Category Archives: Economy/Monetary Reform

War on Cash is war against your Freedom

1.08.2017 Author: F. William Engdahl

A Sinister War on Our Right to Hold Cash

An operation that began as a seemingly obscure academic discussion three years ago is now becoming a full-blown propaganda campaign by some of the most powerful institutions in the industrialized world. This is what rightly should be termed the War on Cash. Like the War on Terror, the War on Cancer or the War on Drugs, its true agenda is sinister and opaque. If we are foolish enough to swallow the propaganda for complete elimination of cash in favor of pure digital bank money, we can pretty much kiss our remaining autonomy and privacy goodbye. George Orwell’s 1984 will be here on steroids.

Let me be clear. Here we discuss not various block-chain digital technologies, so-called crypto-currencies. We are not addressing private payment systems such as China’s WeChat. Nor do we discuss e-banking or use of bank credit cards such as Visa or Master Card or others. These are of an entirely different quality from the goal of the ongoing sinister war on cash. They are all private services not state.

What we are discussing is a plot, and it is a plot, by leading central banks, select governments, the International Monetary Fund in collusion with major international banks to force citizens—in other words, us!—to give up holding cash or using it to pay for purchases. Instead we would be forced to use digital bank credits. The difference, subtle though it may at first seem, is huge. As in India following the mad Modi US-inspired war on cash late in 2016, citizens would forever lose their personal freedom to decide how to pay or their privacy in terms of money. If I want to buy a car and pay cash to avoid bank interest charges, I cannot. My bank will limit the amount of digital money I can withdraw on any given day. If I want to stay in a nice hotel to celebrate a special day and pay cash for reasons of privacy, not possible. But this is just the surface.

Visa joins the war

This July, Visa International rolled out what it calls “The Visa Cashless Challenge.” With select buzz words about how technology has transformed global commerce, Visa announced a program to pay selected small restaurant owners in the USA if they agree to refuse to accept cash from their customers but only credit cards. The official Visa website announces, “Up to $500,000 in awards. 50 eligible food service owners. 100% cashless quest.” Now for a mammoth company such as Visa with annual revenues in the $15 billion range, a paltry $500,000 is chump change. Obviously they believe it will advance use of Visa cards in a market that until now prefers cash—the small family restaurant.

The Visa “challenge” to achieve what it calls the “100% cashless quest” is no casual will-o’-the-wisp. It is part of a very thought-through strategy of not only Visa, but also the European Central Bank, the Bank of England, the International Monetary Fund and the Reserve Bank of India to name just a few.

IMF on Boiling Frogs

In March this year the International Monetary Fund in Washington issued a Working Paper on what they call “de-cashing.” The paper recommends that, “going completely cashless should be phased in steps.” It notes the fact that there already exist “initial and largely uncontested steps, such as the phasing out of large denomination bills, the placement of ceilings on cash transactions, and the reporting of cash moves across the borders. Further steps could include creating economic incentives to reduce the use of cash in transactions, simplifying the opening and use of transferrable deposits, and further computerizing the financial system.”

In France since 2015 the limit a person may pay in cash to a business is a mere €1000 “to tackle money laundering and tax evasion.” Moreover, any deposit or withdrawal of cash from a bank account in excess of €10,000 in a month will automatically be reported to Tracfin, a unit of the French government charged with combating money laundering, “largely uncontested steps” and very ominous portents.

The IMF paper further adds as argument for eliminating cash that “de-cashing should improve tax collection by reducing tax evasion.” Said with other words, if you are forced to use only digital money transfers from a bank, the governments of virtually every OECD country today have legal access to the bank data of their citizens.

In April, a month after the IMF paper on de-cashing, the Brussels EU Commission released a statement that declared, “Payments in cash are widely used in the financing of terrorist activities. In this context, the relevance of potential upper limits to cash payments could also be explored. Several Member States have in place prohibitions for cash payments above a specific threshold.”

Even in Switzerland, as a result of relentless campaigns by Washington, their legendary bank secrecy has been severely compromised under the fallacious argument it hinders financing of terrorist organizations. A glance at recent European press headlines about attacks from Barcelona to Munich to London to Charlottesville exposes this argument as a sham.

Today in the EU, as further result of Washington pressure, under the Foreign Account Tax Compliance Act (FATCA) banks outside the USA where US citizens hold a deposit are forced to file yearly reports on the assets in those accounts to the Financial Crimes Enforcement Network of the US Treasury. Conveniently for the US as the major emerging tax haven, the US Government has refused, despite it being specified in the Act, to join FACTA itself.

In 2016 the European Central Bank discontinued issuing €500 bills arguing it would hinder organized crime and terrorism, a poor joke to be sure, as if the sophisticated networks of organized crime depend on paper currencies. In the US, leading economists such as former Harvard President Larry Summers advocate eliminating the $100 bill for the same alleged reason.

$10 limit?

The real aim of the war on cash however was outlined in a Wall Street Journal OpEd by Harvard economist and former chief economist at the IMF, Kenneth Rogoff. Rogoff argues that there should be a drastic reduction in the Federal Reserve’s issuance of cash. He calls for all bills above the $10 bill to be removed from circulation, thereby forcing people and businesses to depend on digital or electronic payments solely. He repeats the bogus mantra that his plan would reduce money-laundering, thereby reduce crime while at the same time exposing tax cheats.

However the hidden agenda in this War on Cash is confiscation of our money in the next, inevitable banking crisis, whether in the EU member countries, the United States or developing countries like India.

Already several central banks have employed a policy of negative interest rates alleging, falsely, that this is necessary to stimulate growth following the 2008 financial and banking crisis. In addition to the European Central Bank, the Bank of Japan, the Danish National Bank adhere to this bizarre policy. However, their ability to lower interest rates to member banks even more is constrained as long as cash is plentiful.

Here the above cited IMF document lets the proverbial cat out of the sack. It states, “In particular, the negative interest rate policy becomes a feasible option for monetary policy if savings in physical currency are discouraged and substantially reduced. With de-cashing, most money would be stored in the banking system, and, therefore, would be easily affected by negative rates, which could encourage consumer spending…” That’s because your bank will begin to charge you for the “service” of allowing you to park your money with them where they can use it to make more money. To avoid that, we are told, we would spend like there’s no tomorrow. Obviously, this argument is fake.

As German economist Richard Werner points out, negative rates raise banks’ costs of doing business. “The banks respond by passing on this cost to their customers. Due to the already zero deposit rates, this means banks will raise their lending rates.” As Werner further notes, “In countries where a negative interest rate policy has been introduced, such as Denmark or Switzerland, the empirical finding is that it is not effective in stimulating the economy. Quite the opposite. This is because negative rates are imposed by the central bank on the banks – not the borrowing public.

He points out that the negative interest rate policy of the ECB is aimed at destroying the functioning, traditionally conservative EU savings banks such as the German Sparkassen and Volksbanken in favor of covertly bailing out the giant and financially corrupt mega-banks such as Deutsche Bank, HSBC, Societe Generale of France, Royal Bank of Scotland, Alpha Bank of Greece, or Banca Monte dei Paschi di Siena in Italy and many others. The President of the ECB, Mario Draghi is a former partner of the mega bank, Goldman Sachs.

Why Now?

The relevant question is why now, suddenly the urgency of pushing for elimination of cash on the part of central banks and institutions such as the IMF? The drum roll for abolishing cash began markedly following the January 2016 Davos, Switzerland World Economic Summit where the western world’s leading government figures and central bankers and multinational corporations were gathered. The propaganda offensive for the current War on Cash offensive began immediately after the Davos talks.

Several months later, in November, 2016, guided by experts from USAID and, yes, Visa, the Indian government of Narenda Modi announced the immediate demonetization or forced removal of all 500 Rupee (US$8) and 1,000 Rupee (US$16) banknotes on the recommendation of the Reserve Bank of India. The Modi government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism.

Notably, the Indian Parliament recently made a follow-up study of the effects of the Modi war on cash. The Parliamentary Committee on Demonetization report documented that not a single stated objective was met. No major black money was found and Demonetization had no effect on terror funding, the reasons given by the Government to implement such a drastic policy. The report noted that while India’s central bank was allegedly attacking black money via demonetization, the serious illegal money in offshore tax havens was simply recycled back into India, “laundered” via Foreign Direct Investment by the criminal or corporate groups legally in a practice known as “Round Tripping.”

Yet the Parliament’s report detailed that the real Indian economy was dramatically hit. Industrial Production in April declined by a shocking 10.3 percent over the previous month as thousands of small businesses dependent on cash went under. Major Indian media have reportedly been warned by the Modi government not to publicize the Parliament report.

If we connect the dots on all this, it becomes clearer that the war on cash is a war on our individual freedom and degrees of freedom in our lives. Forcing our cash to become digital is the next step towards confiscation by the governments of the EU or USA or wherever the next major banking crisis such as in 2007-2008 erupts.

In late July this year Estonia as rotating presidency of the EU issued a proposal backed by Germany that would allow EU national regulators to “temporarily” stop people from withdrawing their funds from a troubled bank before depositors were able to create a bank “run.” The EU precedent was already set in Cyprus and in Greece where the government blocked cash withdrawals beyond tiny daily amounts.

As veteran US bank analyst Christopher Whelan points out in a recent analysis of the failure of the EU authorities to effectively clean up their banking mess since the 2008 financial crisis, “the idea that the banking public – who generally fall well-below the maximum deposit insurance limit – would ever be denied access to cash virtually ensures that deposit runs and wider contagion will occur in Europe next time a depository institution gets into trouble.” Whelan points out that nine years after the 2008 crisis, EU banks remain in horrendous condition. “There remains nearly €1 trillion in bad loans within the European banking system. This represents 6.7% of the EU economy. That’s huge. He points out that banks’ bad loans as share of GDP for US and Japan banks are 1.7 and 1.6 percent respectively.

As governments, whether in the EU or in India or elsewhere refuse to rein in fraudulent practices of its largest banks, forcing people to eliminate use of cash and keep all their liquidity in digital deposits with state regulated banks, sets the stage for the state to confiscate those assets when they declare the next emergency. If we are foolish enough to permit this scam to pass unchallenged perhaps we deserve to lose our vestige of financial autonomy. Fortunately, popular resistance against elimination of cash in countries like Germany is massive. Germans recall the days of the 1920s Weimar Republic and hyperinflation as the 1931 banking crises that led to the Third Reich. The IMF approach is that of the Chinese proverb on boiling frogs slowly. But human beings are not frogs, or?

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook.”
https://journal-neo.org/2017/08/21/a-sinister-war-on-our-right-to-hold-cash/

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As a river dies:

India could be facing its ‘greatest human catastrophe’ ever

25 Jul 2017 09:25AM(Updated: 25 Jul 2017 06:02PM)

As crops and farmers die, experts blame a man-made “drought of common sense” for the drying up of Southern India’s Cauvery River, once a lifeline to millions. Insight investigates.

 

Read more at http://www.channelnewsasia.com/news/cnainsider/as-a-river-dies-india-could-be-facing-its-greatest-human-9060070

INDIA: Much of the once bountiful and lush-green rice fields was reduced to a dry, yellow-brown landscape, after successive years of scanty rainfall and severe drought.

For farmer Mr Vijayakumar, 52, the rice crop was his family’s sole source of income. Hit by the double whammy of crop failure and mounting debts, he took a lonely walk to the edge of his two-acre rice field in Tamil Nadu in January this year.

There the tough, rugged man, used to the hard toil of a farmer for decades, hanged himself from a nearby tree.

“He was constantly worrying about the debts,” said his wife Vijayakumari, who is now struggling to cope with the loss of her husband and their escalating debts. “His mind was never at peace. He kept saying that there were so many debts to repay and he was worried about how his only son was going to manage all that.”

Mr Vijayakumar had borrowed from moneylenders to pay for his daughter’s wedding and for fertilisers for his crops which didn’t grow, she told the Channel NewsAsia programme Insight.

He is just one of roughly 350 farmers who have died in Tamil Nadu in recent months, according to unofficial estimates. In the past 20 years, more than 300,000 indebted farmers in India have committed suicide – many due to family debts, reported The Hindu newspaper.

PEOPLE ARE LOSING HOPE

Years of scanty and inadequate rainfall have led to the drying up of water reservoirs and village water bodies in southern India, especially the grain-growing regions of Tamil Nadu which is facing its worse drought in 140 years.

Water activist Dr Rajendra Singh said: “We have not seen a drought of this intensity before. People have lost hope in life and are committing suicide.”

“People are leaving the villages and moving to the cities… They don’t have food to eat and water to drink. There is no fodder for the livestock,” added the winner of the Ramon Magsaysay Award and the Stockholm Water Prize.

Watch: A human tragedy unfolding (5:57). See the full Insight special here.

The once-mighty 800km Cauvery River, a major lifeline in southern India on which millions of farmers depend, has turned into dust tracts in several sections before it trickles down to the Bay of Bengal.

Dense forests once helped to retain water on the hill slopes, enabling slow percolation into the streams that feed the river. But widespread deforestation along the Cauvery Basin has led to soil erosion and a reduction in rainfall.

Scientist and environmentalist Dr Vandana Shiva pointed out that the region gets only four months of rain during the monsoons, during which in ideal circumstances, the water would be naturally stored in the humus and earth of the forests.

“But if you don’t store it, the rain comes, causes a flood, and you have a drought,” she said.

“The second reason is that there is an over extraction (of water) beyond the capacity of the river. That extraction is leaving the river dry.”

