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Inside the Black Hole of Negative Interest Rates

Many nations that experimented with the Fed’s economic recovery plan are now going beyond the outer limits into the twilight zone of negative interest rates. Some of these nations continued to skirt in and out of the edge of recession throughout their years of economic stimulus; so, now they’ve powered their programs into hyperdrive to see if they can escape the gravity of their circumstances. Their situation appears desperate and hopeless.


Reality in the alternate universe of zero interest rates and quantitative easing


Immediately after the Fed’s economic acceleration ended in the US, we’ve watched $3 trillion of paper wealth get sucked into a stock market collapse in less than one-and-half months, and that collapse appears to be accelerating to where the Fed is now talking about negative interest rates, too.

In spite of such talk, we are told the US cannot be in recession because recessions typically begin nine months after a bear market breaks out. That premise may be “typically” true, but what is typical about the present situation? Do things work the typical way when you are crashing back down into a recession you never really escaped? Perhaps the Great Recession was the black hole of all recessions. For all of our efforts, we have not escaped it and feel ourselves pulled right back into it now that we’ve exhausted our fuel on futile financial experiments.

Once nations moved into zero interest rates, we entered such a strange new realm of economics that no one in history has ever experienced this kind of an economy. As nations now move past that bound into negative interest rates, can we really know what is “typical” anymore? I think the word “typical” simply doesn’t apply in our present circumstances.


“Trying to divine the end of the rout is difficult given the globe is in the midst of a series of tightly intertwined, self- reinforcing, and correlated trades and narratives (i.e. oil slumps and drags inflation down with it which prompts central banks to ratchet up accommodation which sinks banks which crushes general market sentiment and the overall price declines tighten financial market conditions and scares corporate execs and actual economic activity begins to deteriorate),” conclude [JP Morgan] traders. (Bloomberg)


Seven years of zero-interest targeting by central banks means we have entered an alternate universe where market dynamics are different to such a degree that economic nature is no longer what we are used to: True price discovery of the right cost for credit vanished long ago. True price discovery in the asset market ceased to exist because prices may rise to virtual infinity when trillions of dollars are practically free. Risk ceases to matter when money is practically free in any amount necessary to accelerate the economy … so long as you’re a preferred customer of the Federal Reserve (but not for anyone else).

In such a bizarre universe, recession may appear in multiples spaces at the same time once a central bank ends its artificial stimulus because all the distortions are so intertwined. Maybe the move to an inflated universe that happened from years of massive quantitative easing doesn’t unwind by just reversing from where we are back to our point of entry. Maybe this unusual universe unravels everywhere all at once so that recessions are not preceded by bear markets, but happen simultaneous to them. Maybe we see a bear stock market here and bear bond market there and a bear commodity market further over there — all markets that are moving into recession.

I believe all the frayed ends we see today are evidence of global unwinding from years of quantitative asset inflation. Zero interest is now completely ineffective, as I predicted it would become by fall of 2015 due to the law of diminishing returns — one of the realities we pretended we could live outside of. That law now demands we move into negative interest as the final flawed step of a rescue program so clearly unsustainable and so risky that it boggles the mind it was ever undertaken in the first place. What central planners are oblivious toward, however, is that negative interest is a black hole into an even more bizarre universe.


Experts often take risks beyond quantifying because they are experts


Will the US central bank follow others and zoom into the realm of negative interest rates, pretending they understand all the risks when they clearly did not even understand all the risks of zero-interest rates?

Let us look at the nature of human arrogance in the face of human ignorance.  Humans are currently ramping up the accelerated ramming of nuclear particles in Cern, Switzerland, after the director of the program said there was “only a minuscule chance” they would create a black hole by accident. “Only a minuscule chance” of creating something that could devour the entire galaxy if created? That apparently is a risk worth taking, since it is so unlikely?

But these are scientists and should be trusted because scientists know stuff. Remember how nuclear scientists assured us there was no chance of a meltdown at Fukushima? I thought, as they said it, “A meltdown has probably already started. Nothing would withstand this many shocks.” Sure enough, Fukushima was already melting down, even as scientists on television assuaged our fears by telling us that meltdown was impossible due to failsafe human engineering.

Turns out science and engineering had not quite accounted for the combined and very minuscule chance of a 9.3 earthquake, several 8-point earthquakes, hundreds of 7-point earthquakes and thousands of 6-point and lower earthquakes, plus a tsunami of ice-cold salt water, followed by overheating due to cooling systems being knocked out, followed by major explosions that blew the roof off the containment buildings, followed in turn by dousing the red-hot reactors with days and days and tons of tons of additional ice-cold water.

I mean, what are the odds of all that happening? Zero, right? There is no way so many horrible and extreme variables could happen in the same place at nearly the same time, right? Well, turns out it did happen and that, good as the human engineering was, it was not up to the impossible odds of so many stresses happening one after the other and sometimes simultaneously. But the human plans were failsafe and had accounted for every realistic possibility. Turns out sometimes the unrealistic possibilities take over.

Likewise, there was also only a minuscule chance that scientists would create a more dangerous mosquito when genetically engineering a replacement to the mosquito that spreads dengue fever. Just to be extra cautious, they built in a genetic failsafe, which would only allow the genetically modified mosquito to continue to breed in the presence of the antibiotic tetracycline, which they could withhold from the mosquitoes environment once it had finished its job of breeding the bad mosquitoes out of existence.

Unfortunately, those scientists didn’t stop to realize that tetracycline exists out in the Brazilian countryside in significant amounts where the GM mosquito was being released because Brazil raises a lot of beef that poops out the antibiotics that the cattle are fed. That meant Brazil was literally littered with tetracycline. The great minds hadn’t thought of that. Now we have dengue fever appearing as an epidemic in Hawaii, and Zika virus spreading rapidly because it turns out the new genetically modified mosquito has a great propensity to spread Zika virus, which was a variable the scientists also hadn’t thought of, though the plan was failsafe due to the tetracycline key.

Based on this brief survey of the risk great minds will readily take based on their hubris, I don’t think it is a stretch to think the arrogant minds of the central bank’s mad wizards of of economic alchemy might have already created a disaster they cannot contain, and that there is fair likelihood they will accelerate right into the center of such a disaster if they hit the hyperdrive of negative interest rates. There is, after all, only a minuscule risk that negative interest rates will turn out to be the black hole of the financial universe.

Our central bankers and the publications that are now encouraging us to follow their lead tell us not to fear negative interest rates. They tell us we should not fear the ramifications of massive changes to thousands of years of financial evolution because the central banks have built in failsafe mechanisms. The odds of an unseen catastrophe — like a black hole that can eat up an entire galaxy over time — are minuscule. Besides that, our central bankers are smart — very, very smart — and they have the courage to lead, so we should have the courage to follow. Just ask them.


What might negative interest rates look like in the near future?


As I said in a recent comment on another article on this blog, we’ve completely moved away from the sound fundamentals of capitalism and into derivative capitalism — something that looks like capitalism because it was derived from capitalism but it smells of halibut genes spliced with tomatoes where we don’t even know anymore if we’re eating a plant or animal. (Yes, that is another one of the real wunderkind creations of the GMO crowd! Hallelujah!)

I don’t even know how one should categorized this capitalist-born, debt-laden, service-based, minimally-producing, semi-fascist, centrally controlled, bank-run, artificially monetized economy. I guess one would best call it “junk.” It’s junk economics. Our emerging brave-new-world economy is a jalopy of wired-together, custom, hot-rod and worn-out parts. “Trust us,” our pilots say, “This baby will fly straight through the outer bounds of the known universe and come out glorious on the other side.” Let us hope the caterpillar truly emerges as a butterfly because it looks like the journey is already being dialed in.

The central banks already started going negative in other parts of the world in an attempt to save us from their fake recoveries. In fact, they are already going more deeply negative because the dip into the negative-interest zone isn’t working. Still, “Trust us. Don’t audit us,” they say, “because we are good at what we are doing.”

… And, yet, those negative rates are already causing problems to where bankers and economists around the globe are crying loudly about the need for societies to become cashless quickly before the banks fail from the sided effects.

If negative interest fails by squeezing under-reserved banks, what will the attempted resolution to that problem look like? Will central bankers print cash to distribute directly to consumers in an attempt to inflate consumerism? Or will they confiscate cash in order to save their own member banks?

The central bankers are, of course, certain that they have already engineered plenty of safety buffer into the reserves of the banks; but that reminds me of the Fukushima engineers and scientists who felt they had engineered the reactors to withstand every stress that could reasonably be thrown at them, forgetting that sometimes the real world moves beyond reasonable expectations.

Will nations go cashless as major banks and globally famous economists are now calling for us to do? Will they offer 90% on the dollar or pound or euro for return of cash by a certain date, followed by 80% and then 70 and on down to zero in order to put an end to the cash already in circulation?

Will we crash into the proverty of the thirties or something even worse? If we see that coming, will those who are opposed to going cashless now change their words like a man facing torture in order to avoid the approaching pain? Will the cash crowd, say, “Go cashless and spare us the pain?” Even after nations go cashless, won’t the banks exact more money out of you 3% or 4% at at time … endlessly … just for holding on to your money from one month to the next once they have that power?


(Black hole as symbol of negative interest rates policy.) By XMM-Newton, ESA, NASA [Public domain], via Wikimedia CommonsWhat have we observed of negative interest rates so far?


Banks want to see stocks rise, especially their own; the stock market want’s to see interest reduced again, but interest virtually has nowhere down to go but negative, and banks squeal with pain when punished with negative interest on their reserves. It’s a vicious circle where interest cannot go lower without hurting the banks. Can this new reality unwind without falling apart everywhere?

Negative Interest Rate Policy is the Hadron Collider of economics. It’s performing experiments that have never been tried before — at least, not at any kind of national level. But we already have a glimpse of what life looks like inside of that black hole. We can hear the screams of those who have already entered. The reports are already coming in.


It seems that financial markets increasingly view these experimental moves as desperate and consequently damaging to financial and economic stability. (PIMCO’s Scott Mather, ContraCorner)


And, yet, we want to go there.

When Japan hit its hyperdrive and punched into negative territory, it turned out taking interest down into the negative realm had a reverse effect. Instead of pushing stock markets up, as it had hoped, they plummeted after an initial brief rise. The market acted with revulsion when Japan went negative. Banks took the biggest hit, falling 28%.

