Special Guest: Mark Nestmann – Lawyer, International Taxation Law

After establishing a noted career in international investment, Mark Nestmann left the US for three years to study for his “Master of Law” (LL.M.) degree in international tax law at the Vienna University School of Economics and Business Administration in Vienna, Austria. This is an indication of the seriousness and rigor with which Mark tackles issues in International Taxation for his high net worth clients. He shared his views with the FINANCIAL REPRESSION AUTHORITY in this exclusive interview.

FOREIGN ACCOUNT TAX COMPLIANCE ACT – FATCA

Passed in 2010 and hidden as part of a “Military Pensions Act”, no one fully understood what it meant or paid much attention to it.

“The Foreign Account Tax Compliance Act, is one of the most arrogant and one-sided laws ever passed by Congress. The idea behind FATCA, which Congress enacted in 2010, is simple: Demand that other countries enforce America’s imperialistic tax laws. And do so by the confiscation of foreign assets, if necessary.” – Why FATCA Is a Train Wreck Waiting to Happen – Mark Nestmann

“What is happening is foreign financial institutions (which is defined very broadly in the act) under the law are required to identify their US clients and force their US clients to self identify and turn over information to the IRS.”

“If the banks or countries don’t comply then 30% of their US source income (and in some case 30% of source gross sales revenues) of things like stocks, bonds, CDs etc are withheld – this is a pretty big number! The only way banks can avoid the 30% withholding tax is to essentially act as unpaid IRS informants.”

“Not surprisingly, FATCA and numerous other laws that require FFIs to enforce US money laundering, anti-terrorism, and securities regulations have led most of these institutions to fire their US clients. Perhaps one in 10 – and possibly fewer – non-US banks still permit US citizens or permanent residents to open accounts. That leaves little choice for Americans but to deal only with banks that have agreed to toe the IRS line.” – Why FATCA Is a Train Wreck Waiting to Happen – Mark Nestmann

“Non US persons investing in the US are also effected by FATCA. If their foreign bank don’t comply their US investment is whacked 30% as well – It isn’t just Americas who should care about this but basically everyone in the world!”

This is not a good time to have unreported financial accounts in countries that have already signed FATCA agreements with the US, or are about to. If you’re in this situation, you might want to seriously consider retaining a tax attorney to enroll you in the IRS’s latest Offshore Voluntary Disclosure Program.

PASSIVE FOREIGN INVESTMENT COMPANY – PFIC

“PFIC is another aspect of Financial Repression and aspect of regulatory restrictions on investment choices.”

“If you have an investment vehicle registered outside the US the IRS will consider it a PFIC. As an example of the way this tax is very unfavorable is that unless an offshore Mutual Fund qualifies as a US Mutual Fund when you sell it (or deemed to sell it) you have to file not only a return on the income by also a “throwback” interest charge for EVERY YEAR you held the fund. Additionally the tax rate is computed at the highest marginal rate in that year!”

“What happens is that people who held offshore mutual funds for a long period of time windup losing every penny of income in that fund because it is paid out in taxes and interest penalties.”

… there is much, much more in this 26 minute video interview covering:

• CITIZENSHIP TAXATION (including the absurdity of 1986 Tax Legislation for “Mars”??)
• UNOFFICIAL CAPITAL CONTROLS NOW IN PLACE,
• US 2008 “EXIT TAX” (for citizens and Green Card holders on unrealized gains),
• INHERITANCE IRS TAX GRABS,
• THE NEW EX-PATRIOT ACT,
• INVESTING ABROAD,
• THE RATE OF ACCELERATION OF RESTRICTIVE FOREIGN CHOICES FOR AMERICANS,
• THE GROWING MOVEMENT TOWARDS SECOND CITIZENSHIP PROTECTION,
• WHY THE LEGAL ABOLISHMENT OF CASH IS COMING.

