Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Pre-COVID US Economy Wasn’t All That Great Either - 4th Dec 20
Bitcoin Breath Taking Surge - Crypto Trading Event - 4th Dec 20
Platinum Begins A New Rally – Gold & Silver Will Follow - 4th Dec 20
Don't Let the Silver (and Gold) Bull Shake You Off! - 4th Dec 20
Stronger Risk Appetite Sends Gold below $1,800 - 4th Dec 20
A new “miracle compound” is set to take over the biotech market - 4th Dec 20
Eiro-group Review –The power of trading education - 4th Dec 20
Early Investors set to win big as FDA fast-tracks this ancient medicine - 3rd Dec 20
New PC System Switch On, Where's Windows 10 Licence Key? Overclockers UK OEM Review (5) - 3rd Dec 20
Poundland Budget Christmas Decorations Shopping 2020 to Beat the Corona Economic Depression - 3rd Dec 20
What is the right type of insurance for you, and how do you find it? - 3rd Dec 20
What Are the 3 Stocks That Will Benefit from Covid-19? - 3rd Dec 20
Gold & the USDX: Correlations - 2nd Dec 20
How An Ancient Medicine Is Taking On The $16 Trillion Pharmaceutical Industry - 2nd Dec 20
Amazon Black Friday vs Prime Day vs Cyber Monday, Which are Real or Fake Sales - 1st Dec 20
The No.1 Biotech Stock for 2021 - 1st Dec 20
Stocks Bears Last Chance Before Market Rally To SPX 4200 In 2021 - 1st Dec 20
Globalists Poised for a “Great Reset” – Any Role for Gold? - 1st Dec 20
How to Get FREE REAL Christmas Tree 2020! Easy DIY Money Saving - 1st Dec 20
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
BLOCKCHAIN INVESTMENT PRIMER - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

The Escalating War on Cash and What It Means For Metals

Commodities / War on Cash Feb 23, 2016 - 07:32 AM GMT

By: MoneyMetals

Commodities

Clint Siegner writes: Government bureaucrats, central bankers, and Wall Street executives all have their own reasons for hating the cash in your wallet. So, no surprise, they are working closely together to rid you of it.

The war on cash is intensifying and bullion investors are wondering what the transition to a "cashless society" might mean. We'll cover that, but let's first recap why these organizations are, once again, allied together to the detriment of your ability to transact privately.


The self-interest of bureaucrats is one factor. They don't like privacy. They dream of the day when they can access all of your spending with just a few keystrokes. The knowledge will help them more aggressively tax and regulate.

Central bankers want something a bit different. The policy du jour among these central planners is NIRP – negative interest rate policy.

Bankers in Switzerland, Sweden, Denmark, and Japan have already launched NIRP. Their counterparts elsewhere, including the U.S., are planning for it.

The challenge is to create an environment where customers must either spend their savings or pay their bank interest to hold deposits. To succeed, the government must corral citizens into purely electronic money. Otherwise many will simply withdraw cash and hide it under a mattress. When you have to pay a bank to borrow your money, holding physical cash gives you a higher yield, i.e. 0% interest is a higher yield than negative 1%!

Bank executives are licking their chops at the potential for all transactions to be done electronically. They stand to rake in processing fees every time you use your card or cell phone to make purchases rather than using cash. Plus, they will gather a larger deposit base as customers no longer have the option of holding paper money outside the banking system.

People need to keep these motivations firmly in mind, because politicians and bankers aren't going to be honest about why they want to eliminate cash. Wall Street wants you to focus instead on the convenience of electronic payments. And bureaucrats are busy stigmatizing cash as a tool for drug dealers, tax cheats, and terrorists.

Perhaps Americans will see through the propaganda and recognize just how dangerous a cashless society would be to their wealth and privacy. They might decide to punish banks such as JPMorgan Chase for no longer accepting cash payments on loans and insisting customers not put cash in their safe deposit boxes. They may ask their elected representatives to oppose any measure to eliminate paper bills.

However, most Americans aren't paying much attention to the issue. Congress is barely accountable, and the Federal Reserve isn't accountable at all. A restriction on cash could indeed be imminent. That's certainly the goal of the "Better Than Cash Alliance".

If citizens ultimately lose the War on Cash, here are some likely ramifications for precious metals investors.

Negative rates should drive significant demand for gold and silver. NIRP is a testament to the fact that central bankers will try literally anything to produce inflation. Such an extraordinary policy should set off alarm bells for anyone who isn't concerned about inflation, or is betting on deflation. If central bankers want inflation, they have the power to create it. As always, inflation fears will drive demand for physical bullion.

The good news is that while bureaucrats can theoretically win the War on Cash because they have complete control over the issuance of paper money, they cannot win a war on bullion. Metals don't roll off a printing press that can simply be switched off. Physical bullion is private and off-the-grid – a nightmare for regulators.

If they attempt taxes and regulation, they will fall victim to the law of unintended consequences. But that may not stop them from trying. It's happened before – most recently in India. Indian officials dramatically hiked the tariff on imported gold in 2013 They accomplished little more than angering a gold-loving population and driving an eight-fold increase in gold smuggling.

Politicians and their friends in banking aren't going to stamp out peoples' desire, or their ability, to transact privately using barter instruments such as gold and silver coins. And they aren't going to force unwilling people to stand idly by as they take shears to savers; bank accounts. The push to eliminate cash will inevitably push people into cash alternatives including physical precious metals.

By Clint Siegner

MoneyMetals.com

Clint Siegner is a Director at Money Metals Exchange, perhaps the nation's fastest-growing dealer of low-premium precious metals coins, rounds, and bars. Siegner, a graduate of Linfield College in Oregon, puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals' brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

© 2016 Clint Siegner - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules