It’s Official: Cash is Now Public Enemy Number One

First Major Offensive in War on Cash

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

Terrorists are no longer public enemy number one. Nor are drug lords, people traffickers, arms dealers, cyber terrorists, or any other unsavory do-badder. Today, the biggest threat to global peace and security is physical cash, a means of exchange that has flourished for over 4,000 years but which now stands accused of being the world’s biggest enabler of criminality.

A Criminal’s Accomplice

The latest person to publicly highlight the deadly threat posed by cash is Peter Sands, the former CEO of the British bank Standard Chartered, who just published a report for Harvard Kennedy School of Government imploring central banks around the world to stop issuing high-denomination notes and bills. They include the €500 note, the $100 bill, the CHF1,000 note and the £50 note.

“Such notes are the preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved,” the report warns. In other words, only criminals use cash. High-denomination notes, the report adds, “play little role in the functioning of the legitimate economy, yet a crucial role in the underground economy.”

Sands is no doubt a leading authority on the role of cash in the criminal economy, having led a company that schemed with the government of Iran to avoid U.S. sanctions and “hide from regulators roughly 60,000 secret transactions, involving at least $250bn, and reaping SCB hundreds of millions of dollars in fees.”

That’s according to the New York State department, which in 2012 fined Standard Chartered close to a billion dollars for leaving the US financial system “vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity.” Two years later the bank’s anti-money-laundering systems were found wanting, and in 2015 it was once again accused of breaking Iran sanctions.

The fact that the bank compiled an extensive rap sheet under Sands’ watch does not in any way disqualify him from leading an investigation on the enabling role of cash in organized crime. On the contrary, it makes him the perfect point man. Sands is also a member of the Board of Directors of the Institute of International Finance, the global association of financial institutions, and chairman of their Special Committee on Effective Regulation.

First Major Offensive in War on Cash

In his report, Sands and his illustrious colleagues urge the world’s largest 20 economies to “take up the matter” – i.e. broach the subject of banning large denominations of cash – at the next G20 summit in China. If the world’s leading policy makers follow through on the report’s advice, it will be the first major offensive in the global war on cash.

Sands is not the first senior banker to scapegoat cash for society’s ills. For years assorted bankers, politicians, technocrats and business leaders have waged an intensifying war of words against physical currency [The War on Cash in 10 Spine-Chilling Quotes].

A few weeks ago Norway’s biggest bank called for its outright abolition after guesstimating that as much as 60% of the country’s physical cash is out of the central bank’s control. And for central banks, control is everything.

In a similar vein, John Cryan, the CEO of Deutsche Bank, predicted that cash “probably won’t exist” in ten years time. “There is no need for it, it is terribly inefficient and expensive,” Cryan said.

This is news to most people in Germany, where approximately 80% of all transactions are conducted in cash (in the US and UK, it’s less than 50%). Cash is also the dominant form of payment for larger transactions, according to a recent survey. Does that mean that most Germans are, in the logic of the report’s findings, criminals? Obviously not! Or at least not yet! They just believe that using cash is a good way of keeping track of their personal finances as well as protecting their privacy and anonymity. Indeed, as the survey points out, the real point isn’t so much that Germans love cash. It’s that they loathe consumer debt.

The Real Reason for Offing Cash

Over the last few years every imaginable reason has been trotted out for doing away with cash, from creating a more inclusive financial system to making life easier, more comfortable and more productive. A Bloomberg article called cash just about every ugly name under the sun, including “dirty and dangerous, unwieldy and expensive, antiquated and so very analog.”