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

LINK HERE to the Article

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Special Guest: John Mauldin – Financial Author, Writer & Publisher

FINANCIAL REPRESSION

“My recent book ‘Code Red’ was really all about Financial Repression. We were talking then about Currency Wars which has come to be played out. We were talking then about Central Banks driving down interest rates on savings to force retirees and savers into other types of investment and take more risk. They want them to move more out onto the risk curve which the central bankers believe will stimulate the economy. What they don’t understand is that taking it from savers, it takes it from their consumption behavior patterns.”

They are robbing from Peter to pay Paul, but in this case Paul is the banks and Wall Street Interests. It is not for the guy on main street.

“When the central banks start messing around with the markets they change the price of money and it has all sorts of unintended consequences!”

SEVENTH ANNIVERSARY OF ZERO INTEREST RATES

“This period of zero interest has created an extraordinary set of malinvestments as a result of unintended consequences. One example is they have money real cheap for Texas oil men. When you make money cheap for Texas oil men they punch holes in the ground. They moved out ‘onto the edge’. It created employment and drove rig prices up.” … “It changed behaviors, it changed how we think the world works – we will see how it works out!

BOND LIQUIDITY CRISIS

“Investors have been moving into high yield (HY) bonds. We are issuing risky HY bonds that are much more risky than 2007 with less covenants. Its like we didn’t learn anything! People feel they have to have more yield and can’t survive without it. We have bond funds where people are chasing longer duration bond funds. If interest rates on the long end of the curve grows by 1%, these longer duration bond funds (2 of the largest funds in the world) could lose 20%. Investors in 401K’s who see 20% losses will panic and hit the sell button. Because we wrote a bill called Dodd-Frank, which basically says you banks can’t get involved in providing liquidity to this market because we don’t want you to take the risk – they have shoved the risk to investors who will all try and get out the door at the same time!”

“It would not surprise me in the next crisis (and it will happen) to see the Federal Reserve step in and start directly funding Mutual Funds and ETFs trying to provide liquidity into a panicking market!”

A ‘SKYROCKETING’ DOLLAR

As John wrote in “code red” he sees a continuing strengthening in the US$.

“The dollar is going to get stronger than any of us can even imagine!”

“The BIS cites that emerging markets have borrowed some $9T in US$ terms.” As emerging markets weaken they must pay their loans in appreciating dollars. There is presently a mad scramble ensuing to cover this carry trade. Mauldin believes it will get even worse because of Japan.

“Japan is just continuing to print money. They are just going to print more money! When that doesn’t work they will print even more money. They have a sovereign debt crisis that the only way they can solve it to trash their currency and to move the debt they have generated from banks and pension funds unto the balance sheet of the central bank. That is their only solution. Today the 10 Year JGB market (it used to be one of the most liquid in the world) if the BOJ is not buying there are no trades! That is just shocking and is going to put pressures on currencies all over the world!”

“This is movie we just don’t believe will end well!”

LIKELY SCENARIO

1. A couple of countries have a major crisis,
2. It may possibly roll from country to country,
3. The Federal Reserve will supply SWAP lines to central banks around the world,

“Investors at this stage should start to consider what is their exit strategy!”

… and much more in the video discussion…. John gives his advise on what things investors must now be concerned with and how they should be preparing.

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

LINK HERE to the Podcast

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Mises Institute’s Dr. Joseph Salerno recently spoke .. Today cash is under attack like never before. Ultra low interest rates are the norm for commercial bank accounts. In Europe, as the ECB ventures into negative nominal interest rates, certain banks threaten to charge customers for depositing cash. Meanwhile, certain European bonds now pay negative yields, effectively turning them into insurance products rather than financial assets. And some economists now call for the outright abolition of cash, which shows just how far some will go in their crazed belief that economic prosperity can be commanded by forcing us to spend rather than save .. The War on Cash is real, it’s about financial repression & it will intensify .. 28 minutes

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Financial Repression: The War on Cash

Wall Street for Main Street’s Jason Burack & Gordon T Long discuss the escalating war on cash .. why it is happening, when cash could be abolished .. what the real drivers of this movement are .. discussion on financial repression developments.. about 1 hour

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Special Guest: John Richardson – Lawyer, FATCA & Citizenship Counselling

FINANCIAL REPRESSION, FATCA & US TAXATION

JOHN RICHARDSON, is Canadian based lawyer with a specialized practice of US Taxation abroad for US Citizens. He is the publisher of the web site:citizenship solutions.ca. He tackles the following head-on with “no holds barred”!

