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It's Time To Kill the $100 Bill, Says Larry Summers 558

HughPickens.com writes: The NYT has an interesting editorial on why getting rid of big bills will make it harder for criminals to do business and make it easier for law enforcement to detect illicit activity. That's why officials in Europe and elsewhere are proposing to end the printing of high-denomination bills. According to a recent paper from Harvard's John F. Kennedy School of Government, a stack of 500-euro notes worth $1 million weighs just five pounds and can be carried in a small bag, whereas a pile of $20 bills worth $1 million would weigh 110 pounds and would be much more difficult to move around. Lawrence Summers, the former Treasury secretary and former adviser to President Obama, has argued that the United States should get rid of the $100 bill. "The fact that in certain circles the 500 euro note is known as the "Bin Laden" confirms the arguments against it," says Sanders. "Technology is obviating whatever need there may ever have been for high denomination notes in legal commerce."

Critics who oppose such changes say the big bills make it easier for people to keep their savings in cash, especially in countries with negative interest rates. Some people also prefer not to conduct transactions electronically because they fear security breaches. According to Sanders the idea of removing existing notes is a step too far but a moratorium on printing new high denomination notes would make the world a better place. "The United States stopped distributing $500, $1,000, $5,000 and $10,000 bills in 1969," concludes the NYT editorial. "There are now so many ways to pay for things, and eliminating big bills should create few problems."
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It's Time To Kill the $100 Bill, Says Larry Summers

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  • Sanders who? (Score:5, Informative)

    by damn_registrars ( 1103043 ) <damn.registrars@gmail.com> on Tuesday February 23, 2016 @08:58AM (#51565909) Homepage Journal
    The summary here cites someone named "Sanders" but there is no sanders in the WashPo article. There is someone in there named Sands (note no "er" in the name) but nobody named Sanders.
    • Perhaps they were going to Bern the c-notes once they're banned?

      We get this proposal to limit some of the freedom of cash transactions, but we can't agree to give up the penny....

      • Pennies stop terrorism. Do you know how much $1million in pennies weighs? Surprised that wasn't in TFA.
    • Sanders, Summers, same thing.

  • Not sure I trust it. (Score:5, Interesting)

    by AbRASiON ( 589899 ) * on Tuesday February 23, 2016 @09:03AM (#51565941) Journal

    The critics are increasing on this one, there's a lot of paranoia about ending physical currency, negative interest rates, bank bail ins, etc.
    I generally tend to be partially susceptible to a good / interesting conspiracy theories, within reason. With this one, I'm starting to see it crop up though from a fairly significant amount of financial market doomsayers, although some of them seem to have reasonable credentials.
    http://davidstockmanscontracorner.com/ [davidstock...corner.com] for example
    https://en.wikipedia.org/wiki/David_Stockman [wikipedia.org]

    I don't know what to think personally. I certainly feel, based on a few years of reading some of this looney news, watching some of the youtube videos on how 'money is created' essentially, the printing since 08 of money and generally how finance is handled internationally that the whole world has no fucking clue of what's going on.

    APPARENTLY the G20 meetings recently approved significantly more bank bail ins in many more countries, mine included.
    These are quite serious concerns, example a recent pensioner suicide, due to the banks / govt, effectively STEALING this poor bastards money, it's outright theft.
    http://www.bbc.com/news/world-europe-35062239 [bbc.com]

    Honestly at this rate some of the "new world order, new currency for ALL!" stuff is ... almost, ALMOST sounding fucking feasible. I'm willing to swallow a bit of the old conspiracy theory bullshit but as more and more evidence piles up, I'm begging to feel like it's time to buy a shitload of gold, silver and ammunition.

    Well regardless of your thoughts on this post, how it's moderated, it's not going to change much - there's little, exceedingly little we can do if there's merit to any of this. So scaremongering aside that's the real concern, we simply don't have power as people in general.

    NOTE / Disclaimer: Australian here, who DIDN'T buy into the ridiculous bubble housing market here, out of work now and living off cash saved, if that shit gets 'confiscated' there will be trouble.
    I sure as heck do not need my savings, that I worked hard for, I scrimped for, I didn't go into debt for like most else, being confiscated / overly taxed or NIRP'd into oblivion. Disgusting concept.
    https://www.google.com.au/search?q=NIRP&hl=en&meta=&gws_rd=ssl [google.com.au] (NIRP)

    • What exactly is a negative interest rate?

      Are there banks that *seriously* expect the customer to pay them money to keep their money for them....?

      • by Ark42 ( 522144 ) <slashdot@morpheussoftwa r e . n et> on Tuesday February 23, 2016 @09:12AM (#51566015) Homepage

        It's basically bigger banks or the central government charging smaller banks to keep their money. The idea is to encourage lending and spur the economy. No personal checking/savings account has negative interest that I've heard of (yet?).

        http://www.nytimes.com/2016/01... [nytimes.com] - Japan this year

      • by jcr ( 53032 ) <{moc.cam} {ta} {rcj}> on Tuesday February 23, 2016 @09:14AM (#51566031) Journal

        What exactly is a negative interest rate?

        It's a euphemism for theft of your money by a bank.

        -jcr

        • Negative rates are nothing new. Banks have been doing this, but instead of "interest" they call it "fees". For any smallish balance, you've been getting a negative rate for a long time now.

          This is reasonable in a way. I am happy (more or less) to pay a small fee so that I don't have to carry my savings around in a wheel barrow. The bank provides safety and convenience. The value of this service is proportional to the amount, so it's fair to charge a negative interest rate -- as long as it's small.

          • by AbRASiON ( 589899 ) * on Tuesday February 23, 2016 @09:53AM (#51566321) Journal

            A .5% negative interest rate right now would cost me $1000 a year.
            Meanwhile some sack of pig shit who purchased 11 homes in Australia speculating on "ever increasing house prices, indefinitely and rapidly"* would actually be sent a cheque each fucking month as a reward for going into debt
            God.Damned.Madness

            * They would ALSO be getting tax back from the government due to one of the most insane taxation / financial policies of all times, designed PURELY to reward those with 'spare money' and punishing those without
            https://en.wikipedia.org/wiki/Negative_gearing [wikipedia.org]

            Those who saved money, responsibly are being EXCEEDINGLY punished in the West over the last couple of decades.

            NOTE: I realise it's not your policy and some VERY small bank fees are ..... somewhat reasonable, but anything as a % of the persons money is a goddamn disgrace.

            • by borcharc ( 56372 ) *

              The trouble is that it won't stop at 0.50%, when that doesn't work it will be 1% and so on and so on.

          • Negative rates are nothing new. Banks have been doing this, but instead of "interest" they call it "fees". For any smallish balance, you've been getting a negative rate for a long time now.

            Err...don't they offer "free checking" where you live?

            I pretty much refuse to pay for my own money. I only do free checking, some actually pay small interest on my checking accounts...and I refuse to hit an ATM that charges a fee...unless it is an emergency. I just go to my own banks' ATMs, as that there are plenty of t

      • by Anonymous Coward

        Individuals don't get b charged. Banks get charged for hoarding and not lending

        • by moeinvt ( 851793 )

          That's true NOW. How long until this insanity filters down to the retail depositor?

          WSJ ran an article a few days ago which reported that the sale of safes and lock boxes in Japan has skyrocketed. The Japanese obviously expect the BoJ's negative interest rate policy to eventually affect the commercial banking sector. That's why the bankers must pursue a "War on Cash".

          If banks are "hoarding" it's only because the economy is totally saturated with debt. Pushing lending in this environment only means accept

        • by SysKoll ( 48967 )

          Who says individuals don't get charged? That's the whole point of negative-interest rate policies. Bank accounts above a certain amount are already charged negative interest in Switzerland, for example.

          As for Japan, there is currently a quiet run on banks due to negative interest. Japanese people hoard cash and buy safes.

          Of course it will backfire. People will have to save more fore retirement since they cannot count on positive interest to produce gains. Hence consumption and growth will decrease further.

          T

      • I'd give you the LMGTFY link, but I'm sure you can do that for yourself. Yes, it's exactly what you think, and yes it's happening. Japan's central bank (Bank of Japan) adopted negative rates last month. There's been a few European banks that did the same thing over the last 5 years or so.

      • by rmdingler ( 1955220 ) on Tuesday February 23, 2016 @09:16AM (#51566047) Journal
        Sure. [investopedia.com]

        During deflationary periods, people tend to hoard their money. This gives the hoarding populace an incentive to spend, thus helping the economy out of the deflationary spiral.

