The Elite’s Scheme to Eliminate Cash And Impose Negative Interest Rates
Politicians love inflation, it provides an easy way out of the mess they make of managing national finances, bankers love inflation because while they lend fiat money conjured out of thin air, the loans they issue are secured against real assets such as people’s homes and valuables. However both need “the punters they fleece to have faith in the value of the fiat currency paper they hold or the numbers stored in computers that increasingly represent our wealth.
So what they have to do in order to maintain public faith in the illusion is to avoid suddenly destroying the ephemeral confidence in currencies by printing too much too fast.
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Central bankers and government finance chiefs also from time to time need to limit the options inflation-wary citizens have for avoiding the trap of watching inflation erode the value of their income, savings, and pensions. Both bankers and political players shifty are highly creative in ensuring the ill effects of perpetually devaluing currency are borne by the populace rather than the elite.
Concealing the debasement of the currency is a long-established tradition with politicians that needed to deflect attention from their reckless overspending, since Roman times when Emperor Nero began quietly reducing the silver content of the Denarius around 60 A.D. it has been common practice to increase the amount of coinage or paper in circulation, while the value of the assets it is secured against remains constant. Nero, King Henry VIII of England and many others did it by reducing the amount of gold or silver in coins and substituting base metals such as lead, copper or zinc.
Now the task is easier, the paper money is printed on may be almost worthless and the bits and bytes stored in the computers of whichever banks we use are ethereal, having no substance in the real world whatsoever. Thus central bankers and governments no longer have to contend with people finding evidence of their physically altering coinage. Any currency may be stealthily devalued electronically, simply by creating more credit, while statistics such as the highly deceptive GDP (Gross Domestic Product) figure are cited as proof of the strength of an economy even though it is only a measure of the ‘church’ the movement of money within that system.
When the nineteenth-century politician George Canning said, “I can make statistics tell me anything except the truth, he might have been referring to modern financial statistics which are designed to show the money losing purchasing power far more slowly than it actually is. Terms like “hedonic adjustments,” “geometric weighting,” and many other convoluted phrases describe the ploys used to show the politically acceptable rate of inflation to the public. What they are really doing is deceiving punters into believing the way to evaluate the strength of a fiat currency is to compare it with other fiat currencies.
In recent years the U.S. dollar has earned its reputation for “strength” simply because in the global currency exchanges of London, New York, Hong Kong, Singapore, Dubai, and others, the US dollar, being seen as a ‘safe haven’ is more in demand. The only real way to evaluate the strength of a currency is to look at what it will buy in real terms. UK Prime Minister Margaret Thatcher famously used a basket of shopping to illustrate the value of British currency. She was ridiculed by people who said that running a country is not like running a family home. I was not a fan of Mrs. Thatcher, but her message, that whether you are managing a household or a national budget if expenditure exceeds income, then as Mr. Micawber warned David Copperfield on Dickens’ novel, the result is a catastrophe.
Headlines in the financial press broadcast the Dollar versus Yen index is rising. The dollar buys more euros and yen than it did a year ago, which matters is good for tourists. In the domestic economy, however, your dollar buys far less of stuff that does matter — food, housing, and most everything people need to live.
Another trick is for the political and financial establishment to simply create money, claiming economic necessity. This is usually referred to as printing money although it is not a case of simply firing up the printing presses; Quantitative Easing to give its technical name, involves governments selling bonds to bankers and investors. The bonds, sold in £$€1000 units have a ‘coupon value’ and nominal fixed interest rate based on that. However when a central bank sells bonds on behalf of a government is usually below the coupon value, meaning the real interest rate is higher than the nominal interest rate, (3% of 1000 is 30 but if you can buy that unit for 925 but get interested on 1000 your return is around three and a quarter percent. It sounds trivial, but if you work out a quarter of one percent of twenty million, it’s not a bad day’s wages.
In the financial crisis of 2008 / 9 things took a turn for the worse as the dark forces of globalization invented a new way to rob us, they reduced ‘the base rate’ (the rate at which governments lend to banks, to zero or slightly above zero, ostensibly to encourage banks to lend cheaply and trigger a consumption-led recovery. but governments still needed to borrow money to fund the current account deficits they habitually run, and to do this they had to continue selling bonds. And bankers, whatever else they may be, are not stupid. They were happy to borrow from governments at zero or one-quarter of one percent interest and lend it straight back at three percent. Who wouldn’t be?
But having conditioned savers to accept near-zero interest rates on their savings, while inflation ate away at the value, was it possible to go a step further and persuade us to pay the banks for gambling with our money? The International Monetary Fund (IMF) recently released a document on how a “negative interest rate program,” (NIRP) might be presented to the public. Governments and supranational bureaucracies are planning a world in which banks will charge depositors for holding funds in current or savings accounts.
The problem, obviously, is that most depositors with substantial funds are not stupid, why pay bankers and watch inflation erode your savings when you can withdraw deposits and put it into jewelry, collectibles, things that will at least hold their value, or even hide it under the floorboards instead. But that option depends on cash being available. IMF officials complain:
“When cash is available, however, cutting rates significantly into negative territory becomes impossible. Cash has the same purchasing power as bank deposits but at zero nominal interest. Moreover, it can be obtained in unlimited quantities in exchange for bank money. Therefore, instead of paying negative interest, one can simply hold cash at zero interest. Cash is a free option on zero interest, and acts like an interest rate floor.”
The solution to this, according to the IMF, central bankers, academics and economics pundits is to move to a cashless society. And there is a deliberate scheme to do so. Remember, politicians are owned by bankers so they can be coerced into passing anti-cash laws on the pretext of preventing money — laundering, which would remove the ability for people to make cash withdrawals.
Now think for a moment what that would mean; all money and all financial transfers would be electronic and thus trackable. Do you think the busybody politicians have not realized a cashless society would give them via their lackeys, complete control over the minutiae of our lives? Do you think it would be long before little people with tablet computers were knocking on our doors, saying things like, “It has been noted you ate junk food three times last week so we are blocking your account from buying food at any but vegetarian and vegan shops and restaurants”; or “Our records show you and 15th of this month, so your account has been sanctioned and you will not be able to purchase any alcohol.
Internet technology in the hands of control freak corporations like Google, Apple, Facebook, and Microsoft makes these things possible, and if politicians and bureaucrats can control something they will.
The IMF officials who drafted the plan are seriously suggesting the freedom for untold millions of people around the globe to manage their own financial affairs as they think fit to be eliminated. We live in a time when the global economy is driven by growth (as John Steinbeck wrote, “If the monster does not grow it dies,) and for the economy to grow people must spend. If savers don’t spend what they have, officials will make them pay fines or suffer other penalties.
The bureaucrats who authored that IMF proposal aren’t the first to propose abolishing physical cash. Bankers and politicians have been waging the War on Cash for years now. This wish to implement negative interest rates is just one more on a list of reasons these central planners hate cash, which in reality is nothing to do with fighting cybercrime or preventing money laundering. Take it from someone who spent 30 years working in Information Technology and networks, it is much easier to steal or launder digital money than real cash.
To the ban chiefs and politicians however, ordinary people are sheep to be herded. Anyone who wishes to avoid being shorn of their hard-earned should hold real assets outside the banking system.
This article was previously published in The Daily Stirrer, a domain owned by Ian Thorpe.