However, the one reason for offing cash that hardly ever gets a mention is that it represents a limiting factor on central banks’ ability to continue their insane negative-interest-rate experiment, as WOLF STREET reported last year:

Cash significantly limits central banks’ ability to continue conducting arguably the greatest financial heist of the modern age, i.e., negative interest rate policy (NIRP). The only way that central banks can maintain negative interest rates ad infinitum is by abolishing cash altogether, as the Bank of England chief economist Andrew Hadlaine all but admitted. As long as cash exists, there’s no way of preventing depositors from doing the logical thing – i.e. taking their money out of the bank and parking it where the erosive effects of NIRP can’t reach it. [First They Came for the Pennies, in the War on Cash]

Cash also serves as a means of exchange in which the relevant rent seekers (banks, credit card companies, tech firms) are left out of the equation, unable to wet their beaks in commissions and fees and to collect the treasure of consumer data that comes with electronic payments. Throw in the nagging fact that in a world where physical currency continues to exist, government and corporations cannot track and trace your every movement, and it’s not hard to understand why cash is now public enemy number one in many of the world’s jurisdictions. By Don Quijones,Raging Bull-Shit.

Then there’s the hundred-billion-dollar question. Read…  The Big-Oil Bailouts Begin

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  41 comments for “It’s Official: Cash is Now Public Enemy Number One

  1. TheDona says:

    They can threaten all they want, but cashless is not going to happen. My feeling is they just don’t want people to go cash out at the bank. I had to make day in advance order on MY cash last time to the bank.

    The Japanese (Boomers) are pretty heavy cash hoarders. Remember all of those safes sitting around after the Tsunami?

    Japan has talked about re-issuing currency and charging a fee for old currency to get the money out of the safes and mattresses.

    If they want to target cash….then seize the offshore accounts!!!

    My 10 year old neighbor is not going to accept Apple pay to dog sit. And to comment on the “high denomination” $100 bill….how far does that go these days…One trip to the grocery store?

    • Petunia says:

      Actually your 10 year old neighbor is probably very likely to accept Apple Pay or Pay Pal as a payment option. The kids all use these systems anyway.

      The Somalians, Iraqis, Afghans, Indonesians, and others we pay off all over the world are less likely to accept a debit card as payment.

  2. Taco says:

    If this is really the case, then why aren’t more people interested in cryptocurrencies? I’ve used Bitcoin for years to pay vendors and employees all over the world saving tons in fees from the centralized Paypals of the world. Also, from a store of value standpoint, bitcoin’s release schedule is based on unbreakable math…when fiat currency is printed at the whims of the elites.

    • Goose says:

      “If this is really the case, then why aren’t more people interested in cryptocurrencies?”

      Because in Bitcoin

      1. All transactions are public -you must use Tor to engage in transactions. Every transaction ever done using the coins is logged and publicly availible.

      2. The transaction chain can be broken if you have a fast enough computer (it has already been done)

      3. there are a limited number of bitcoins and the ‘fee’ miners get will vanish, although there are obviously ways to create new coins with more difficult problems.

      4. You would need to be insane to consider Bitcoin to be any more than a ‘joke’ investment. This is a Vegas investment.

      Suggest you watch

      (suggest all Wolfstreet watch this)

      • Taco says:

        Oh brother, this is the mainstream misinformation that is causing so many issues with Bitcoin adoption…once again reality needs to be told.

        “1. All transactions are public -you must use Tor to engage in transactions. Every transaction ever done using the coins is logged and publicly availible.”

        – You don’t have to use TOR, coin mixing and other methods make tracking impossible if not just hard, if that what’s your after.

        “2. The transaction chain can be broken if you have a fast enough computer (it has already been done)”

        – Nope, not even close. No attack on the chain has been made, it’s just attacks on centralized servers…your ‘fast computer’ has yet to be discovered because it would have to made out of something other then matter and energy as we currently know it.

        “3. there are a limited number of bitcoins and the ‘fee’ miners get will vanish, although there are obviously ways to create new coins with more difficult problems. ”

        Not really, btc goes to 8 decimal places and could go even further, also the ‘fee’ is alive and well until at least 2140.

        “4. You would need to be insane to consider Bitcoin to be any more than a ‘joke’ investment. This is a Vegas investment.”

        Your opinion. It’s a bet on technology and creating something that has a set release schedule for next 100 years to plan against…unlike your fiat currency that is printed to infinity because some central bank wants it.

        Sigh, defending bitcoin becomes so tiresome against people like you…have you even read the white paper?

    • Petunia says:

      The bitcoin public ledger is a joke. Every transaction is logged but when your bitcoins are stolen, no one can find them. Really?

      The banks are investing in the public ledger technology because transactions are not reversible. When you get hacked the bank can claim it is a no recourse transaction. You will never see your money again. Good luck using that system.

      • Taco says:

        Oh boy, here we go again…it’s comical to hear finance people bash technology because they don’t understand something like private key cryptography that has been around for 40+ years…let alone the mashup of tech that bitcoin is. There is so much wrong with your statements I don’t know where to begin. Let’s just go with that the beauty of bitcoin is that is irreversible…it’s honest and true…unlike a bank that can pick and choose who it works with and why. Take paypal’s willy nilly decisions on who gets to play and who doesn’t. The point of btc is to be your own bank and not let them have your keys, that way you have 100% control over your money instead of lending it to a fractional reserve bank that doesn’t physically have your money. You think your FDIC insured bank will have your money when there is a bank run? Good luck using YOUR system.

        • d says:

          Oh boy here we go again another claiming fud is being spread by those who fear computers and simply dont understand.

          We do understand, if computers are involved transactions can be: intercepted, diverted, observed, and accounts stripped.

          There is no such thing as an unbreakable/unbeatable encryption, if you throw enough money and computer power at it.

          Man and computer wrote it, man and computer can break it.

          Before we discuss the very well perfected Israel EMP weapon system.

          Remember without those Jews and the US army, there would be no internet, or GPS.

  3. Chicken says:

    Finally I understand the concern, thanks for the explanation.

  4. Vespa P200E says:

    From Book of Revelation 13:16 and 17 NIV:

    “It also forced all people, great and small, rich and poor, free and slave, to receive a mark on their right hands or on their foreheads, so that they could not buy or sell unless they had the mark, which is the name of the beast or the number of its name.”

    Global elitist and politicians under order from their bankster handlers don’t want cash especially as NIRP is around the corner to prevent people from holding onto cash given NIRP. Besides they want to create money on a whim (not even bother printing) and watch over all of the financial transactions and for the sovereign governments go after underground tax economies and tax evasion and protect our identity – called CONTROL. Heck next up might be confiscation of gold – folks it has happened everywhere during WWII for metals.

    Sooner than we think cash will go capoot and we will be forced to have some kind of marking like invisible ink with RFID (already exists) in order to buy and sell as prophesized over 2000 yrs ago.

    I shudder to think what kind of life my teenage daughters will live thru…

  5. Vespa P200E says:

    Typical liberal progressive antics…

    Get rid of cash to go after bad guys and get rid of guns to prevent murders when guns don’t kill but people do and not to mention that criminals will get hold of guns somehow. So much for PC challenging the 1st amendment and gun control challenging the 2nd amendment (to prevent tyranny) this country was founded on…

    Besides what will the Fed and for that matter global CB cabals do when there probably isn’t enough cash on hand since most money are digital in nature and IF folks demand cash in NIRP world? I guess one way to prevent bank runs or something.

    And the fact that the banksters favor this means raw deal for the 99%.

    • polecat says:

      I see nothing but crocodile tears for the plebes from the so-called conservatives in the republican party…..otherwise your comment holds true.

  6. Jakey Stephenson says:

    Inflation and taxation is the biggest destruction of any economy and personal finances.

    It does not matter what they say they are the creators of economic problems. This is why they first issued paper currency. It is to measure and control the world.

  7. Jonathan says:

    Remember when gun sales spiked when Obama wanted stricter gun control? Looks like some bankster high in the clouds really didn’t think this through. They can cry “cash is useless because it’s only a tiny of money out there” all they want but the fact is cash is vital and inseperable for 99% of people especially outside the U.S.

  8. Vernon Hamilton says:

    With the state of banks in many countries being what it is, it is ludicrous to suggest that banning cash would in any way hinder crime, indeed, in some instances, banks are accomplices in serious crime.
    It just shows what big brass balls those banksters have that they can law enforcement is their rationale for wanting to end cash.

    • Dead at 18, Buried at 65. says:

      Unfortunately, you are horribly correct in your assertion. Even though these bankers cry foul on cash transactions citing the need to curb criminality, they are the ones who are perpetrating the very things they accuse the public of, however, on a much larger scale.