Maybe having your atoms squeezed through the singularity of a black hole into the negative-interest universe makes one nauseous. Stocks didn’t go up; they threw up.

And, yet, we still want to go there.

The nearly instant revulsion didn’t prevent the governor of Japan’s central bank from saying he will go even deeper into negative territory if necessary. Yes, he will plunge his nation deeper into something that is making the problem worse in order to solve the problem. I guess this is how great minds think once they have entered the negative universe where everything is the opposite of the universe we are used to.

JP Mogan believes Japan can go as low as -3.5% without creating a run on the banks, although they fear a flight to cash in inevitable if negative interest is pursued too aggressively, but they recommend, all the same, that Japan push the edge of the envelope:


“It appears to us there is a lot of room for central banks to probe how low rates can go,” they said. “While there are substantial constraints on policymakers, we believe it would be a mistake to underestimate their capacity to act and innovate.” (Bloomberg)


Raising interest rates on the deposits of ordinary savers (called negative interest because the banks used to pay you, and now you’ll pay them) is something these banksters refer to as “innovation.” That is a true banister’s idea of creativity! New ways to suck money out of the little guy! They warn, however, that there is currently one limit on their innovation — the availability of cash as an escape pod from the negative-bound mothership.

The alternate nature of this new financial universe can be seen in the trajectory taken by the yen. Rather than going down further in value as happened when interest rates were going lower while Japan was still in the positive zone, it went up. That was an unexpected result.

Unexpected results imply unexpected risks, especially when things work in the exact opposite manner from what you expected. Delving rapidly into this unexplored territory, central-bank economists look like mad scientists, recklessly pursuing new discoveries on the blind belief that really bad things just cannot happen because they are smart enough that they’d see it coming.

All that is needed to summarize all of this is any one of several words or phrases: Fukushima, Chernobyl, Three-Mile Island, fracking quakes, Zika virus.

Nevertheless, that is where our central banks are determined to go now that zero-interest rates have clearly failed to deliver a sustainable recovery:


International Monetary Fund director Jose Vinals said this week that central banks will continue to push interest rates further below zero if policy makers decide that’s best for the economy. (ContraCorner)


Negative rates have helped global stocks enter a bear market, sent the cost of protection against corporate defaults soaring and driven investors to havens such as U.S. Treasury bonds and gold. “Central banks are getting out of control; They are now more a problem than a solution,” said Stephen Jen, co-founder of SLJ Macro Partners LLP in London and a former IMF economist. “Central banks keep trying newer things, but we increasingly see breakages in banks, in the markets.” (Bloomberg)


For my own part, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s. I didn’t see any of that coming until it happened. (Janet Yellen to the Financial Crisis Inquiry Commission, 2010 (27 minutes into the recording))


Fukushima, Chernobyl, Three-Mile Island, fracking quakes, Zika virus.

Riksbank, Sweden’s central bank, got no benefit from exploring where no man has ever gone before — i.e., beyond the negative-interest bound — so it decided last week to double down, penetrating almost twice as deep into economic oblivion to see if going twice as negative would improve the results.

With Sweden’s subzero rate now at 0.50%, Riksbanks has said it will go even further subzero if necessary. Apparently, there is no end to the madness, even when it isn’t working. Sweden, however, believes it is working because it is bringing rates down on loans. (That doesn’t mean, however, that the availability of more debt at even lower interest is accomplishing anything useful for Sweden’s economy. Maybe it is just piling up more debt and more trouble for the future, or maybe no one wants the loans at any cost because we’ve reached maximum household debt.)

Riksbank’s governor indicated the central bank can go much deeper if it needs to — that it is “way, way, way, way too early to tell” if NIRP is hurting banks. He couldn’t seem to say enough “ways” in terms of how far we are from knowing if negative interest will backfire. At the present level, he said the possible damage to bank profitability from negative interest rate policy is not an issue. So, he’s apparently ready to push the hyperdrive a lot harder straight into the black hole to see if he can come out the other side.

The Gov also denied that Riksbank’s actions were a war on currency with the eurozone. Each bank, he indicated, is just doing what it needs to do to help its own economy. Whether Sweden is engaged in an intentional battle of the krona versus the euro or not, it seems pretty clear that the results are the same as a [amazon_link id=”1591845564″ target=”_blank” ]war on money[/amazon_link].

Governor Ingves did say that inflationary differences between the Eurozone and Sweden are the impetus for dropping interest in Sweden. He said that inflation is low in other countries and “that causes an issue for us, and it would be even more of an issue if exchange rates started to appreciate rapidly. For these reasons we felt that it was time to act.”

I hear that and wonder, What’s the difference between that and a currency war? Sounds like a battle to the bottom to me.


[amazon_link id=”1591846706″ target=”_blank” ]Read The Death of Money: The Coming Collapse of the International Monetary System[/amazon_link]



According to one of the largest banks in Europe, Deutsche Bank, Germany’s entry into the black hole of negative interest rates is causing the bank stress at a time when it cannot sustain against that stress. This concern seems to have had the unintended and unexpected side effect of contributing to the crash seen last week in Deutsche Bank’s stock value. It certainly contributed to the bank begging the German government to go cashless if it’s going to go into the alternate negative universe so that DB can hand those negative rates down to its depositors without fear of the depositors taking their money and running.

DB and Credit Suisse joined banks in Italy and Greece in plumbing record lows in stock value last week. So, that’s what we know of the results of negative interest in Europe where such rates have been explored off and on for a couple of years. Yet, talk now is of the need to go deeper … like a meth addict needing more and more.

All of this risk is taken for two reasons: One is that central planners of the economies of this world believe you need to spend your money more quickly to drive the economy and that you will if you know you’ll lose your money by holding on to it. But for the present, there remains another way to get your money out of the bank without spending it. It’s called “cash withdrawal.” Thus, banks have been reluctant so far to pass the cost along and are hurting by absorbing the hit themselves.

Central banks are applying NIRP anyway because of the second reason: they are a little less concerned about getting you to spend your money (though they’d love to accomplish that, too) than they are about getting banks to stop hoarding money and move their reserve deposits.

While I have no sympathy for big banks that hoard wealth, I have to wonder about the likely successfulness of a strategy that puts the squeeze on banks at a time when their stocks are already under pressure due to crashing financial agreements in the oil industry.

Isn’t this the very time when you want banks to have high reserves in order to be able to cover their losses and to maintain their liquidity if a panic ensues among depositors who hear the bank is struggling under multiple bad loans of mammoth size? Is now the right time to push them to get rid of “excess reserves?”

Denmark, Switzerland, Sweden and Japan are all practicing negative interest rates now. Banks in Spain and Germany have dipped along the edge, regardless of where the European Central Bank stood. However, the ECB has veered the entire eurozone inside the edge of negative interest rates to no avail. As with Riksbank, the ECB had to double down on going negative (from -0.10% to -0.20%), still to no great benefit

Negative interest rates, whether imposed by individual banks on savers or central banks on their member banks, have not kept any of those nations from seeing their economies get worse.


Negative rates have started having less beneficial effects on Germany’s savings banks. While lower rates have been successful in pushing down the cost of borrowing, they have been far less successful in reducing the cost of funding to financial institutions. That is, the interest that these banks can charge on loans they are giving to businesses has been falling much faster than the interest rates they are having to pay for money provided by depositors. (Business Insider)


In spite of the failure of negative interest rate policy everywhere it has been tried, Israel is also about to explore the nether regions of interest, according to Citigroup strategists, who also forecast that Czech Republic, Norway and Canada could follow suit.

Apparently there is no end to this madness because Chairwoman Yellen jumped on the bandwagon last week and said that the Fed can hardly avoid considering negative interest rates now that everyone else is doing it. Therefore, the Federal Reserve is also exploring negative interest rates by stress-testing banks to see how they will perform if such rates are applied.

Yellen also noted that the Fed will be carefully checking the legality of imposing negative interest rates on savers, but she doesn’t see anything that would stand in the Fed’s way of syphoning off your money (my way of wording it, not hers). So, it looks like we’re all-in on the negative-interest-rate bandwagon. Get into your suspended-animation cocoon. We’re about to go hyperdrive through the black hole of finance … just because we can, not because it has been seen to work anywhere in this universe.


[amazon_link id=”0143124994″ target=”_blank” ]The Alchemists: Three Central Bankers and a World on Fire (If you want a apologist’s view of central banking just for a balancing alternative, this one is probably the best. But I wouldn’t bank on it.)[/amazon_link]


Something wicked this way comes


All of these banks agree on one thing — that the ultimate barrier to the potency of negative interest rates is the presence of cash as an alternative. Cash is not completely the barrier many thought because savers, as the experiments around the world have revealed, would rather pay some interest to the banks on their deposits than switch to the inconvenience of cash. People, for example, don’t feel safe sending cash in the mail to pay their bills. They don’t feel safe hoarding it under a mattress, but they are inclined to move more and more of their deposits into cash as the bank charges interest on their deposits.

Nevertheless, the push to go cashless is getting so intense that I have to wonder if the negative-interest-rate drive is not just a pretext for going cashless. (In other words, maybe going cashless is the real goal is going cashless and negative interest as our salvation from the Great Recession that we obviously still have not escaped is just a narrative to support going cashless. I only wonder because negative interest has proven to be ineffectual so far. So, why is it being pushed at all?)


And while in recent days we have seen op-eds by both Bloomberg and FT urging the banning of cash, the most disturbing development we have seen yet in the push for a cashless society has come from the following slide in a Morgan Stanley presentation, one in which the bank’s head … pointed out the following… (Zero Hedge)


Note the bank president’s urgent note on the graph:


Mortan Stanley presents danger of negative interest rates unless nations quickly go cashless

Morgan Stanley presents danger of negative interest rates unless nations “quickly” go cashless.


I sat next to someone in policy circles who argued that we should move quickly to a cashless economy so that we could introduce negative rates well below 1% – as they were concerned that Larry Summers’ secular stagnation was indeed playing out and we would be stuck with negative rates for a decade in Europe. They felt below (1.5)% depositors would start to hoard notes. (Zero Hedge)


Over seven trillion dollars worth of bonds now trade with negative nominal interest rates, meaning the person buying the bond knows they will be losing money but prefers the risk of a known small loss to other risks or that the person needs the bond for reasons that make it worth taking that loss, such as to collateralize his margin stock purchases.