You will never view US Taxation the same after listening to this 38 minute podcast.

– How citizenship taxation has made U.S. citizenship a disability in the modern world

– Why renouncing U.S. citizenship is an excellent investment for “U.S. citizens” not living in the U.S.

– How the U.S. “Exit Tax” triggered by renouncing U.S. citizenship operates to confiscate non-U.S. assets outside the U.S.

– How citizenship taxation imposes a “capital tax” on any country that has U.S. citizens resident in it

– How FATCA allows the U.S. to increase its tax based by expanding the definition of citizenship

– How FATCA lowers the international standard of human rights in the world

– How FATCA compliance costs will keep the poor countries poor

– The FATCA Sanction and the “Weaponization of Finance”

– FATCA English and FATCA Forms

– Why the U.S. will always prefer FATCA to GATCA

– FATCA and the future of the dollar as the major world reserve currency

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Special Guest: Ellen Brown – Founder of the Public Banking Institute, Author and Lawyer

Ellen Brown has written to popular books on banking, is the founder of the Public Banking Institute and ran for California State Treasurer in the last election. She knows a thing or two about banking. What she has to say is no pretty.

BANKING IS IN WORSE SHAPE

1. Loans for small business is harder to get,
2. Big Banks are lending less,
3. Big Banks have more derivatives than ever with 98% controlled by the big 4,
4. Small to Medium size banks are having more difficulties making loans because of Dodd-Frank and Basel III. (Rules which favor big banks).

The rules are effectively competitively disadvantaging the small to medium sized banks in favor of the banks who got us into the financial crisis in the first place and have the lobbyists to secure favorable advantages. It is the smaller to medium sized banks that have traditionally funded small business growth and innovation in America.

STEALTH BAIL-IN VERSUS BAIL-OUT PROVISIONS

In 2010 the congress moved to stop future bailouts but brought in “bailins”. In the future if the big banks fail due to risky loans they will be forced to recapitalize themselves but with unsecured creditor funds. This means using depositor funds who are the largest unsecured creditor class of the banks. The public is generally unaware of this shift.

“Cyprus-style confiscation of depositor funds has been called the “new normal.” Bail-in policies are appearing in multiple countries directing failing TBTF banks to convert the funds of “unsecured creditors” into capital; and those creditors, it turns out, include ordinary depositors. Even “secured” creditors, including state and local governments, may be at risk. Derivatives have “super-priority” status in bankruptcy, and Dodd-Frank precludes further taxpayer bailouts. In a big derivatives bust, there may be no collateral left for the creditors who are next in line. 

WHY NEGATIVE NOMINAL BOND YIELDS?

Ellen suggests that the reason we are seeing $5T in Sovereign Bonds now trading with negative nominal yields is because the larger banks need them for collateral in the Repo market. The Fed has reduced the availability of bonds and the banks need the bonds for leverage. They simply don’t mind paying a small price to obtain the lending leverage.

PROFITS IN DERIVATIVES

As Citigroup CEO Chuck Prince so infamously cited prior to the 2008 Financial Crisis, “you have to get up and dance while the music is playing!” Today Ellen believes the pursuit of yields and use of derivatives is about short term profits with little regard to the longer term issues where depositors will be on the financial hook. The banks senior secured debt holders now receiving large interest fees will once again be protected. Shareholders, depositors and those lower on the capital structure will be the losers.

OTHER SUBJECTS

• The secretive issues with the stealth TPP (Trans-Pacific Partnership),
• Campaign finance, big money and running for public office,
• A public bank solutions and the North Dakota model,
• Coming Infrastructure spending,

…. and much more in this 32 minute video.