      The United Nations explicitly and publicly exposed the criminality of the world banks in a 2010 report. And since that time all of the major banks have been prosecuted for crime after crime after crime.

      When bankers are making public the “war on cash”, what they are really doing is stating and paraphrasing the following: –

      1. We want to prevent bank runs.
      2. If we need to we can seize up to 99% of your financial assets.
      3. You are an unsecured “creditor” and “investor” in our banks. – (No longer a depositor).
      4. We can penalise and freeze your account without warrant or any legal due process.
      5. You have no choice but to accept our unrestricted tyranny!
      6. …Oops! – We are broke!!!

    • just says:

      ALWAYS, ALWAYS, ALWAYS, remember the axiom of govt and their hirelings:

      “The more noble the language, the more nefarious the legal instrument.”

      This is a pure example. If people in the USA and the UK would just start using cash, this BS would all stop.

  9. Gil Obrero says:

    Cash in my accounts are at all tome lows, I mean just enough to cover payments due during the week.
    I drip feed cash into the account knowing it will be gone in days.
    And I rip cash out if a payment comes in.

    I encourage everyone else to do the same.
    You earn nothing on cash in a bank except risk.

    This will backfire, people will hoard ever more cash.

    • Baboo says:

      Where do you conceal your surplus cash?

      • Markar says:

        If he told you he’d have to kill you!

        • RD Blakeslee says:

          This highlights the problem with holding a valuable fungible asset on private premises – you have to hide or defend it.

          Defending it will involve a subordinate problem: how much violence and where does it lead?

          Hiding it requires secrecy – if anyone knows you have it, you are vulnerable to coercion.

  10. jan frank says:

    Get rid of cash – get rid of crime. Hah! So instead of putting bundles of €100 or $100 notes in a brown envelope, I pass on 100 gr. of 18 ct. gold (or whatever) wrapped in plain brown paper.

    The real purpose of making all cash transactions electronic is not to stop crime but to stop the hidden or grey economy. Pure electronic cash won’t stop the big fish, but it will sure make life difficult for all the little fish.

  11. Nicko says:

    I think you guys are severely underestimating the power of digital cash. In emerging markets, the key to increasing taxation and reducing corruption has been the adoption of cashless pay systems. Digital payments are traceable, corruption at all levels is reduced drastically.

    My problem are the incremental payments on such transactions (and the potential monopolies created), but in theory, I see no problem with the transition toward a cashless society.

    That said, I’ll be keeping my offshore accounts safe. :D

  12. Dan Romig says:

    “… antiquated and so very analog.”

    Oh, sorry I’ve got to go and flip the album on my turntable.

    Some things analog are superior to digital! I use cash for ALL my retail purchases, and haven’t had any debt for a decade. I reckon I’ll keep it that way; thank you Big Brother.

  13. d says:

    Nothing more prudish, intrusive, dictatorial, and pious, than a retired, lonely, unwanted, old street walker.

    Sands is no different.

    Ban cash, the people will replace it before you have finished banning it, and the Tax take will plunge.

    Then what will the taxers do ??

    More than 1 country will only take old notes through the CB, with full ID.

    Look for more of this in the future.

  14. CENTURION says:

    It gives those families that own/control the Banks/Central Banks complete control over…YOU.

    They will “know” every dime you make and can tax you so effectively, and that is what it is all about. The records of your purchases can, and WILL, be used against you.

    Want to run for office but have records of frequent Vodka purchases? Went to Vegas too many times? YOU won’t run for office.

    But, it will happen.

    • PrototypeGirl1 says:

      Have high blood pressure or diabetes, try to buy a cheeseburger DENIED comes on the screen and later they send someone for your guns cause you must be crazy.

    • Bill Bones says:

      Ok, perhaps being a frequent Vegas vodka swilling drunk is what DOSE get you in office!

  15. chris hauser says:

    in godfather III, michael corleone laments that the higher he goes in the world, the worse the people are he deals with…… ah, never mind.

    ah, bankers and getting religion, moneychangers in the temple.

    i was reading judges this morning, perhaps will continue tonight.