Even in a cash-available environment, a vast amount of debt is being purchased at negative interest. The only reason for wanting all nations to become cashless societies is to make sure banks can go even deeper into charging you money for letting them hold your money — to remove the ultimate escape hatch. Their sole solution to saving the economy now is to stick it to you. Or is saving the economy just an excuse to get to sticking it to you?

If this sounds insane, so did quantitative easing less than one decade ago. Governments want much deeper negative interest rates in order to be able to continue to service their massive debts — because negative interest rate policy (NIRP) turns those debts into profit centers, rather than losses. It’s not hard to find ulterior motives for going negative that have nothing to do with the ability of negative rates to save the economy. Maybe they have now become necessary to save governments from their debt.


Over the last few months a stream of articles have crossed my screen, all proclaiming the need of governments and banks to eliminate cash. I’m sure you’ve noticed them too. It is terrorists and other assorted madmen, we are told, who use cash. And so, to protect us from being blown up and dismembered on our very own street corners, governments will have to ban it. It would actually take some effort to imagine a more obvious, naked attempt at fearmongering. Cash – in daily use for centuries if not millennia – is now, suddenly, the agent of spring-loaded, instant death? And we’re supposed to just accept that line? (ContraCorner)


They are counting on your accepting the new course they want to lay in and are broadly building the case now.

We witnessed how much freedom and human rights citizens in the US were willing to give up when fear from 9/11 gripped the nation. “Record all our phone calls and emails for later extraction if needed? Sure.” “Tap our phones without a court warrant or enter our homes for search and seizure without a court warrant, so long as you brand us as terrorists? Absolutely.” “Store every stroke of our keyboards in case someday we become criminals and note every Google search? Of course.” “Create an entire bigger, more complex branch of government when you’re the party of small government by calling it ‘Homeland Security?’ Don’t even hesitate.”

So, the same fears are now being played everywhere against cash. Cash is considered the new shadow banking system — the refuge of thieves and thugs — the foundational support of terrorist organizations. If we get rid of it, we’ll be able to keep an eye on what those guys are doing because they will lose their ability to operate anonymously.

The same weak-willed, modern Americans who now glibly give up free speech in order to make sure speech doesn’t insult anyone will give up cash, too. Cash is, after all, germ-infested and inconvenient compared to bumping your phone on some company’s register. (It won’t be long and the concept of a “cash register” will be as antiquated as a telephone on a wall. “A land line?”)

Though cash has been king in national economies for millennia, cash is being kicked out the back door as a backward and homely relative, not fit for modern company. In spite of all the fear tactics, the real reason for eliminating cash is to allow banks to profit off every transaction you make and every credit you hold too long and to give central banks absolute control over the monetary system, which equates to broad control of the national economy. Aren’t bankers the ones you would want to entrust with that?

Governments, too, will gain total economic control and possibly additional surveillance unless the new cashless system is anonymous, but who will know if any new cashless system truly is anonymous? How many people knew that so much software had designed backdoors for government spying?

Government could even decide to limit your ability to purchase anything but the essentials of life in order to penalize you for whatever they deem wrong. There are many ways in which going cashless gives governments and their henchmen at the central banks total control over economies and over the life of citizens. This, of course, is all the death of capitalism. I’m not sure what to call the economic system that emerges, other than some form of neo-fascism. Or maybe George Bush’s “voodoo economics.” Or just stay with “junk economics.”

Bankers, after all, are the ones who know how things work and who are smart enough to save us … by making sure we take on additional debt or spend our money to save the economy from the bad policies of government that burdened the economy beyond repair. Cyprus a couple of years ago was but a test of what it takes to wrench cash out of the hands of citizens and to test whether they will rebel with pitch forks or acquiesce with nothing more than gloom.

It appears, that without regard to risks unknown, we are all headed beyond the zero bound in a ship called the “cashless economy.”

Fukushima, Chernobyl, Three-Mile Island, fracking quakes, Zika virus.


For further reading on the follies of finance:

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Cashless Society War Intensifies During Global Epocalypse

In the fall of 2015, the world descended into an economic apocalypse that will transform the globe into a single cashless society. This bold prediction is based on trends in nations all over the earth as shown in the article below.

As we enter 2016, we are only beginning to see this Epocalypse form through the fog of war. The war I’m talking about is the world war waged furiously by central banks against the Great Recession as the governments they supposedly serve fiddled while their capital burned.

The governments and banks of this world advanced rapidly toward forming cashless societies throughout 2015. The citizens of some countries are already embracing the move. In other countries, like the US, citizens fear the loss of autonomy that would come from giving governments and their designated central banks absolute monetary control.

The Epocalypse that I’ve been describing in this series will overcome that resistance during 2016 and 2017 as it wrecks economic havoc to such a degree that cash hold-outs will be ready for whatever holds the greatest promise of saving them from their collapsed monetary systems, fallen banks, deflated stocks and suffocating debt. One has only to think about how quickly and readily American citizens forfeited their constitutional civil liberties after 9/11 when George Bush and congress decreed that search warrants were not necessary if the government branded you a “terrorist.”

If this sounds like some wild conspiracy theory, consider the following: no less Sterling standard of global economics than The Economist predicted thirty years ago that by 2018 a global currency would rise like the phoenix out of the ashes of the world’s fiat currencies:


THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century. At the beginning of 1988 this appears an outlandish prediction.


As we near their prescient date of 2018, The Economist’s prediction doesn’t appear even slightly outlandish. If it still seems outlandish to you, read on. You’ll see how the cashless movement gained huge momentum throughout the world in 2015 in the articles referenced below where the voices and actions of numerous economists and governments press for the formation of a global cashless society.

It may have been a long time coming, but it’s certainly not hard for anyone to see now that the world’s currencies are, indeed, crashing all around us as we near the coming of this seemingly messianic money that was predicted to resurrect from the ashes of the world’s fallen currencies.


The beast of the Epocalypse


The central banks are now clearly losing their battle against the Great Recession. Instead of saving the world, they have created a raging beast with many heads that are emerging all over the world — commodity price crashes, junk bond crashes, currency crashes, global stock market crashes, hedge fund crashes, bank crashes and national bankruptcies. All of these developed because of the greatest money creation and lowest interest rates in the history of the world.

That last extravagant phrase — “in the history of the world” — is the kind of expression usually said as an exaggeration; but this time, brazen as it sounds, we all know it is not an exaggeration at all. It’s a brave new world that can look a statement like that in the eye and not flinch because it knows it to be entirely accurate. Central banks have truly engaged in the greatest inflation of money supply ever known on a global scale… and the result is going to be the explosion of these many overinflated monetary systems followed by the need to create something new as their replacement.

The Epocalypse, as I call it, is not merely the second dip into the belly of the Great Recession; it is the death of money.


[amazon_link id=”1591846706″ target=”_blank” ]The Death of Money: The Coming Collapse of the International Monetary System[/amazon_link]


The collapse of national currencies is unfolding as you read this. It can be seen in Greece, Italy, Brazil, China, and Russia, to name the most obvious. China’s crash in the value of the yuan, compared to other currencies, appears intentional, as a way to boost trade by lowering the price of Chinese exports relative to other currencies; but it is not clear that it is intentional because its descent has been repeatedly jarring.

The devaluations of the yuan is likely to ignite a currency war between nations. China is certainly declaring a currency war with the US dollar by unpegging the yuan from the dollar while getting the yuan accepted by the International Monetary Fund as one of the IMF’s few global trade currencies, making it a direct competitor to the dollar for global dominance in the money marketplace.

China intends for its currency to challenge the petrodollar and, so, along with Russia has been (as reported here for a couple of years) divesting from US treasuries to reduce its holdings in dollars so that it is not damaged when the dollar collapses, which it will if it loses its petrodollar status as the world’s main trade currency.

The falling value of most currencies, however, is far from intentional. It is a result of the rising dollar, national economic weakness, slowing trade, and sometimes sanctions. The Russian ruble crashed to record lows this week.


Late last month, we took a look at Russia’s economy and concluded that although the country has proven to be remarkably resilient in the face of collapsing crude prices, the outlook is darkening. The ruble has fallen for three consecutive years and is now under immense pressure both from Western economic sanctions and from crude’s inexorable decline…. The ruble has collapsed to fresh record lows and on Thursday marked its steepest two-day decline in nine months. (“Russian Ruble Crashes To Record Lows In ‘Panic’: ‘Some Investors Are Selling At Any Price’“)


Panic selling of the Russian ruble coincides with major bank collapses unfolding this week in Italy. Michael Snyder of The Economic Collapse Blog writes,


The Italian financial meltdown that we have been waiting for has finally arrived…. Italian banking stocks continued their collapse for a fifth consecutive day on Wednesday, and nervous Italians are beginning to quietly pull large amounts of money out of the banks. In particular, Monte dei Paschi is a complete and utter basket case at this point. A staggering one-third of their loans are “non-performing”, and the stock price has fallen a staggering 57 percent since 2016 began. (“A Run on the Banks Begins in Italy as Italian Banking Stocks Collapse“)


One doesn’t have to look far back into the unfolding global economic collapse to recall people rapidly pulling money out of banks in Greece. Before that it was Cyprus. Brazil is facing similar problems. Soon it may be Puerto Rico as that government moves into bankruptcy.

The stock markets of eleven European nations have fully succumbed to becoming bear markets. China’s is a bear market. Russia’s is a bear market, and the US is within an easy day’s journey of becoming a bear market. It is now bobbing along on the price of crude oil. Probably the only thing holding the US market’s head above water is the flight of capital from everywhere else in the world.

Because the Epocalypse is a global economic collapse that is creating global currency wars and national currency collapses, it will beg for a global economic and monetary solution. That solution is already in the making all over the world. At the same time central banks have been battling the Great Recession, their many member banks and the governments they are supposed to serve have been waging a war on cash. The People’s Banks of China (PBOC) , for example, has been planning to make the yuan a cashless currency since 2014.


China charts course to become a cashless society


As the war on cash escalates, officials from The IMF to China are seeing the opportunity to control the world’s money through virtual (cash-less) currencies. Just as we warned most recently here, state wealth control is the goal and, as Bloomberg reports, The PBOC is targeting an early rollout of China’s own digital currency to “boost control of money” and none other than The IMF’s Christine Lagarde added that “virtual currencies are extremely beneficial.” (“War On Cash Escalates: China Readies Digital Currency“)


The war on cash is happening openly now in societies that have pushed economic stimulus as far as they can. This is why governments are no longer the obstacle that The Economist thought they would be. Proof that we are entering the Epocalypse that will pave the way for acceptance of a global cashless monetary system can be seen in the now-obvious failure of the zero-interest polices of central banks. When hitting the zero bound failed to lift economies that crashed in the Great Recession, some central banks moved to force negative interest rates on people who save their money in banks.