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

LINK HERE to the Article

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Webinar with Sprott’s John Embry (the Special Guest), Conquer Change’s Robert Ian, Financial Survival Network’s Kerry Lutz, and Financial Repression Authority’s Gordon T Long.

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Webinar with Sprott’s Rick Rule (the Special Guest), Conquer Change’s Robert Ian, Financial Survival Network’s Kerry Lutz, and Financial Repression Authority’s Gordon T Long.

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Graham Summers on the war on cash – part of financial repression .. identifies a Federal Reserve paper written back about 15 years ago calling to do away with cash entirely .. the idea proposed was to implement a “carry tax” on physical cash using an expiration date if depositors are not willing to spend the money .. “The idea here is that since it costs relatively little to store physical cash (the cost of buying a safe), the Fed should be permitted to ‘tax’ physical cash to force cash holders to spend it (put it back into the banking system) or invest it .. The way this would work is that the cash would have some kind of magnetic strip that would record the date that it was withdrawn. Whenever the bill was finally deposited in a bank again, the receiving bank would use this data to deduct a certain percentage of the bill’s value as a ‘tax’ for holding it .. The Fed has declared a War on Cash, and a ‘carry tax’ is coming.”

LINK HERE to the Article & Paper

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

– Euro banks no more stable now than in run-up to financial crisis crash
– Banks in France, Spain, Italy are “highly vulnerable to failure”
– Low quality bank equity not sufficient to withstand shock
– Risk to system “enormously underestimated”
– Investor deposits at risk of “bail-ins” – financial repression

LINK HERE to the Article

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

FinancialSurvivalNetwork.com and FinancialRepressionAuthority.com present: LIBERTY MASTERMIND LIVE WEBINAR. Join Kerry Lutz, Gordon Long and Robert Ian (ConquerChange.com) as they interview renowned financial and precious metals experts JOHN EMBRY and RICK RULE. Mr. Embry is Chief Portfolio Strategist at Sprott Asset Management and
Mr. Rule is Chairman of Sprott U.S. Holdings. This LIVE event will feature up-to-the-minute analysis of the markets with a discussion of current events/trends including the War on Cash, Financial Repression, Gold and Silver, and YOUR QUESTIONS.

This Webinar is presented by the Liberty Mastermind Symposium and is sponsored by:

FinancialRepressionAuthority.com – Macroprudential Policy Advisors – educating investors globally in understanding the challenges of investment and protection in the unfolding Era of Financial Repression.

FinancialSurvivalNetwork.com – Helping you survive and thrive in the new economy.

LINK HERE TO REGISTER NOW

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Mark Nestmann essay focuses on the war on cash, offers helpful suggestions to investors & savers .. Here is Nestmann’s advice:
1. draw down bank reserves & accumulate cash – document the withdrawals to prove the legal origin of the cash in the future
2. make sure you get newly issued bills because more than 95% of circulating bills are tainted with drug residues which under U.S. law allows the cash to be confiscated
3. convert a portion of assets in banks or in cash to gold – store it outside of the banking system
4. keep the assets you maintain in banks which are strong to avoid the coming bail-ins
5. consider putting some assets into electronic-based currencies [like Bitcoin, BitGold etc.]

LINK HERE to the Article

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Special Guest: Mark Thornton PhD – Senior Fellow Mises Institute

ACCUMULATION OF DEBT

Debt levels are now at critical levels:

• Excess accumulation of debt has become a critical burden to the productive capacity of the global economy,
• Significant levels of global investment is presently malinvestment,
• Excess global capacity has been used to produce none-productive assets,
• Lack of Price Discovery and Mispricing of Risk are distorting economies and investment behavior,
• Many parts of the economy are fragile and a recssion is now knocking on the door of the US,
• …. and more

AUSTRIAN PRESCRIPTION

• The Federal Reserve needs to get out of the interest rate markets and allow the markets to work properly,
• The Federal Government needs to balance budgets and cut back spending tremendously,
• The Government needs to signal to markets particpants that they are not going to see their taxes increased significantly,
• The Government needs to demonstrate they are going to do something about the national debt and unfunded liabilities.

