Did you know that governments and their central banks are deep into something that can realistically be called a “global war on cash?” If this is the first you’ve heard of it, don’t be surprised. Most people, particularly in the USA, have no idea this is going on. While this might sound like no big deal, in reality, it could have a huge impact on your dreams of being freer tomorrow.
At the end of this post you’ll find an impressive infographic that lays out the facts about the global war on cash far better than I ever could. What I want to do in this post is quickly summarize the situation and how this “war” conflicts with your quest for freedom.
Governments hate cash. Bankers, particularly central bankers, hate cash too. That seems weird, since cash is so useful and practical for regular folks in day-to-day life. But governments and central bankers (I’ll call them “those guys” for convenience from now on) see things differently. To them, cash is a major headache.
Cash has several characteristics that make it annoying to those guys. The big problems are that cash:
Cash, being physical stuff, requires effort to print, transport, and so on. Digital transactions have none of those problems. Those guys could save a lot of money and hassles if all transactions were digital.
If you have cash, you can use it without going through the banking system. If I want to buy a computer from you, I just hand you the cash, and we’re done. No need for anyone else to be involved.
You would think that this would be a positive for those guys, since they don’t need to touch the physical cash. But those guys don’t think like we do. Instead of being happy that people can do stuff without burdening the financial system, this really pisses them off. Why? Cash is out of their direct control. The central bankers in particular believe it is their job to manage economies by manipulating the money supply. It is very hard for them to manipulate cash. Let’s look at one way this is playing out in the global war on cash.
Recently central banks in several countries have experimented with negative interest rates. This means that instead of the bank paying interest on the money you deposit with them, you pay them money. In other words, if you deposit $1000 in a bank with negative interest rates, a year from now, you will have less than $1000 in your account instead of more.
Governments are doing the same thing with bonds. There are trillions of dollars worth of bonds with negative interest rates out there right now. It sounds insane, but there are economists around the world who are convinced that the secret to reviving the global economy is imposing negative interest rates. The idea is that once negative interest rates get high enough, you will stop hoarding your money (saving for your retirement or whatever) and spend it right now to boost the economy.
But there’s a problem. Regular folks like you and me aren’t stupid. If those guys decide that we are going to have to pay them to keep our money in the bank, we’re going to take our money out of the banks. Cash doesn’t earn any interest, but at least we wouldn’t be paying the bankers to hold it for us.
The solution being promoted by some economists and related ‘experts’: outlaw cash so people have to keep their money in banks. That way we can’t escape negative interest rates or whatever else those guys decide to do to us.
This is another thing that really pisses off those guys. People can use cash to do things without the government or the bankers knowing about it. You could sell me a computer for cash, and those guys might never find out.
They hate the idea of people doing stuff without them knowing about it. We might have just made a taxable transaction. Or we might have made a transaction the government doesn’t approve of. In a world where governments spend trillions of dollars a year to capture, record, and analyze our every tweet, instant message, and email, letting people buy and sell stuff anonymously is simply unacceptable.
Now let’s talk about why I’m writing about this on Freer Tomorrow. The end goal of the global war on cash if to eliminate it from the world. To force every financial transaction to go through the banking system. What you do with every penny you earn and spend will go into a government database for analysis. You will have no financial privacy.
More directly, your government will have total control over your money. Everything you do with your money will be at the sufferance of those guys. Look at what happened in Cyprus a few years ago. The government shut the banks down so they could skim off money from everyone’s account to save their banking system. People who had cash on hand could continue life in some manner. People who had all their money in the banks were screwed until the government chose to give them access to their money again (the portion of it that the government didn’t confiscate first).
To me at least, part of being free is knowing that you have the resources to survive in a crisis. Having cash on hand is a major part of being able to do so. In a world where there is no cash allowed, all you can do is pray that those guys rescue you before it is too late.
Now that you have seen my take on why you need to know what’s up with this global war, I urge you to check out the infographic below. You and I have little power to influence the outcome of this cash war. Even so, once you understand what is going on, you can take steps to protect your freedom. We will talk about some of those steps in the future.
Five Cryptos to Know for a Freer Tomorrow