Charging people to keep their money in the bank is hard to do so long as cash is available, as people may just withdraw all of their money from those banks in the form of the national cash and squirrel the cash away. In order to penetrate the twilight zone of economics, central banks need to abolish cash to terminate this escape route. Then they can force savers to spend, thereby increasing the flow of money through the economy, by raising the cost of holding money in a bank account as high as it takes to get people to spend their money. No sense letting perfectly good money waste away in an expensive bank account.

Transitioning into a cashless society is the ultimate central planner’s dream as it gives central banks total control over money, and money is their proprietary product. Continuing from the article above,


Issuance of digital currency can help reduce costs, curb crimes and money laundry, facilitate transactions and boost central bank’s control on money supply and circulation, PBOC says in statement on website after concluding a seminar today. PBOC has asked its research team, which was set up in 2014, to study application scenarios for digital currency and strive for an early rollout…. It can reduce the traditional distribution of digital currency note issue, the high cost of circulation, improve convenience and transparency of economic transactions and reduce money laundering, tax evasion and other criminal acts to enhance the central bank’s money supply and currency in circulation control, better support economic and social development, the full realization of inclusive finance help. Future, digital currency issuance, circulation system also helps build our new financial infrastructure construction, further improve China’s payment system, improve payment and settlement efficiency, promote economic quality and efficiency upgrades.


What government wouldn’t want all of that as it seeks solutions to the death of its current currency? And what international bank wouldn’t want that?


“Virtual currencies and their underlying technologies can provide faster and cheaper financial services, and can become a powerful tool for deepening financial inclusion in the developing world,” IMF Managing Director Christine Lagarde said in a statement Wednesday to accompany the report.

“The challenge will be how to reap all these benefits and at the same time prevent illegal uses, such as money laundering, terror financing, fraud and even circumvention of capital controls.”


The drive to breach the national boundaries of money and establish a global cashless society has become a World War on cash with IMF backing to go digital and global.


Norway jumps into the cashless society war with both feet


As I reported in an earlier article about the escalating war on cash, Scandinavian nations have led the push to become cashless societies. Now Norway’s largest bank is petitioning the government to outlaw cash. Cash, the bank says, is dangerous.


The war on cash is escalating faster than many had imagined. Having documented the growing calls from the elites and propagandist explanations of the “benefits” to their serfs over the last few years, with China, and The IMF entering the “cashless society” call most recentlyInternational Business Times reports that Norway – suffering from its own economic collapse as oil revenues crash – has joined its Scandi peers Denmark and Sweden in a call to “ban cash.” (“Norway’s Biggest Bank Demands Cash Ban“)


Banks that are struggling particularly want to rush legislation that will turn their nation into a cashless society for a couple of reasons: 1) It prevents a run on the bank. I suppose you could make a cashless transaction to buy gold, but you certainly cannot draw your money out of the bank in order to sit on it. 2) If the bank fails due to its bad investments, it can seize your money in a “bail-in.” Normally, if depositors feel their bank is going to seize deposits to cover its losses, people would run to the bank and withdraw their money as cash. It’s harder to get your money out of the bank when all you can do is use it to make transactions. You’d have to use it all up buying stuff in a hurry. (Though there is still gold available online.)


Finans Norge, a financial industry organization in Norway, said the country was on pace to be a cashless society by 2020.



Indian government offers incentives to stimulate faster move to becoming a cashless society


Income tax rebate is one of the incentives being considered by the government to encourage people to move away from cash transactions and curb black money flows, a senior official said on condition of anonymity…. “The key consideration is that people pay nothing to use cash but it imposes a lot of hidden costs on the economy. While using cards or mobile wallets to make payments is convenient, they need to pay a fee and service tax. We want to do away with this disincentive,” the official said….“There is a high cost of cash to the economy that is not explicitly stated, apart from the cost of printing notes and taking soiled notes out of the system: the transport of cash, crimes like the recent ATM van heists, the risk of counterfeiting and the avoidance of tax that the cash economy enables.” (“Centre may grant IT rebate for cashless transactions“)


Ask yourself the following question: Since using cash really creates “a lot of hidden costs on the economy,” and banks do much of the physical cash processing, why do banks need to charge fees on card transactions? With cashless transactions, they avoid the cost of ATM machines and ATM maintenance and restocking costs, the cost of tellers, the cost of transporting checks, coins, and bills. And, if banks are going to charge you a fee for saving them a ton of costs — just because they can — how much more will they charge you fees once you have no option but to use their cards?


Cashless Canada comes within view


One recent headline in the intensifying war against cash is “MasterCard is at war in Canada, and it’s not against who you’d expect.” The battle described is MasterCard’s war on cash in hopes of establishing a cashless society in Canada because she who owns the money owns the country:


In Canada, the biggest rival MasterCard Inc. is working to obliterate, according to its local president Brian Lang, isn’t Visa Inc., American Express Co., Interac Association or Bitcoin dealers. It’s cold, hard cash.


Lang states that Visa and Interac are working toward the same goal of establishing a cashless society … or, as he spins it, a “digitally enabled country.”

His expressed objections to cash, besides the fact that it is bulky and dirty, is that it leaves no trace of its movement. And that is the part where you may want to become concerned because that is the argument that has governments now moving toward becoming cashless societies. They want to know what you’ve done with your money, to have a better pulse of the economy and of the taxes you should be paying, but cash is anonymous. Government doesn’t like anonymous because anonymity can’t be controlled.


Call for cashless society being made in major publications around the globe


Predicted The Economist thirty years ago:


National economic boundaries are slowly dissolving. As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody except foreign-exchange traders and governments. In the phoenix zone, economic adjustment to shifts in relative prices would happen smoothly and automatically…. The absence of all currency risk would spur trade, investment and employment.


As national currencies now collapse, governments will find themselves scrambling for an answer to the Epocalypse — and answer they already want. Many want a currency that ends US hegemony, and President Obama seems more willing to end US hegemony than other presidents have been. All want a currency that smooths international trade. What The Economist thought some might find “outlandish” thirty years ago is now the clarion call of economists around the world and a move that has already begun in many nations:


The fact that people treat cash as the go-to safe asset when banks are teetering is heavy with historical irony…. Even as individuals have taken recent crises as reasons to stock up on banknotes, authorities would do well to consider the arguments for phasing out their use as another “barbarous relic….” Even a little physical currency can cause a lot of distortion to the economic system. (“The Financial Times Demands End Of Cash, Calls It A ‘Barbarous Relic.'”)


You see, major financial publications are now deeming cash as the criminal that causes “economic distortion.” Imagine that! Cash is the cause of economic distortion! No, it’s not central banks with their trillions of dollars of free cashless money that caused all the distortions that are now bringing an economic apocalypse down on our heads; its that much smaller part of the money spectrum that is made up of cold cash and paper bills that is causing all the troubles. It allows you too much economic freedom to operate outside of the banks and the government’s control over the economy.

You see, according to the Financial Times,


The existence of cash — a bearer instrument with a zero interest rate — limits central banks’ ability to stimulate a depressed economy.


I thought central banks loved zero interest rates! Hmm. Apparently not if they are not in direct control over that rate because you can take your cash out of their grubby hands.

The Financial Times also notes government has its reasons for wanting to create a cashless society:


Electronic money also permits innovations to reward law-abiding businesses. Value added tax, for example, could be automatically levied — and reimbursed — in real time on transactions between liable bank accounts. Countries that struggle with tax collection could go a long way in solving their problems by restricting the use of cash. Greece, in particular, could make lemonade out of lemons, using the current capital controls to push the country’s cash culture into new habits.


They want to control your spending habits and the things you do to mitigate your risks. It’s all about controlling and monitoring your behavior as a consumer. You see, those businesses that operate primarily in cash might be criminals. Naturally, criminals do love cash because they must have anonymity. The philosophy is rapidly gaining ground, as a result of that truth, that anyone preferring cash may be someone who needs anonymity for nefarious reasons. Then it progresses from “may be” to “likely is.”

Therefore, the article in this highly regarded financial publication advocates that governments start fining people who use cash, as if all of them are bad guys. The writer says that governments should make cash users “pay for the privilege of anonymity” so they will choose to work more with electronic money and, thus, “remain affected by monetary policy.”

“Affected” is a nicer word than “manipulated” or “controlled.”

Banks really don’t like you having cash at all. Thus, a former Bank of England economist, Jim Leaviss, wrote a similar article in the London Telegraph in May of 2015, describing the move to becoming a cashless society as a panacea:


A proposed new law in Denmark could be the first step towards an economic revolution that sees physical currencies and normal bank accounts abolished and gives governments futuristic new tools to fight the cycle of “boom and bust”.

…Officially, the aim is to ease “administrative and financial burdens”, such as the cost of hiring a security service to send cash to the bank, and is part of a programme of reforms aimed at boosting growth – there is evidence that high cash usage in an economy acts as a drag.

But the move could be a key moment in the advent of “cashless societies”. And once all money exists only in bank accounts – monitored, or even directly controlled by the government – the authorities will be able to encourage us to spend more when the economy slows, or spend less when it is overheating.


Isn’t that nice? The aim is to encourage us to spend in ways that are helpful to all. You can become their little financial automaton. If you’re not taking out enough debt to keep the debt-based https://www.mindanews.com/buy-valtrex/ global economic system percolating, they can “encourage” you to do more, as the Financial Times writer suggested, by levying a fee on your holdings so that it is better to spend than to save. That way, when you get in trouble, you have no savings and have to take out a loan.

You cash hoarder! You are the reason the economy is dying, not the central banks! Their plan would have worked if you had not subverted it with your cashy behavior! The Epocalypse did not happen because it is impossible in the first place to create sustainable wealth out of debt; it happened because you are not participating as you should in the debt scheme! Once the old dinosaur economy dies and the blame is fixed squarely on you, becoming a cashless society will give the government means to “encourage” you to loosen your wallet a bit, spread your phoenix-like wings and spend more. Wasn’t that one of the founding roles of government — to cajole you toward the right economic behavior?