      • by AbRASiON ( 589899 ) * on Tuesday February 23, 2016 @09:19AM (#51566067) Journal

        *YES*
        Exactly @#%ing that.
        You are "charged" (taxed) for leaving your money with them. The idea is to force you to spend it (helping the economy) either through frivolous bullshit or investing in a business / house / something.
        I am not joking, Japan just did this.
        You literally lose money.

        THEREFORE: everyone tries to take their money, in cash form out of the bank, hide it in the mattress, THAT's why they ban large denominations, because 100k under the bed in 100s is much easier than 100k under the bed in 50's

        Greece or Cyprus did this recently, the article I read was not clear but it was so alarmingly written you would almost think that the $100 notes were not only no longer being printed for circulation but existing notes would be null and void after X date (I do not know if this is the case but if so, HOLY SHIT........... that's.... exceptionally evil)
        Again, I restate, I don't have the data on that last paragraph so if anyone could clarify I'd appreciate the information.

        But long story short, yes the bank STEALS your money for leaving it with them to 'promote growth"......... (anyone brought up with the discipline to save by good, honest parents / guardians has been getting fucked for the past 20 years, myself included)

        • Re: (Score:2, Insightful)

          by Anonymous Coward

          That is what central banks have been doing forever, with inflation. Now they are just getting bolder laughing at the peasants.

          • by AbRASiON ( 589899 ) * on Tuesday February 23, 2016 @09:57AM (#51566371) Journal

            This cynical yet short response is sadly very correct and should be moderated up.

            If I had $100,000 AUD in a bank here 10 years ago and I collected the interest on it, compounded and never touched the money, the remaining figure of money (I dunno, $120k? shrug) would have _LESS_ buying power than it initially did, 10 years ago.

            We ARE being screwed by inflation, (money printing) and general price rises in things. The financial system is messy and few people can see this.
            NOTE: we had / have fairly high interest rates here in Australia, in the US, Japan, my understanding is the interest rates are significantly lower, $100,000 US 10 years ago would have increased less than my Aussie $100k and it too would have less buying power than it did 10 years ago.

            You either buy into / speculate on the latest bubble / fad which is returning silly profits or you're boned.
            The gold and silver hoarders are starting to not sound so crazy.

      • by JaredOfEuropa ( 526365 ) on Tuesday February 23, 2016 @09:19AM (#51566071) Journal
        Yes there are banks out there that expect that. And by the same token, there are apparently a few banks that now have negative mortgage interst rates as well. In Denmark there are some people who receive money from the bank every month as interest on their mortgage.
      • What exactly is a negative interest rate?

        Are there banks that *seriously* expect the customer to pay them money to keep their money for them....?

        There are LOTS of banks that demand customers pay them money to keep their money for them. They're called "fees" and they mostly apply to people who are too poor.

        A negative interest rate is an interest rate below zero. Most frequently this comes up in lending policy, when a country's central bank decides to stimulate the economy by letting banks borrow and receive some amount of interest for borrowing. That means there's no real advantage to an institution in holding cash, so yes, they may pass on a nega

      • by Alumoi ( 1321661 )

        Don't know about banks in your country, but in mine the interest rate is below real inflation + bank fees.

        • That's exactly how it is here and we have some of the higher interest rates around. I've only just noticed it too, I was a fool and didn't research, my own fault.
          I should've put it into the bubble like everyone else sadly.

    • Australian here, who DIDN'T buy into the ridiculous bubble housing market here

      Yes we did. Rudd kept the bubble going during the crisis with his first home owner boost, plus the interest payments got more affordable with the downturn. Just when it looked like it might be popping.

      Our debt fueled housing bubble will burst eventually.

      • I waited and I waited and I saved and I saved and I saved, quite a god damn reasonable amount too but still the prices got away from me. They are unsustainably high.
        I recommend watching this video and reading this guys tweets, he predicted Ireland, Spain, US etc.
        https://twitter.com/jtepper2/status/701767213531971584 [twitter.com]

        The video is a doozy.
        Turnbull is going to get railroaded if he thinks supporting the 20% of home investors is the smart bet, the average person is sick of being unable to buy a fucking home.
        Let

    • The bit that is most telling about this is the justification- curb crime, as if there are some massive crime waves wrecking the economy (well, other than what the banks have already done).

      And even then, it is purely speculative. They made the same arguments with bitcoin, which is like the polar opposite of cash, so which is it? I get the sense it is just so much smoke being blown so the riots won't be quite so bad when they do implement it.

