence.

Switzerland, with its 1,000 Swiss franc note (roughly $1,000 USD) has among the lowest levels of organized crime in the world according to the WEF.

Ditto for Singapore, which has a 1,000 Singapore dollar note (about $700 USD).

Japan’s highest denomination of currency is 10,000 yen, worth $88 today. Yet Japan also has extremely low crime rates.

Same for the United Arab Emirates, whose highest denomination is the 1,000 dirham ($272).

If you examine countries with very low denominations of cash, the opposite holds true: crime rates, and in particular organized crime rates, are extremely high.

Consider Venezuela, Nigeria, Brazil, South Africa, etc. Organized crime is prevalent. Yet each of these has a currency whose maximum denomination is less than $30.

The same trend holds true when looking at corruption and tax evasion.

Yesterday we wrote to you about Georgia, a small country on the Black Sea whose flat tax prompted tax compliance (and tax revenue) to soar.

It’s considered one of the most efficient places to do business with very low levels of corruption.

And yet the highest denomination note in Georgia is the 500 lari bill, worth about $200. That’s a lot of money in a country where the average wage is a few hundred dollars per month.

Compare that to Malaysia or Uzbekistan, two countries where corruption abounds.

Malaysia’s top cash note is 50 ringgit, worth about $11. And Uzbekistan’s 5,000 som is worth a paltry $1.57.

Bottom line, the political and financial establishments want you to willingly get on board with the idea of abolishing, or at least reducing, cash.

And they’re pumping out all sorts of propaganda to do it, trying to get people to equate crime and corruption with high denominations of cash.

Simply put, the data doesn’t support their assertion. It’s just another hoax that will give them more power at the expense of your privacy and freedom.

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9 COMMENTS

  1. Very strange. One commenter is posting pure bs but Valuewalk prevents a down vote and will not accept a reply that exposes the obvious and pathetic lies. Valuewalk? lol. . . .

  2. Seeing the contemporary world’s various governments for what they (almost completely) are – organized crime rackets – is the epitome of honesty. It’s not dishonest to lie to such governments, and to hide things from them. In fact, to *not* be dishonest to them is *true* dishonesty – because you’re refusing to see them for what they are.

  3. And that holds true to even American ‘government’. People aren’t ‘honest’, especially when Congress has systemically imbibed the notion that not-paying any tax no matter how rich you are is normal and won’t attract trouble. Honest people are those who know their income exceeds the limits set by the govt and willingly pay taxes on them. Not all of India has the same mindset like you have.

  4. Almost all “corruption” is just honest people not wanting to be stolen from (sorry, “taxed”) by corrupt people calling themselves a government. The more empowered the “corrupt” are, the better.

  5. Avenger : For some strange reason I could not down vote your comment. Here is your downvote : Anybody who promotes a cashless society is either a totally brainwashed fool unable to think, or, a pathetic shill for bankers who’s greed knows no bounds. Suggest you go back to the drawing board and dream up some at least fairly plausible ‘reasons’ for your most unreasonable argument. Funding terrorists? Really? Even stupid people don’t buy that one anymore.

    How about End the Fed and thus forever end the ability of bankers to create currency from nothing and charge the world ‘interest’ on it. One cannot help it if he or she is born into a banking family. Choosing to be a banker boy b for a few ‘credits in the system’ is beyond pathetic.

    Bankers removed gold from the world’s currencies in the thirties and then removed silver from all currencies in the sixties and now are attempting to remove cash from the world’s currencies. You support this tyranny and legally sanctioned theft of the banking families? You might want to consider running for office – predict you’ll do very well and you’ll receive substantially more ‘credits in the system’ than posting piss ant comments on the net.

  6. Avenger : For some strange reason I could not down vote your comment. Here is your downvote : Anybody who promotes a cashless society is either a totally brainwashed fool unable to think, or, a pathetic shill for bankers who’s greed knows no bounds. Suggest you go back to the drawing board and dream up some at least fairly plausible ‘reasons’ for your most unreasonable argument. Funding terrorists? Really? Even stupid people don’t buy that one anymore.

    How about End the Fed and thus forever end the ability of bankers to create currency from nothing and charge the world ‘interest’ on it. One cannot help it if he or she is born into a banking family. Choosing to be a banker boy bi for a few ‘credits in the system’ is beyond pathetic.

    Bankers removed gold from the world’s currencies in the thirties and then removed silver from all currencies in the sixties and now are attempting to remove cash from the world’s currencies. You support this tyranny and legally sanctioned theft of the banking families? You might want to consider running for office – predict you’ll do very well and you’ll receive substantially more ‘credits in the system’ than posting piss ant comments on the net.

  7. The purpose to remove currency/cash is to reduce privacy under the guise of greater security. This will certainly increase the governments control over the citizen. As for it making society better is based on ones value system. The wise authors of the US Constitution highly valued privacy of the individual.
    We may just be setting the stage for reinventing the wheel as it relates to the liberty of the individual.

  8. Every military aged man in Switzerland has a machine gun in the closet – that’s why there is no crime. All men belong to the military!!!

  9. “embarrassing debacle”? Says the outsider with no perspective or rationality of what it was/is to be a citizen of India. Its being hailed as the biggest move against corruption (with more policies on its way) by a leader who is finally shaking off the shackles of 10 years of misrule by the previous government. The common people are overwhelmingly in support of the Prime Minister for what many called ‘a political suicide’. Surprisingly, the only people who protested against this move were those who were bribed from other political parties to join rallies (many examples on camera) and shutdown India for a day (Bharath Bandh) which fell flat on their face with people working extra instead of supporting the protests.

    India isn’t trying to demonetize high-value currency. Its trying to bring down corruption, black money hoarded in cash, inflation and counterfeit notes which are mainly funding terrorism. India has brought out the 2000 rupee note and a new version of Rs. 500 as well. Mr. Modi is trying to bring about a less-cash society for now and increase digital literacy of people which is surprisingly succeeding considering the state of online connectivity in the country. The next time you might want to get off your high-horse and write an article worth reading instead of random facts chucked in and saying you have proven something.

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