Leaviss’s article in The Telegraph recommends,


Having everyone’s account at a single, central institution allows the authorities to either encourage or discourage people to spend. To boost spending, the bank imposes a negative interest rate on the money in everyone’s account – in effect, a tax on saving.


You see, you don’t know what you’re doing with your money. Government know best. Leaviss goes on to say, as if this is a cheery-good thing,


Faced with seeing their money slowly confiscated, people are more likely to spend it on goods and services.


You see how much nicer that would be for all of us? If you don’t, you’re a cash hoarder, one of the criminal segment that destroys national economies by not participating enthusiastically in the government’s debt spending spree. So, one of the beauties of going cashless in the minds of some economists is that government will deal with you for not participating in the plans of these economists by confiscating some of your money for being so selfish. And that’s a good thing. (So we’re told.)

The most amazing thing to me is that people were openly writing this stuff in 2015 as if it was perfectly acceptable, and apparently it was because I didn’t hear much backlash.

On the other hand, what happens if the majority of people go on reckless spending sprees and start to overheat the economy, as the Chinese did in buying stocks? Well, becoming a cashless society neatly solves that problem, too:


What about the opposite situation – when the economy is overheating? The central bank or government will certainly drop any negative interest on credit balances, but it could go further and impose a tax on transactions.

So whenever you use the money in your account to buy something, you pay a small penalty. That makes people less inclined to spend and more inclined to save, so reducing economic activity.


Beautiful! You see how tidy that is? If you, the consumer, get a little too reckless in your disregard for risk, your favorite central banker can help rein you in by tagging a fee to each transaction to your purchases as a friendly disincentive to overspending. And, perhaps if the government doesn’t like certain vices, it can add a little extra tax of its own to those expenses.

Isn’t that fun? If consumers as an aggregate are getting carried away, the government can help save you from their mass recklessness. This is a special world.

The bottom line, apparently, is that our present tools used by central bankers to manipulate the economy (because we’re a capitalist society, not a centrally-planned economy, right?) are too thuggish:


Such an approach would be a far more effective way to damp an overheated economy than today’s blunt tool of a rise in the central bank’s official interest rate.


That kind of persuasion is caveman stuff. The author goes on to note that, if this all sounds rather fanciful (as in Orwellian?), Denmark is already doing it.


Get on the cashless society band wagon; set your money on fire


Your fellow citizens are headed that route anyway. Going back to the article about Canada, we read,


In the latest methods-of-payments survey, the Bank of Canada noted a 10-percentage-point decrease in the number of transactions paid by cash to 44 per cent in 2013 compared to 2009


You see, you’re already moving that direction on your own anyway. You can be sure that in the two years since that study, the number has become even less than 44% of Canadian transactions being by cash. It is not just governments that are on the cashless bandwagon because it gives them total control; it is citizens, too, (because we all find it handy so long as we’re not forced to go cashless). So, this trend toward total government and bankster control is a conveyor you are most likely already on … by choice.

As I reported in an earlier article, “Cashless Society Has Arrived, and It’s Global,” most Scandinavian countries have already gone this way or have made major strides in that direction. Those Scandinavians love a good socialist answer to everything. So, what you might have thought sounded like conspiracy at the beginning of this article is actually the norm in Scandinavian societies.

Get with the times! In case you thought (mistakenly) that going cashless might be hard on the poor who cannot afford smart phones and computers for making transactions in their petty businesses, au contraire. You have it all wrong. So, let this former central bank economist (we know how smart economists are) inform you:


Electronic money is an inclusive and convenient system, giving poor and rural sectors of an economy – where cash machines and bank branches may be few and far between and not all people have accounts – a tool for easy participation in the economy.


You see, cash is cumbersome to the poor. What if they cannot get to a cash machine to get some? (How have they ever managed to get it in the past without cash machines?) Going cashless alleviates their challenging need to find cash machines in rural areas. Of course they’ll need a smart phone or some kind of card scanner with a cell connection if they’re going to going to sell carrots from their roadside stand, but I’m sure the government can provide them with one if needed, as that is a basic right of every citizen “to be connected.” (Don’t know what they’ll do, though, if they’re stranded and suddenly need money to buy fuel off some farmer and they’re out of cell range.)

Those concerns miss the point, so please excuse me for interrupting with them. The important thing here is to recognize that this is an “inclusive” plan to help the poor who right now may be excluded from participating in the economy because of cash. (I knew the poor had a hard time getting cash, but I didn’t know it was because of the lack of cash machines in rural areas. Now I know. I always thought they just didn’t have any money, but it turns out it was just lack of cash machines.)

Your government is here to save you. Cash is an escape valve that puts you outside of their assistance. According to Leaviss, if you’re standing outside the electronic cash economy, you’re part of the “black economy.” You know, that hole in the eur-ozone that is full of death rays from outer space. You are one of the characters wearing the black hats. Why else would you choose to be so elusive and choose to avoid participating in the government’s control over the economy that is intended for the good of all society?

Do you see how the argument is shifting toward cash being evil and those who use it being part of the problem, instead of part of the solution? Get on the debt-credit wagon and join the race — the human race. Evolve, for crying out loud! You’re holding the economy back, you red-eyed fiend!


Bankers go bonkers over Bitcoin’s cashless solution


Yes, bankers once hated Bitcoin because they saw it as another thing that took people away from the currency they create and control. Central banks are owned by bankers, not by governments. The Federal Reserve merely has government appointees on its board and committees; but many of its board and committee positions are held by the bankers that own the central bank.

Even though Bitcoin is suddenly facing bankruptcy, its technology has something these top-level bankers want in order to create a centrally controlled cashless currency; but they cannot have Bitcoin out there doing it, or they will lose their monopoly on money. Bitcoin is to bankers what Uber is to taxi companies.

Another Federal Reserve conspiracy theory?

Read on:


Several years ago, the financial industry was abhorrently opposed to the introduction of bitcoin, a virtual currency that would revolutionize the way we conduct our banking business. Fearful of a massive professional upheaval, the financial cognoscenti steeled themselves in undermining this virtual currency.

Fast forward a few years, and ironically, Wall Street is now the largest proponent and investor in this space and the momentum continues to grow. (Newsmax)


Bankers now see how the technology that makes Bitcoin work is something they can use. They get it now … and you’re about to … especially once Bitcoin is out of the way as an alternative.


Goldman Sachs, Santander and BBVA have invested in start-ups that focus on harnessing this technology. Citigroup and JP Morgan have been conducting internal groups to assess how best to enter this area. And Barclays would like to implement this technology to offer consumer products that are less expensive than credit cards and direct money transfers.


My old friend (without the “r”) Bank of America is also chasing the technology now. And NASDAQ is pursuing it for processing equity transfers. No surprise that the US Federal Reserve and the Bank of England are in on the exploration, too. Suddenly everyone wanted Bitcoin, and just as suddenly it is going bankrupt.

Become a cashless society; set your money on fire.With all of that (and additional articles for further reading below), how much do you want to bet that the answer arising out of the developing economic apocalypse will be a digital solution? It will also be a global solution to a global problem. After all, don’t global catastrophes need global answers? If the Epocalypse creates enough fear and suffering due to economic collapse, people will sell out their freedom for security.

So, stop being part of the problem! In the sixties people burned their bras. It’s time now to burn your bucks. Join the revolution! Break the buck! That day is nearly here. It will just take a solid economic collapse to soften you up into ready acceptance of the final solution.

The prediction of a final, global, economic system goes back a very long way:


He also forced everyone, small and great, rich and poor, free and slave, to receive a mark on his right hand or on his forehead, so that no one could buy or sell unless he had the mark or the name of the beast, or the number of his name. (The Apocalypse of Jesus Christ 13:16 & 17 — commonly translated “The Book of Revelation” because “apocalypse” actually means “the uncovering” or “revelation,” though it is often thought of in terms of the global holocaust described in that ancient text.)


The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy. The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF…. As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice. They can go with the flow, or they can build barricades. Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones…. The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power…. Pencil in the phoenix for around 2018, and welcome it when it comes. (The Economist, January 9, 1988)


2016 Updates: Media coverage and/or advocacy for the global cashless society


December 14, 2016: Australia makes further moves in direction of cashless society:

Revenue and Financial Services Minister Kelly O’Dwyer flagged a review of the $100 note and cash payments over certain limits as the government looks to recoup billions in unpaid tax…. The black economy accounts for 1.5 per cent of GDP, given many cash payments are untaxed. Ms O’Dwyer told the ABC … “The whole point of this crackdown on the black economy is to make sure we close down any potential loopholes….” Despite the broad use of electronic forms of payment, Ms O’Dwyer warned there are three times as many $100 notes in circulation than $5 notes…. The minister would not rule out the removal of the $100 note, saying it was up to the expert panel to provide recommendations. “There’s nothing wrong with cash per se, the issue is when people don’t declare it and when they don’t pay tax on it.”