SMALL RIVERS DRYING UP

Dr Shiva also blames the government’s ambitious scheme that aims to link Indian rivers by a network of reservoirs and canals, with dams diverting the flow from areas with a water surplus.

She said: “There’s this assumption that you can have bigger and bigger cities and you can divert water from hundreds and thousands of miles away.

To take all the rivers in India and divert them to the cities and industrial areas – all rivers will die.

Critics argue that damming the rivers will cause coastal erosion, deforestation and the displacement of people, and exacerbate the impact of climate change.

Dr Singh pointed out that the introduction of centralised irrigation systems and large dams have led to serious soil erosion. while the over-extraction of underground aquifers depleted the water table.

“There was no more water to be drawn from under the ground, and the water at the top flowed away with the soil, causing erosion and silting,” he said. “All the small rivers are dying.”

Bauxite mining has also wreaked havoc and contributed to a collapse of groundwater levels.

Environmental activist Mr Piyush Manush said that the rampant extraction of bauxite – from which aluminium is produced – from the Servarayan Hills has led to an environmental disaster.

Bauxite absorbs rainwater and slowly releases water into the streams. But the extraction of bauxite has left the hills bare and arid. “If the hill is undisturbed, the bauxite and other minerals inside act as a sponge to absorb water and release it slowly.

“Now, if you chop the hill for bauxite, the hill gets hardened with exposure to sunlight. And once it hardens, it loses that sponge effect,” he said.

DEBT DESPERATION AND SUICIDE

Faced with the water crisis and their crop failures, desperate farmers have turned to money lenders for loans to buy food, seeds, fertiliser and equipment.

These money lenders charge exorbitant interest rates and as debts pile up, farmers often find themselves unable to cope with the pressure. Some think that by killing themselves, they can save their families – but moneylenders don’t stop hounding the survivors.

“We still have debts that we haven’t been able to repay. None of our debts have been cancelled,” said Madam Vijayakumari.

The widow of rice farmer Ashokan, who was queuing for another bank loan for his failed crops when he collapsed and died – she believes from the stress.

Not far from her village, another rice farmer Mr Ashokan, 55, was also troubled by the same thoughts of crippling debt and destruction of crops.

He went to the bank to get another loan to buy pesticides and fertilisers, but collapsed and died while standing in line. His widow, Madam Vedhavalli, believes he died due to the stress of his crop failures.

In April, distressed and angry drought-hit farmers from Tamil Nadu took to the streets of Indian capital New Delihi to protest, demanding farm loan waivers. A few state governments have conceded, agreeing to waive their loans amounting to hundreds of millions of dollars.

Farmers protesting, demanding waivers of their loans.

But farmers like Mr Gnanaprakasam, 59, in Samudayam village still feel threatened, with upstream states like Karnataka refusing to share Cauvery River’s water with neighbouring Tamil Nadu.

Water wars broke out after Karnataka refused to comply with India’s Supreme Court ruling that it release more water, leading to violence on the streets, reported the Hindustan Times. If Karnataka doesn’t accede, Mr Gnanaprakasam said:

The districts of Thanjavur, Tiruvarur and Nagapattinam will transform into deserts. All the crops will be destroyed.

“Farmers and labourers will leave the village without a choice. That’s already happening now. Many farmers have lost their lives. They have died out of shock. Some have committed suicide.”

Some activist believe the plan to divert more water to the cities and industrial areas is partly to blame for the drought.

FOR NOW, A COMMUNITY SOLUTION?

Dr Singh, also known as India’s Water Man, has been fighting an uphill battle to revive water bodies and rivers in the semi-arid region of Rajasthan for more than 30 years. He has set up more than 8,000 water tanks and revived seven rivers in Rajasthan.

In Alwar district, about 200km from Delhi, he has used path-breaking water conservation techniques to bring water back to more than 1,000 villages. He believes local water preservation and community-driven water management systems are the only ways to end the “terrible disaster”.

Dr Rajendra Singh, winner of the Ramon Magsaysay Award and the Stockholm Water Prize.

He said:

The solution to this is community-driven decentralised water management. This is a solution that the government is not looking to implement. They are only looking at large dams and centralised irrigation systems – which are the main reasons for this drought.

Dr Sunita Narain, director general of the India-based research institute the Centre for Science and Environment, believes that Tamil Nadu needs to augment its water supply through a decentralised water harvesting system. This means building water tanks, and going back to the traditions of harvesting water, restoring and recharging every lake and pond in Tamil Nadu.

She also thinks that the state needs to move away from water intensive crops such as sugar cane.

“Third, make every industry and city in Tamil Nadu water-wise, so you use less water and you recharge and recharge every drop of water the Singapore way. It has to be a combination of all three,” she said.