  16. albert says:

    ALWAYS use cash …. leave the palstic for emergencies ONLY.

  17. Phil says:

    I have been worried of the effects of a deliberate (as in cyber terrorism) or natural (Carrington type solar event) happening that messes up our electronic banking system for weeks, months or longer. It would be a huge disaster, but can you envision it happening in a cashless economy!

  18. Julian the Apostate says:

    Thanks Dan I needed a laugh. I recently took a trip across country in my car (everything on the truck is run through the fuel card) and had a devil of a time using cash. Every station wants you to pre-pay no matter the time of day. Then you have to go back in to finish the transaction. I found exactly one station in Nevada in the middle of nowhere that still let me pump and pay, still using mechanical, er, ANALOG pumps. I won’t name the town LOL I don’t want to bring the regulators down on them. Curiouser and curiouser.

  19. Brian Richards says:

    I think the abolition of cash, as the ultimate wet dream of the bankers and governments is going to be moot. Obviously our entire financial system is in the slow process of imploding, and I am guessing we are quickly headed towards, major monetary reform, that would normally accompany a nice, overdue major depression. It’s much like France in 1789. I doubt that, after the dust settles, there will be much talk of “mandatory digital currencies”, nor NIRP, by the way. Probably most of the upper crust will have been drawn and quartered, and the ones left, grateful for being allowed to live. Don’t feed the beast (not in the Biblical sense of that word)! Legally, as best as possible, pay as little to Caesar as is necessary. It’s the best protest, and you avoid the tear gas.

  20. Wilbur says:

    As I was paying on a credit card debt with cash at Chase Bank the other day, the teller told me that starting in March, all cash payments will have to be accompanied by a form of ID. I asked why and she said to prevent money laundering. I replied that I doubt that much money laundering goes on in $100. payments. She said, ” Oh that’s how they do it, going around to many banks making small deposits” -right

    • nhz says:

      15 years ago a financially clever friend told me: some day alarm bells will ring when you try to pay cash in the supermarket. We are getting very close.
      But maybe they will first try a 2-5% ‘anti-terrorist’ surcharge on all cash payments, or increase all prices and give healthy discounts to customers with an AMZN, FB, AAPL or other NSA-approved credit card.

      • d says:

        Then watch the night market street vendors Boom. Like they do in every third world economy.

        Where the Street vendors, all eat well, own their own houses, and send their children to good private schools, but pay no tax.

  21. Kevin Beck says:

    This plan of the Global Elites is nothing more than a way to make sure that governments the world over are able to set up systems whereby every transaction will both be traced and taxed. But it may have unintended consequences.

    For myself, I am making every effort to get as much of my money out of the banking system before this disaster strikes. I am converting all my savings out of currency units and into precious metals. The second thing I am doing is taking possession of all my stock certificates, and transferring them out of street name and into entities controlled by me directly. Then when the SHTF, I will have enough of my savings in gold/silver/platinum that I will be able to keep this stockpiled. Afterward, on a regular basis, I will continue to accumulate this as my savings. The only funds I will consider retaining in bank funds will be regular income that I need to cover expenses.

    I’m not necessarily advocating this for everyone, but am just stating my plans for consideration.

    • steve says:

      Who do you plan on trading your precious metals with?

      The brain dead people don’t care about your gold and silver especially when they are starving with their last loaf of bread.

      Bartering coins sounds good,but today’s mentality,nobody cares about coins and you can’t eat them when your starving.

      Invest in Food,water and things you can actually use

  22. nhz says:

    In the Netherlands these policies are pushed not just by the bankers, but first of all by socialist (Labour) and pro-EU politicians. They want to abolish 500 and 200 euro bills (for a start …) officially to ‘fight crime’ but in reality because it makes it much easier to get their hands on other peoples money and tax it away.

    Netherlands has a 1.2% yearly tax on savings accounts, next year close to 2% if you have over 100K in your account. The tax is already way aboven the interest rate but they want to increase it even more; with surging numbers of migrants / labour voters entering the country they need someone to pay for all the free-benefits-for-life.