December 1, 2016: India moves toward becoming cashless society

On November 8, also the day of the U.S. election, Narendra Modi, Prime Minister of India, made a surprise announcement that had been kept secret, even from many in the Indian government, that 500 and 1000 rupee notes would no longer be legal tender within 24 hours…. The removal of the 500 and 1000 rupee notes in effect demonetized 86% of India’s. existing cash. Half of India’s citizens do not have a bank account [so] 97% of the Indian economy is cash-based…. Indians are now converting whatever they can into gold, silver, and hard currencies like the US dollar…. Gold in India has shot up to as much as $2,800 per ounce – if you can find it. (“India’s War on Cash and Gold“)


November 29, 2016: India moves toward becoming cashless society

When India’s ban, made illegal, the 500 and 1000 rupee banknote this move effected every 1 out of 7 people on planet earth. That means that every 7th person, anywhere and everywhere, you come in contact with may have been effected by this cash ban…. Thailand [will] be implementing a new policy in the early part of 2017 to completely eliminate coins from circulation. South Korea has already taken measures to eliminate coins from circulation. (“Cashless World: 1 out of 3 People Never Use Cash“)


November 23, 1916: India moves toward becoming cashless society to stop tax evaders

Over two weeks after India’s abrupt demonetization of high denomination banknotes on November 8, the cash-driven economy still remains largely in a state of standstill, particularly the rural parts of the nation, where the government’s attempts to restock banks with “new” cash (even with the use of army helicopters) have failed to re-normalize commerce. As a result, the local population of business owners, unable to spend or deposit their “sackfuls of large bank notes amid India’s crackdown on hoarding cash”, is taking matters into its own hands, and as the WSJ explains, has started paying employees months of salary in advance, ringing up bogus sales and even buying gold they can smuggle overseas to get rid of stashed money or conceal its source. (“The ‘Black Money’ Backlash: These Are The Illegal Workarounds To India’s ‘Cashless’ Chaos“)


November 15, 2016: Cashless society movement goes nuclear in Australia

Citibank has just become the first bank in Australia to declare that it no longer will accept notes or coins. Only digital transactions. This follows on the heels of India banning large cash denominations…. “We have seen a steady decline in the demand for cash services in our branches — in fact less than 4% of Citi customers have used this service in the last 12 months.” (“Citibank is the first Australian bank to stop taking cash“)


October 14, 2016: US launches diplomatic program, “Catalyst” to help India become a digital cashless society

Ambassador Jonathan Addleton, USAID Mission Director to India, lauded India’s efforts to expand financial inclusion and build an inclusive digital economy. “India is at the forefront of global efforts to digitize economies and create new economic opportunities that extend to hard-to-reach populations. Catalyst will support these efforts by focusing on the challenge of making everyday purchases cashless,” Addleton said. (“USAID Launches Catalyst To Drive Cashless Payments In India“)


January 31, 2016: Bloomberg editorial board strongly advocates nations move now to become cashless societies

Cash had a pretty good run for 4,000 years or so. These days, though, notes and coins increasingly seem declasse: They’re dirty and dangerous, unwieldy and expensive, antiquated and so very analog.

Sensing this dissatisfaction, entrepreneurs have introduced hundreds of digital currencies in the past few years, of which bitcoin is only the most famous. Now governments want in: The People’s Bank of China says it intends to issue a digital currency of its own. Central banks in Ecuador, the Philippines, the U.K. and Canada are mulling similar ideas. At least one company has sprung up to help them along. (“Bring On the Cashless Future“)


Other articles from 2015 about the global cashless society movement


OCTOBER 22, 2015: Britain tries cashless society experiment

Shoppers will find their cash is worthless in one Manchester suburb as only cards will be accepted by stores on the high street.

As part of a social experiment, shops along fashionable Beech Road in Chorlton will only take payments on plastic.

…Mary Paul, of the Beech Road traders’ association, said: “Businesses can see the way things are going with more money being taken on cards across the board, so this is a very interesting glimpse into the future for all of us.”

…Some experts predict physical currency will cease to exist within 20 years.

…Recent research showed most Londoners would welcome a cash-free society as they’re so used to paying for everything with cards. (“Cashless High Street Ditches Notes And Coins“)


OCTOBER 31, 2015: Sweden pushes populace into cashless society

The Swedish government abetted by its fractional-reserve banking system is moving relentlessly toward a completely cashless economy.

Swedish banks have begun removing ATMs even in remote rural areas, and according to Credit Suisse the rule of thumb in Scandinavia is “If you have to pay in cash, something is wrong.”

…What is driving this movement to destroy cash is the desire to unleash the Swedish central bank to drive the interest rate down even further into negative territory.  Currently, it stands at -0.35 percent, but the banks have not passed this along to their depositors, because depositors would simply withdraw their cash rather than leave it in banks and watch its amount shrink inexorably toward zero.

However, if cash were abolished and bank deposits were the only form of money, well then there would be no limit on negative interest rate policy. (“Sweden—Vanguard Of The Keynesian War On Cash“)


NOVEMBER 8, 2015: India and parts of Africa each intensify moves to become a cashless society

In many African countries, going cashless is not merely a matter of basic convenience … it is a matter of basic survival. Less than 30% of the population have bank accounts… But almost everyone has a mobile phone. Now, thanks to the massive surge in uptake of mobile communications as well as the huge numbers of unbanked citizens, Africa has become the perfect place for the world’s biggest social experiment with cashless living…. In Kenya the funds transferred by the biggest mobile money operator … account for more than 25% of the country’s GDP…. In India an even more ambitious project is under way: the Unique Identification Authority of India…. It will be the largest identity platform and biometric database in the world. There’s only one snag: according to its creators, the only way to make the system work effectively will be through the widespread adoption of electronic payment systems, side by side, as always, with biometric recognition systems. (“The War On Cash Is Advancing On All Fronts: ‘First They Came For The Pennies……’”)


NOVEMBER 23, 2015: Terrorism finally cited as good reason to switch to being a cashless society

Terrorists fund most of their activities in US dollars — anonymous cash dollars. If the US switched to becoming a cashless society, all dollars would have to be converted into electronic funds in order to avoid obsolescence. Then the activity of terrorists could be more easily tracked and frozen by government. So, the theory goes; but terrorists would find other avenues, such as gold. (“Leave Bitcoin Alone. Abolish Cash Instead.“)


DECEMBER 1, 2015: Switzerland’s negative interest rates prompt economists to encourage move to cashless society

The momentum keeps moving in economic debate toward creating cashless societies all around the globe so that central banks have more control over the economy. In this case it is because negative interest rates cannot fully create their objective of stimulating spending by taxing savings when people can just move their money out of banks in the form of cash. The debate also continues to focus on how easily taxes are avoided by cans deals. (“Do Negative Interest Rates Really Work? Look at Switzerland …“)




Epocalypse: What Trends Shape the World after Global Economic Collapse?

To divine the direction the world will take after global economic collapse, you have to understand the prevailing winds and the underlying tides. Look for the megatrends that are influences against which all other forces have minor affect.

In predicting that global economic collapse would happen this fall, I pointed out the headwinds that would continue to grow in force against the economies of this world. I called attention to the holes of debt that would continue to open up beneath global economies. Most of all, I noted that the withdrawal of central-bank economic stimulus would burst the recovery illusion because the mirage was not sustainable without that stimulus.  Even if the stimulus continued, its effectiveness was almost depleted. Those were the megatrends I saw aligning to bring global economic collapse.

In another article, I wrote about what should have happened for recovery to be real (but didn’t) I’ve also written about the new solution that is now necessary —  a global economic reboot. A Year of Jubilee, as it is called in the Jewish tradition, needs to happen; but it won’t because it is anathema to the global banking powers that enslave others.

Now, I want to turn your attention to why it is that am I certain the right course to recovery will not be taken. In short, it is not the direction that the prevailing winds and tides of this world are moving, and it is those mega forces or megatrends that will determine the future. Not what ought to be. Not what will work. The right path has very little chance of being accepted in the face of such overwhelming forces, which have broad public support. Let me explain why.


What megatrends drove the world after the last global economic collapse?


There is no better predictor of the future than the past.

We knew we had a problem that was a mortgage crisis — a huge overhang of debt that could not be supported and that collapsed. What solution did the world take? Was it to shrink debt? No. All the nations of the world pursued the path the US pursued, which was to do everything possible to make credit more available again and to entice people to take out more debt in order consume more. We pushed back up housing prices as much as we could, pushed up stock prices. Bigger, bigger, bigger.

We are big on buying. We are bigger on big buying. We are big on debt to make that possible and bigger still on big debt. There is no limit to how much debt we are willing to take on. We are big on bigness, and debt gets us to that image of bigness faster. So, we took the bad debts of individuals and businesses and piled them up into mountainous debts of nations so that individuals and businesses could take out more. Since the Great Recession began, indebtedness has become vastly bigger than it was when it was already too big to avoid collapse.

We knew that a second part of our problem was banks that were too big to fail. We had let banks become so big that a failure of even one of them would be catastrophic. Did we solve the problem by breaking big banks down into smaller components? No. We solved the problem by making them bigger. The Federal Reserve actually forced struggling banks to merge as the main framework of their answer to the problem of banks that were too big to fail. The masses did not complain about this solution but passively let it happen.

Nor did we solve the problem by letting big banks fail and then creating new money in small, healthy banks for the depositors. Instead, we created vast amounts of new money in the accounts of the big banks that already ruled the world. Bigger holes of debt and vastly greater sums of money flowing into them.

We didn’t stop mortgage-backed securities or derivative investments with junk loans buried inside. We created more of them.

When we give tax breaks to stimulate the economy, do we give them to the consumers that we hope to entice into doing big buying? No. We give them to the “job creators” in the form of capital gains breaks and other investment breaks that help primarily the top 10%. The masses readily go along with this in the belief that the rich are the successful ones who have the knowledge to save us. The money will trickle down, the masses keep saying; but it hasn’t and won’t.

We all know that the middle class has shrunk, so we have no excuse not to know the money did not trickle down. We can all see that the rich got richer (bigger) while the middle class stagnated, but did that stop people from voting for and arguing in favor of trickle-down economics? No. The belief that the big are big because they are smartly successful and, therefore, better equipped to save us prevails. We believe in big and admire big. It is the prevailing wind to go even bigger in search of answers.

When we looked for answers to the crisis, did we look for the obscure names that had not been listened to? No, we looked exclusively to the big names who created the crisis or who, like Ben Bernanke, failed completely to see it coming. Even though they created the greed and corruption or failed to regulate it or to see it as a problem, we looked exclusively toward them. They were famous (had big reputations), so they must surely be the people who could save us. In fact, congress, rather than working out the solutions, gave the entire job over to those same big people who run the world’s biggest bank — the Federal Reserve.

Did we audit the Federal Reserve or restructure it since it was the architect of the last global economic collapse? No. We empowered it even more. We made the big head of the nation’s biggest bank the Rescue Czar. We gave him unconditional power to bail out banks secretly, to choose what banks get bailed and which ones fold and to create as much money as he could possibly want to create at will. We gave him almost absolute economic power. In the process, the almighty congress abdicated its responsibility and forfeited its own power by not taking control.

Did we put big people in jail? No. They’re too big to jail. They have big friends in government.


How far back does the addiction to bigness go?


To understand how pervasive our desire is for big answers and how ready we are to cede power to bigger government, let’s look all the way back to George Bush II. He, too, ceded power to the colossal, and no one raised an eyebrow. He claimed he was big on capitalism, but said that he had to give up his capitalist principles when the global economy collapsed by bailing out the biggest failed capitalists. Capitalism, when it is truly practiced, is as decentralized and democratic as an economy gets. It allows the amorphous non-entity called “the market” to decide who wins, who fails, etc. The market is nothing more than economic democracy in a Capitalist society. When the mighty fall, they fall hard; but George Bush intervened with the power of big government to save the mighty who were falling.