 

For the farmers’ widows like Vijayakumari and Vedhavalli, it may be a case of too little, too late.

“Saving the Cauvery River is akin to saving the lives of the farmers,” said Ms Vedhavalli. “We are afraid to go ahead with anything now. We can’t depend on the rain for anything.

“Rain only comes occasionally. At times, when there’s too much rain, we suffer from floods. Now we are facing drought.”

Watch the Insight special on ‘India’s Dry Rivers’ here.

 
A lifeline to southern India, the mighty Cauvery River is turning into a vast sandpit.

Read more at http://www.channelnewsasia.com/news/cnainsider/as-a-river-dies-india-could-be-facing-its-greatest-human-9060070

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The U.S. government is now imposing these stealth capital controls…absolute control coming?

From Chris Lowe, Analyst, Bonner & Partners:

Already, as an American, you are not free to spend your money as you see fit. (For a full breakdown, see “Bank Secrecy Act Regulations Explained” below.)

JPMorgan Chase — the country’s biggest bank — has banned cash payments for credit card debt, mortgages, and car loans. It has also banned the storage of “any cash or coins” in safe deposit boxes.

And all U.S. banks now view large cash withdrawals as suspicious…

Under the Bank Secrecy Act, if you withdraw $10,000 or more in a day, your bank is required to file something called a Currency Transaction Report with the Financial Crimes Enforcement Network (FinCEN). This is a special bureau within the Department of the Treasury that’s tasked with combatting money laundering, terrorist financing, and other financial crimes.

And your bank is required to file something called a Suspicious Activity Report with FinCEN if it believes you are trying to avoid triggering a Currency Transaction Report by withdrawing smaller cash amounts. This puts all cash withdrawals under the microscope.

Bank Secrecy Act Regulations Explained

The Bank Secrecy Act (BSA) requires U.S. financial institutions to help prevent money laundering.

Banks must keep records of all their financial activity… including filing a Suspicious Activity Report (SAR) if customers make transactions a bank deems strange.

The BSA also requires banks to file other types of reports, including:

Currency Transaction Report (CTR): A bank must file this report anytime someone withdraws or deposits more than $10,000. It also must file a report if a person makes multiple combined transactions over $10,000.

Report of International Transportation of Currency or Monetary Instruments (CMIR): If you send or receive more than $10,000 from outside of the United States, banks must file a CMIR.

Report of Foreign Bank and Financial Accounts (FBAR): If you have a financial account in another country, banks must file this report if your accounts exceed $10,000 in a calendar year.

There are also plenty of regulations about opening a bank account in the U.S…

Form W-9 Request for Taxpayer Identification Number and Certification: If you don’t provide a valid taxpayer ID—or fail to pay income taxes—the bank must withhold your funds.

Identification Requirements: You must provide your name, address, taxpayer ID, and date of birth. You also must submit a valid driver’s license, state ID, or passport.

Office of Assets Control (OFAC) Compliance: This rule prohibits you from opening an account if you have conducted business with the governments of Cuba, Burma, Myanmar, Iran, and Sudan—or individuals in those countries.

Unlawful Transactions: You must certify that your accounts won’t be used for internet gambling or any other illegal activity.

And taking out cash from the bank isn’t the only activity the government deems suspicious…

Other actions that will trigger a report being filed with the feds include: depositing $10,000 or more in cash with your bank… a foreign exchange transaction worth $10,000 or more… taking more than $10,000 in cash into or out of the U.S… receiving more than $10,000 in cash in a single payment as a business… or having more than $10,000 in accounts outside the U.S. during a calendar year.

And even if you manage to get your cash out of your bank, having it on your person also makes you a target of the authorities…

Under civil asset forfeiture laws, police and federal agents can confiscate any cash you might have on you if they merely suspect it was involved in a crime. They don’t need to bring criminal charges against you or prove any wrongdoing. And they can keep any seized cash for themselves.

According to The Washington Post, since 2007, the DEA alone has seized more $3.2 billion in cash from Americans in cases where no civil or criminal charges were brought against the owners of the cash.

And forget about opening up a bank account offshore to diversify your risk of these kinds of clampdowns.

The Foreign Account Tax Compliance Act, or FATCA, became law in 2010. It imposes a lot of red tape on foreign banks with U.S. clients. And the costs of complying with all this red tape means opening up bank accounts for Americans no longer justifies the benefits of overseas banks.

As a result, it’s now extremely difficult for Americans to open accounts overseas. It’s de facto capital control, even if the government won’t admit it.

Regards,

Chris Lowe

http://investmentwatchblog.com/the-u-s-government-is-now-imposing-these-stealth-capital-controls/

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