The war on cash

Posted: February 19, 2016 in Uncategorized

If you read this article probably you know that quite a few leaders from Europe, US and Japan are arguing that cash should be banned!

Apart the security issue as all credit card transaction can be traced (so much for Western society freedom) there is also an economic reason.

If you look at China weakness and Yuan depreciation at world level, this is massive deflation exporter.

Deflation is scary as hell. As history teaches Japan got gripped with deflation and it is still struggling to escape from it after more than 20 years, with stock indexes 50% less than the top  (Nikkei 225 was 38995 in 1989!).

Combine this figure with the fact that quite a few Central Banks  (Europe, Sweden and Japan for now) are implementing NIRP strategy (Negative Interest Rate Policy…the bank has to pay the Central Bank a fee to keep cash) as an ultimate weapon to combat deflation.

The big issue is that the big banks are losing money with this policy as they do not dare to charge depositors to keep their cash as depositors could decide to just keep the cash under the mattress.

If you had a cashless society the issue would not exist and the banks will happily charge you to keep the money.

Happy Bank Happy Government …ok you not so happy…and you leave in a democracy. Tough luck.

Again as Su Tzu’s The Art of War says…if you know your enemy there are solutions.


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