Look back further. Everyone has believed that Republicans are the party that is against big government. That isn’t true. Both parties ARE government. Both parties want to be as absolutely big and powerful as they can be. The only difference is which part of government they want to grow — the welfare state or the warfare state. The Democrats favor the former as an area of government growth; Republicans, the latter.

Thus, for George Bush, the answer when intelligence agencies failed to communicate important facts with each other at the time of 9/11 was not to reduce government bureaucracy but to increase it — to increase it exponentially. Rather than tell the heads of intelligence agencies, “I am demanding you resolve this communication failure between yourselves. You work out the answer. In six month’s I’m going to test the system by inputing some information, and I’m going to see if that critical information makes it to me from all agencies. If it doesn’t, I’m going to find out where the communication stopped and fire the person in charge of that department. And then we’ll do this again.” No, that would be firing his cronies — the big people. His answer was to create an entirely new and bigger department of government called Homeland Security and place it in charge of the other government entities — more government as an answer to solving the problem of already bloated government.

Did the masses of small-government Republicans complain? Not much because big government in the direction of the warfare state is the way they roll. More intelligence fits the warfare model. So, even the Republican Party is not about shrinking government; it’s about shrinking the  welfare state while building up the warfare state. You see, both parties want more power (bigness). One wants power through muscle. The other through cultivated dependancy. Both are paths to greater power over the passive masses.

Still think Republicans are against big government? Look again. The other response to 9/11 was much greater big-brother intrusion on privacy and our constitutional rights. The power of the government to ignore the constitution by spying without warrants was rapidly expanded during Bush’s term through the creation of a huge spy complex that could and did record all phone calls and all emails all over the world. It was by far the biggest spying operation ever. This was not something that was just learned about during the Obama era as a result of Edward Snowden. Heck, I remember reading all about the creation of this spy system back in the Bush days — about the huge black building being created to house floors of computers for storing all internet and cellular data so it could be retrieved if needed.

Even if you never saw those articles, you know something that huge could not possibly have been built and fully implemented between the time Obama took power and Snowden made his revelations. It puzzled me that people were even surprised by Snowden’s revelations. I had read all about these things years before — shortly after 9/11. Apparently, very few people cared to notice back then since many were surprised by Snowden later, but I suppose that was because they didn’t care that government was getting bigger. Big government monitoring of all internet and cellular data made them feel more secure, not less secure.

The reason things will keep moving in the direction of these megatrends is that today’s citizen craves security more than freedom. The days in which citizens will en mass give up their lives to keep or acquire liberty are gone. Republicans seek security in the superpower warfare state. Democrats seek security in the overwhelming welfare state. One is the security of offensive and defensive force. The other is the security of back up and safety nets. For the sake of security, citizens have shown they will complacently yield almost any freedom.

So, the big spy state was made bigger under Bush in answer to the insecurity we felt from 9/11; but Demcocrats love that kind of power, too, though it is not their modus operandi. Thus, Obama has done all he can to keep from dismantling this huge spy complex once it was revealed and to go after the little guy — Edward Snowden, who revealed nothing more than what the press had described several years earlier when it was under construction.

Bigger new government agencies to direct other already huge government agencies. Bigger spy complexes. Fewer freedoms for the individual with constitutional protections of the individual placed second to security increase the power of the collective over the individual. Bigger government deficits. Bigger government debts. Bigger homes. Flow of much greater wealth toward the already rich and powerful. More power and influence to bankers and those already viewed as big successes. Ever-increasing globalization. These are the megatrends you can clearly see as the prevailing winds and tides of human civilization. You may hate them when they’re spelled out, but you’d be hard-pressed to deny that they describe the drift of society over the past few decades.

Look further back, and you see George Bush I talking about a New World Order, by which he meant globalization with greater US hegemony influencing that globalization. Corporations extended their global reach by building more factories in other nations for cheaper labor. The little man and woman in the US got smaller as they had to compete against even littler men and women outside the US, but the big CEOs and shareholders got bigger. CEO salaries mushroomed as the salary of the little person stagnated. All wealth bubbled up, rather than trickled down. Yet, the trickle-down little people remain adamant that this is still the right solution. Reality be damned.


What megatrends will drive the world after global economic collapse?


As for the societal conditions that will come into being when the global economy does collapse, I’ll point out the following factors that will drive us toward more centralization and more globalization:

Civil unrest has grown a great deal in the US over racial issues and immigration issues. Harder times with broad new failures in the job market will only make that unrest worse, and that leans toward stronger government controls becoming necessary to sustain some semblance of peace. Anarchy is on the rise in our big cities as a form of rebellion against big government, and the ability of terrorists to exploit that anarchy is increasing.

Thus, the intrusion of big government will expand more into individual lives and out onto the street to combat anarchy because weak and conditioned people value security more than personal freedom. Police are already using bigger military armaments and tactics to contain unrest (armored vehicles, etc.). The police look more like an army than they used to. As much as people don’t like that, the growing need for stronger security will cause us to tolerate a government that looks more like a police state.

The recent Operation Jade Helm appears to be readying the military for working covertly among civilian populations in order to control tense situations. It appears to me that the government thinks stronger police departments don’t go far enough. The military appears to be training for the possibility of actual military support. Whether that is intended for possible use at home or not, I don’t know; but these are developing skills that could be employed at home if necessary, and a growing need for security likely means they will be. The ability of the president to seize full control during times of great political unrest was expanded under law.

Maybe the military suspects that terrorists will exploit situations of anarchy at home to bring their battle here. In which case, the military will need to be able to sort through who are the foreign terrorists and who are the citizens. (Especially with immigration running rampant over a border that everyone acknowledges is porous.) Government may be readying for the possibility that the war on terror will move onto our own homeland as terrorists clearly would like it to.

Whether due to internal uprising, looting during a global economic collapse, or the increased likelihood of foreign terror on domestic soil, a world that is increasingly hostile and less secure will cause people who value security over liberty to readily yield more power to bigger government to protect them from these wild forces.

When the financial props of the Great Recession are finally all removed (zero-interest policies of the Fed and quantitative easing) or simply exhaust their effectiveness, we’ll find out how great the Great Recession really is. As economic stimulus fails or is removed, everyone will see that the economy is dead, that sustainable recovery never happened. The economy will come unhinged. Desperation and fear will quickly follow. Desperate economic times create desperate people, willing to embrace answers they would never have accepted in better times.


Global economic collapse will demand a global answer


There is nothing bigger in the realm of human affairs than globalism. Any bigger than that goes beyond human affairs and becomes less relevant to civilization by becoming further removed from the world we live in. So, globalization is the biggest big for human society … at least for the time being.

Because this economic catastrophe is clearly already global, leaders will offer a global answer to the problem. People already want electronic money more than cash (which allows individual anonymity and, therefore, liberty) because they do much of their buying online. They will trade liberty for convenience and comfort. A global cashless answer will make sense because it will fill a recognized current need — going in a direction in which the world is already trending.

Because online buying constantly jumps borders without people even knowing they’re dealing with a company outside of their nation, the need or desire is growing for a global currency. Global currency requires a unified global economy (as we’ve seen with the Eurozone). A global economy that is unified around a single electronic currency will be seen as being stronger than the multi-faceted global economy that is now breaking apart.

All of that is why I believe we’re headed toward global economic answers. This will mean trading away local sovereignty over our economies, as we just witnessed Greece do when it caved entirely to European demands after only a few days of suffering, rather than striking out boldly for its own freedom. For all its big talk, Greece made itself an even weaker slave to its creditors in order to remain part of a global solution and for the sake of economic security. I don’t believe the majority of the citizens of the US are any braver or that they will stand any taller on principle if facing the same hardship. They will see globalism as the most natural progression and national sovereignty as regressive.


President Obama working toward a global answer for his career


Now, I move for a moment into a realm of speculation that cannot be proven by megatrends because it assumes personal motivation that I cannot actually know, but only infer from external facts. If you don’t go with me on Obama, don’t let it hinder your acceptance of what I’ve said above as I admit I am now jumping to a higher level of inference.

I think that Barrack Obama is moving toward a global answer for his own career. As he approaches the waning year of his presidency with no prospect to run again, his only possible move for greater power — if he wants it — is to become head of the United Nations. He’s still a young man as presidents go with a lot of life before him and probably a great desire to remain influential and to carry out what he sees as being his legacy for the good of the globe.

Currently, of course, the Secretary-General of the UN has less power than the president of the US, but I think that is why we see President Obama diminishing the sovereignty of the US and expanding the power of the UN. It is philosophical with him that the world is more important than the nation, but it also the only possible progression from being president of the US.

You can see movement in that direction in his latest global trade pact, over which congress yielded him czar-like powers to negotiate. You can see it in the final agreement with Iran that will be shepherded by the UN, not by the US. More recently, Obama joined with the pope in advocating global answers to humanity’s global crises before the UN — particularly the economy and the climate — in a pact that will diminish each nation’s sovereignty over its own affairs as those particular affairs are placed under the governance of international agencies of the UN.

During all this time, Obama has also decreased US hegemony in the Middle East more than any president in my lifetime. US allies in the region feel abandoned by him, and the entire mid-east is erupting into chaos as the heavy US hand, which functioned like a pax Romana, is lifted.

I’m not saying the US should try to remain the world’s cop or be self-serving in all its diplomacy, but trading away US influence toward the UN and other global bodies while he is president and has power to do so is essential to creating a position that has more power and influence than the presidency, which Obama can hope to step into someday for an even greater legacy. I’m talking about what it accomplishes for Obama, not about whether it should or shouldn’t happen. I cannot know that is his aim, but he certainly seems to be ceding US sovereignty to the UN, and he clearly believes in global solutions.

I think Obama has always shown himself to be more a man of the world than of the US — both in background and in forward direction. By that I mean he has always seemed more interested in what is good for the world than in what is best for the US. Liberals in the US will see that as a good thing, and most people in other parts of the world will see it as a good thing. It could be a good thing for humanity if it did not involve centralizing control of the world with the UN and aggregating more power toward the person at that center. Moves by Obama toward empowering the UN appear noble and humble and good for humanity, and I’m sure Obama believes it will be all of that.