    Btw, the bankers still need a good incentive to keep people from converting their savings to gold. The spike of the last weeks didn’t really help, maybe they can organize an epic gold downsurge to teach people that gold is not a safe store of value? (after all, that’s what Friday afternoon was used for, traditionally)

  23. overtheedge says:

    Though Dead at 18 posted several reasons why the banking and government sectors wanted to eliminate cash, the primary reason is:
    #1. Reduce/eliminate the bank run.

    Fractional reserve banking only holds a limited amount of cash/cash equivalent reserves; often no more than 3% at best.
    The bank assets are NOT cash, but rather tangibles used as collateral.
    Collateral is already marked to model and when these assets are foreclosed on, the market re-prices them to what the buyer will actually pay.
    Then these banks hold excess reserves at one of the Fed branches in the form of electronic money, no cash.
    The reason there is rarely mention of the amount of money a bank robber steals is due to the pitiful amount of cash actually on hand at the bank.
    Were the people to figure out that there is no cash to withdraw, they would they would stage a run and in doing so, expose the banker’s underbelly.

    Of course the bankers have a few secret weapons already on hand, but those weapons are nuclear to the misplace confidence held by the customers.
    1. Already in use is the requirements for advance notice before large withdrawals.
    2. As most depositors also carry a substantial debt load, the big gun is the clause in every loan contract: “Due and payable on demand.”
    This means that if you attempt a large withdrawal and you may be faced with demand that the loans be paid off.y few have the capital assets to pay off the debt load they carry.

    This is why anyone carrying non-productive debt is seriously exposed to their meager deposits being seized by the banks.

    Debt is slavery. Nobody needed that large house. Nobody needed that plethora of consumer goods and nobody needed that new car. They chose to borrow long on what has become short-term employment.

    The level of cash in the system is far short of being enough to settle debts.
    Supposedly there is roughly $1.2 trillion is USA cash printed.
    About half of that is held overseas.
    The admitted to USA government debt is north of $18 trillion.
    Now add in consumer debt.
    Don’t forget corporate debt.

    Even a modest bank run would erode what little confidence the people have in the banking system. Collapse would be the outcome leading to violent anarchy.
    This would result in destruction of infrastructure when there is NO money to repair or replace said infrastructure. This is why companies rarely rebuild in areas that had riots. That the rioters destroyed infrastructure is absolute proof that they are willing to do it again and again. Never throw good money after bad especially when it is borrowed money.

    Just watch what is going to happen when the redemptions the Mutuals and ETF face really start to unwind. Those redemptions will be electronic money and the number of greater fools will decline to zero. An asset’s true value will only be exposed once the money changes hands.

    Now as to why the government is looking at eliminating cash is quite simple. Money is borrowed into existence through the banking sector. If the banks fail, Treasuries can’t be sold. This leaves electronic money printing without an accompanying note as the only option. BUT there will be no banks to launder the pure fiat. System collapses.

    What economic system was shall be again. Thousands of years of serfdom will be manifest again. It already exists, but few can see what is under the paint job.

    Old money will continue to exist. Old money defined as generational assets that the owners invested in productive assets and tangibles that retain value even under the most extreme economic conditions. Food producing properties rank foremost.

    Only anecdotes; I remember my mother filling a grocery cart for less than $20 USD. That $20 doesn’t fill a grocery bag now. My mother’s two bedroom ranch style house was purchased for $2700 USD in 1956. The estate valued it at $275,000 when it was transferred to my step-sister in 2000 and it needed substantial repairs. The real irony is the concrete front porch couldn’t be replaced for $2700USD.

    Once you eliminate the value of the cash, all that remains is final elimination of the cash. Coming to a theater of operations near you sooner than you think.

    The real irony is that once cash in the system is further reduced, turning off the ATMs and stopping electronic transfers will drive most of the cash into the banks. Vendors will be forced to deposit cash to satisfy their debt payments.

    Perhaps many readers didn’t get the memo. Or I’m just another crackpot. Far too soon the world will know which.
    What’s in your wallet?

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