These policy positions would begin to incent investment very quickly.

The Central Problem is Unsound Money

FINANCIAL REPRESSION

“A financial scam of the government over the private economy … It is aimed at taking advantage of their citizens, savers and investors.“

Government authorities are:

• Printing money,
• Issuing enormous amounts of debt,
• Suppressing interest rates,

.. all with the intention of exploiting the worker and inflating the value of the goods they buy, as wages fail to keep up. Savers are now receiving negative real rates of returns which is the government extracting resources for themselves at the expense of the common man.

WAGING WAR ON SAVERS

WINNERS: The policies of Financial Repression help:

• Banks
• Large Corporations,
• Government,
• Large Borrowers,

LOSERS: The losers are:

• Savers,
• Consumers,
• Producers,
• Laborers,
• Entrepreneurs

POLICIES: The world wide economy is suffering as a result of the policies which include:

• Inflation,
• Zero Interest Rates
• Quantitative Easing,
• Heavy Regulation (Healthcare and Banks)

This is an enormous problem in the modern context.

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

The war on cash is an unintended consequence of the financial repression macroprudential policy of the zero or negative interest rates .. if your bank is charging you interest on your bank deposit, why not just get your money & leave it under your mattress at 0% (higher) yields? – so governments & central banks are likely to attempt to abolish cash to eliminate this action .. what will be the effect on gold? – Russell Napier: “In such a world, zero-yielding gold would be a high-yielding instrument. If the authorities ever sought to restrict access to banknotes, then gold would suddenly find itself enfranchised as money for the first time in many decades. So, given the scale of these competing forces, it is just too early to say what might happen to the gold price, but the allure of gold will grow the more it becomes clear that central bank fiat has failed and the age of government fiat is dawning .. The time is ever nearer when the price of gold will rise in an era of deflation. In due course, though no time soon, the full force of government fiat will engineer a reflation, albeit one replete with the misallocations of savings and capital so beloved by the bureaucrat. Then the PhD standard, in which the value of money is linked only to the words of the over-educated, will have ended. The gold price will rise even further, ‘And the words that are used for to get the ship confused will not be understood as they’re spoken, for the chains of the sea will have busted in the night’. And that’s ‘The hour when the ship comes in.’”

LINK HERE to the Article

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

Special Guest: Jim Puplava – Founder, President & CEO, PFS Group

SPECIAL GUEST: JIM PUPLAVA is the Founder, President & CEO of PFS Group. He is also the chief author and host for the Financial Sense Newshour. Puplava’s website at financialsense.com was named a “supersite for alternative investing” by The Globe and Mail, Canada’s largest-circulation national newspaper.

Jim Puplava was one of the first researchers to go public with the concept of Financial Repression and the Financial Repression Authority wants to recognize him for this. After studying the writings of Rogoff & Reinhart, Jim Puplava identified shortly after the Financial Crisis the fact that policies of Financial Repression had been used after WWII with success and began writing and talking about them. He was a long voice on the subject.

The difference today and the previous situation after WWII is:

The US is n o longer on Gold Standard (we now have a Global Fiat based currency system),

1. Most developed economies have record Debt-to-GDP levels,
2. We now have record levels of Derivative and Securitization which didn’t exist after WWII,
3. Globalization has changed the level of financial interconnections and dependency.

FINANCIAL REPRESSION

Jim Puplava suggests:

“Financial Repression in essence is a tax on savers! Savers are getting real negative interest rates (before taxes). The work of Keynes advocated robbing savers to the advantage of the government. The losers are savers while the winners are debtors and the government”

PUBLIC IS UNKNOWINGLY CONTRIBUTING TO FINANCIAL REPRESSION

The stock market has seen a net $60-$80B go into the stock market since the rally began after the financial crisis. “The vast majority of individuals have been going into bond funds which by the way is part of the plan of Financial Suppression”.

“Most investors have gone through two bear markets in the last decade where stocks lost 45%. They are now closer to retirement than they used to be and don’t want to go through that again!”

As such they missed out on a historic market rally. “If they had held the course they would be ahead. The vast majority of people kept their money in savings because the headlines were scary.”

“The media did an exceptionally poor job of explaining what was going on in the financial markets. Instead of telling people they needed to capture or take advantage of what Financial Repression was putting into place. Financial Repression supports growth type assets like stocks and commodities (initially coming out of 2009). This is how you re-capture (the prior market draw-downs). That is not what happened.”

A BROAD RANGING DISCUSSION

The broad ranging discussion in the 35 minute interview include:

• Market drivers of Corporate Buybacks and broad Central Bank buying,
• Outlook for bond rates,
• Why Warren Buffet has 90% of his investments in equities,
• The scope of taxation on savings and what it means to future retirement planning,
• Economic growth and top line growth is not there so corporations are doing “rational allocation of capital”. This is presently driving corporate policy.
• Fiscal Policy is missing from the governments economic agenda,
• Critically important is the impact of demographics and changing Millennial buying patterns,
• Financial Repression will likely go on for a couple more years before it inevitably breaks.
• …. and more

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

International Man’s Nick Giambruno & Mises’ Joe Salerno .. the financial repression of ring-fencing regulations is intensifying in the war on physical cash .. the goal to eliminate the use of hand-to-hand currency, so that governments can document & control every transaction .. one way this war is being fought is by making it illegal to pay in cash above a certain threshold:

Joe Salerno: The War on Cash is the attempt by governments to phase cash out of their economies. Governments hate cash because they hate the financial privacy cash makes possible. And they prefer that you keep your money in a bank to help prop up an unsound fractional reserve banking system .. The War on Cash reflects the desperation of governments .. it really says that they are bankrupt, both literally, in the sense that they can’t pay what they’ve promised, and intellectually.

LINK HERE to the Article

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.

LINK HERE to Source Article

Its Happening Everywhere there are Financial Problems – Nowhere Else?

The central banks are … planning drastic restrictions on cash itself. They see moving to electronic money will:

1. Eliminate the underground economy,
2. Prevent a banking crisis.

FRANCE

France passed another Draconian new law that from the police parissummer of 2015 it will now impose cash requirements dramatically trying to eliminate cash by force.

French citizens and tourists will then only be allowed a limited amount of physical money. They have financial police searching people on trains just passing through France to see if they are transporting cash, which they will now seize.

Meanwhile, the new French Elite are moving in this very same direction. Piketty wants to just take everyone’s money who has more than he does. Nobody stands on the side of freedom or on restraining the corruption within government. The problem always turns against the people for we are the cause of the fiscal mismanagement of government that never has enough for themselves.

GREECE

In Greece a drastic reduction in cash is also being discussed in light of the economic crisis. Now any bill over €70 should be payable only by check or credit card – it will be illegal to pay in cash. The German Baader Bank founded in Munich expects formally to abolish the cash to enforce negative interest rates on accounts that is really taxation on whatever money you still have left after taxes.

EUROPE

There is a growing assumption that the negative interest rate world (tax on cash) is likely to increase dramatically in Europe in particular since it is socialism that is collapsing. Government in Brussels is unlikely to yield power and their line of thinking cannot lead to any solution. The negative interest rate concept is making its way into the United States at J.P. Morgan where they will charge a fee on excess cash on deposit starting May 1st, 2015. Asset holdings of cash with a tax or a fee in the amount of the negative interest rate seems to be underway even in Switzerland.

People can’t pull cash out of their bank accounts – for political reasons, because they’ve lost confidence in the bank, or because “bail-ins” are enacted – if cash is banned.

The Financial Times argued last year that central banks would be the real winners from a cashless society:

Central bankers, after all, have had an explicit interest in introducing e-money from the moment the global financial crisis began…

The introduction of a cashless society empowers central banks greatly. A cashless society, after all, not only makes things like negative interest rates possible, it transfers absolute control of the money supply to the central bank, mostly by turning it into a universal banker that competes directly with private banks for public deposits. All digital deposits become base money.

Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.