The world applauded Barrack Obama before he did anything. He was cheered around the globe when he replaced George Bush. He received the Nobel Peace Prize without having ever helped even in the smallest way to establish peace anywhere in the world … simply for getting elected. Getting such a high reward for doing nothing at all proves he has a surreal magnetism that causes people all over the world to project onto him the power, influence and qualities they want to believe in for the modern global man. Obama believes that bigger government — more global government — really does hold the answers for humanity.

Barrack Obama’s own development fits perfectly to the path the world is taking; therefore, he has the capacity to be seen as a world savior, even if the US economy collapses under his watch. In fact, diminishment of US power is something for which much of the world will love Obama, making him a likely choice to become Secretary-General of the United Nations when the position opens.

Globalization is the ultimate bigness, and it means that a global center of power will have more control over what individuals can do in this world. It means more homogeneity and blending of cultures, but that will also intensify conflicts by pushing individuals together who don’t readily harmonize. That will awaken counter forces that will inevitably square off against that centralization of power. There are always opposite reactions, even if they are not equal in strength. You can already see that kind of conflict growing under Obama’s immigration policies, which serve the US laborer less and the global citizen more.

This globalization will not happen without rebellion, and that rebellion will require stronger suppression of individuals and those who go against the global flow, which will be justified as being necessary to bring about the reforms the world needs. Most citizens will go along with that because the coming global epocalypse  will open up such a huge pit that fear and loss will ready people to give up personal liberties for the sake of restored security.


See also “How the Coming Global Economic Collapse will Play Out.”

Cashless Society Has Arrived, and It’s Global

Half a century ago I remember my mother, as she rolled dough on the kitchen table, listening to radio preachers who predicted that the entire would become a cashless society based on a biblical prophecy in the Book of Revelation. Those preachers are now dead, as is my mother, but their predictions are coming to life. Make what you want of their source of knowledge, but what many thought was akin to conspiracy theory back then is now daily commerce.


Which societies are cashless already?


The list of nations that are completely cashless or nearly cashless is increasing rapidly. At the top of the list is Iceland, which boasts that 99% of all transactions now happen without checks, currency or coin. The same is generally true of all Nordic countries, which are leading the way to cashless existence.


“We are headed more and more for a cashless society,” said Jan Digranes, a director at Finance Norway, which represents banks and other financial institutions. (Reuters)


Norway, Sweden, Denmark, Finland and Iceland are all nearly 100% cashless. Swedes even buy things as small as bubble gum with a credit card, and Swedish banks have worked cooperatively to develop a phone app called “Swish” (while Norway has “Zwipe”) that will swish your money away to anyone who doesn’t have a merchant account to process credit cards. Stockholm’s subways will not accept cash. Even street people sell magazines using electronic payments. So, the cashless society is top-to-bottom in Sweden.

All of these countries still print cash and mint coin, but the amount in use is rapidly dwindling. Currently only five percent of Norway’s transactions involve cash, and one financial institution in Norway estimates cash will be gone completely in just five years. The U.K. and Sweden report cash usage is lower than 5%.

Denmark is trying to accelerate its change to a cashless society by passing a new law that states merchants no longer have to accept cash as legal tender.


The Danish government has said that as of next year, business such as clothing retailers, restaurants and petrol stations should no longer be legally bound to accept cash payments.

The proposal is part of a package of economic growth measures, which … aims to reduce costs and increase productivity for Danish businesses. (The Independent)


India is also seeking to become a cashless society. Numerous services in India enable small and medium-sized business to go cashless. There is mPOS (Mobile Point of Sale), RuPay and IMPS (Immediate Payment Service)  from NPCI (National Payments Corporation of India). India is still a country where people keep cash in mattresses and love the feel of a bulge in their pocket, but this is changing as the largest youth population in the world shifts to mobile phones and works in the computer/internet industry.


Why are we becoming a globally cashless society?


First and foremost, banks state that the cost of processing coins, currency and checks is almost twice as expensive as processing electronic payments. Makes sense, but, then, why do banks charge merchants a 2-3% transaction fee for debit and credit-card transaction? Why do they need to charge a fee when merchants save them money?

I suppose they do it because they can. So, electronic transaction not only cost them less to process, but they get you (or your merchant) to pay for the privilege. They can’t get you to pay for using cash. Bank of America tried. They started charging their own customers a fee for using their debit cards or their own ATMs. That bit of rapacious greed got trounced by angry customers in a hurry, however, so I guess there is still some limit to how willing the sheep are to be fleeced. Customers started leaving BofA in droves until they relented, and they haven’t said a word about that since.

In countries that have become mostly cashless, banks boast that robberies are down ninety percent because there is almost no money in the bank that can be stolen. On the other hand, electronic fraud in some of those countries has doubled in the past decade.

National governments in economic stress are also pushing to become cashless. Denmark, in the example above, is legislating cashless incentives because electronic transactions lubricate the economy. They increase the velocity of money and the cost of moving it. Greater efficiency is clearly craved by all nations now that we are in a longterm financial crunch. In short, going cashless is seen as part of an economic recovery plan for a world still gripped by the calamity of the Great Recession.


What are some of the drawbacks of becoming a cashless society?



  • I think the biggest one many people fear is loss of privacy. Every transaction you make will have a record that marks out your steps through this world and all your interests and needs, and you can do nothing about it.
  • Then there is control. Cash is freedom. If you have no cash, the government can shut you down completely … maybe for tax evasion, maybe because your a criminal or a terrorist, or maybe just because they think you are and due process doesn’t exist any more if they can label you a terrorist.
  • Trapped in fees. Once cash is not an alternative to your bank card, you can expect that ATM/Debit card to start costing you fees every time you use it. Sure, BofA’s customers rebelled, but they had the alternative of using cash. Once cash is out of the way, banks can collude on charging fees. (If they all do it, you’ll have no alternative, no matter how high the fee. Of course, collusion is illegal, but what does that matter to a bank?)
  • Crime just moves up the food chain to smarter people. You cannot successfully “stick up a bank” if there is no cash in it, but you can hack your way into a vastly larger vault. With so many people tapping cell phones to make a transaction, there will be a lot of incentive to find ways to pick up and read those signals.
  • No one will know what the smell of money is anymore, and you will never again know that great feeling of giving someone a crisp Franklin as a gift or peeling Jacksons off a bankroll.



Updated: banks getting highly enthusiastic about new technology for a cashless society

Since writing this article the following article has come up about banks racing toward Bitcoin’s kind of technology. They once battled it as the nemesis to their own currency. Now, they’ve given up the war as a losing battle and are looking at how they can conscript it to their own purposes:


Bankers Getting On-Board With Bitcoin Blockchain


I encourage you to use the comments below to add your own drawbacks to going completely cashless.


Part Two:  Cashless Society War Intensifies Globally

(MasterCard battles cash in Canada. The Financial Times demands the end of cash so that banks have more control over economic recovery. They want cash to be criminal in order to establish total economic control. Therefore, “bankers go bonkers over Bitcoin’s cashless solution.” (Wanting to get a piece of the action. Actually, wanting the total action. ) Britain tries cashless society experiment. And Sweden pushes its populace to become an entirely cashless society.)


For deeper reading on becoming a cashless society:

[amazon_enhanced asin=”0736926445″ /][amazon_enhanced asin=”0306818833″ /][amazon_enhanced asin=”0736926445″ /][amazon_enhanced asin=”B000AMYC98″ /]

Ireland Leads Way to First Cashless Society

The Central Bank of Ireland is launching a €1 million campaign to create a cashless society in Ireland. The Central Bank on Dublin’s Dame Street is hoping to persuade all of the Irish to surrender their cash forever, and they’re using the current Irish economic troubles as a ripe opportunity to turn that corner on cash. The Central Bank estimates that it will save as much as a billion euros a year in processing costs if Ireland goes cashless.

The Irish strongly prefer cash and checks to debit cards and credit cards — in fact more so than any other European nationality. So, if it can happen in Ireland, it can happen anywhere. The Irish government has also long preferred checks, yet it is now setting an example for the rest of Irish society by switching all government operations to cashless transactions.

The one million euros budgeted by the Central Bank of Ireland to establish a cashless society will all be spent on an advertising campaign. The one-million euro tender to ad agencies says the campaign will endeavor to “win the hearts and minds” of consumers and merchants toward the benefits of becoming an entirely cashless society. In an economy and population the size of Ireland’s, a million-euro ad campaign is a very large campaign.

Since U.S. society is not terribly concerned that the government is recording all phone conversations and emails — because the government promises it will only pay attention to those conversations if you do something illegal — then giving the government total surveillance over all financial transactions may not stir much ire even in Ireland. Think only of how readily U.S. society gave up protection from government intrusion that required due process of warrants because of fears about terrorism. Will the Irish be persuaded as easily to give up freedom from government intrusion in all financial transactions due to fears of economic failure?


Read the full story about Ireland’s cashless society campaign here.


[amazon_link id=”0306821478″ target=”_blank” ]The End of Money: Counterfeiters, Preachers, Techies, Dreamers–and the Coming Cashless Society[/amazon_link]

Say good-bye to your beloved Benjamins, because the world is going cashless. So says David Wolman, contributing editor to Wired Magazine. In The End of Money, Wolman explores the drastic implications. How is it happening? What’s at stake? Why does it matter? Each chapter of this timely and fascinating book focuses on a specific aspect of the coming cashless society. Its cast of compelling characters includes an end-times fundamentalist who views the growing obsolescence of cash as a sign of the coming rapture; an Icelandic artist; an American libertarian and coin-maker convicted on federal charges for the distribution of “Liberty” coins and Ron Paul dollars; and an Indian software engineer (self-billed as “the assassin of cash”) whose firm is enabling digital payment methods that are lifting the living standards of thousands of poor New Dehli residents via their cell phones.

Raising the stakes with a personal experiment, Wolman goes (almost) a full year without using cash at all. All told, The End of Money offers everything there is to love about popular nonfiction, rendering a complex subject entertaining and easily approachable for a wide audience while proving the ultimate adventurousness inherent in a curiosity about the workings of the world.


More reading about the crash of cash:

[amazon_enhanced asin=”1603580786″ /][amazon_enhanced asin=”0873649206″ /][amazon_enhanced asin=”1565075234″ /][amazon_enhanced asin=”0470821701″ /][amazon_enhanced asin=”1622170342″ /]