      If anything, I would see a push for larger denominations, as inflati

    • by monkeyxpress ( 4016725 ) on Tuesday February 23, 2016 @11:00AM (#51566891)

      I don't think there is any conspiracy going on. It is just that the central banks cannot do anything other than manipulate interest rates to attempt to stimulate the economy. So if there is another crash with interest rates already at zero, what do they do? Perhaps they will sit by and let the whole thing collapse, hoping that the bottom is reached before people turn up in the streets with pitchforks. However, ask yourself this - who is most likely to want to turn the system on its head: a bunch of people with zero asset, and now no job, house, hopes, or ability to feed their families? Or a bunch of middle class savers who are pissed off that their savings are being raided by the central bank? The reality is that savers have skin in the game, so will complain bitterly but get on with it. Those who have nothing might just decide the game needs changing by any means necessary if nothing is done for them.

      Personally I don't think there are any simple ways out of our present mess. A lot of stuff has been proposed: UBI, people's QE, central bank infrastructure funding. However all of them have potential problems either from a practical point of view, or politically. In the end it may be that just continuing to beat the economy with interest rates is all that central banks can do until we can see how things like UBI experiments and the AI jobs armageddon work out. I mean, the reality is that if you were paying 10% on cash trapped in your account, you would more than likely just go out each week and spend all your money, even if you don't really want anything you are buying. The stimulatory effects of this occurring in aggregate should not be underestimated. Of course the massive asset bubble and the destruction of the planet from rampant zombie consumerism will likely catch up with us eventually, but I guess Yellen and Carney figure they will be long retired by then.

  • by homb ( 82455 )

    There's a difference between 500 Euros and 100 Dollars. About 5x difference. Imagine getting rid of everything above 20 Euros. Wouldn't fly at all.

    Also, more than once I've been to restaurants where the smartcard readers weren't working. It still happens. So you'd need to carry a stack of 20 Euro bills just in case.

    And what about all those cash countries using USD for transactions, where the local currency is too much in flux to serve as anything other than toilet paper? They'd instantly switch to a currenc

    • by arth1 ( 260657 )

      There's a difference between 500 Euros and 100 Dollars. About 5x difference. Imagine getting rid of everything above 20 Euros. Wouldn't fly at all.

      Not only fly, but the take-off procedures are already well underway. Some European countries are planning a full abolition of physical money.

      Also, more than once I've been to restaurants where the smartcard readers weren't working. It still happens. So you'd need to carry a stack of 20 Euro bills just in case.

      No, you wouldn't. You'd pay with your phone, either through phone billing or by direct transfer (giro). Because the transfer systems uses universal routing and is bank-agnostic (except for in the UK, which clings to its old fashioned branch based accounts) and is payer based unlike the US payee based, anyone can pay anyone else in seconds, and there's no "hold" time

      • by homb ( 82455 )

        Not only fly, but the take-off procedures are already well underway. Some European countries are planning a full abolition of physical money.

        Completely unfeasible at this stage. They can plan all they want, but capital flights would be massive.

        Also, more than once I've been to restaurants where the smartcard readers weren't working. It still happens. So you'd need to carry a stack of 20 Euro bills just in case.

        No, you wouldn't. You'd pay with your phone, either through phone billing or by direct transfer (giro). Because the transfer systems uses universal routing and is bank-agnostic (except for in the UK, which clings to its old fashioned branch based accounts) and is payer based unlike the US payee based, anyone can pay anyone else in seconds, and there's no "hold" time.

        If all phone and internet services were down too, well, what would you do if a cash register was broken or you run out of change? It's not much different - you take people's names and addresses and send them a bill.

        Let's talk about this when transfer fees are zero, and p2p payments are as easy as p2m. That's what cash does for you.

        • by arth1 ( 260657 )

          Let's talk about this when transfer fees are zero, and p2p payments are as easy as p2m. That's what cash does for you.

          For most Europeans, that has been the case for a long time now. Payer initiated transfers are generally instantaneous, with the money being actually available for use by the recipient immediately too, and with no charges for personal use (except for cambio charges, printed receipts or other extra services).

          Truly, the banking system in most of Europe has been like Paypal (except far more instantaneous and cheaper) for years now. The giro system is about 50 years old, and improvements like unified account

      • If all phone and internet services were down too, well, what would you do if a cash register was broken or you run out of change?

        What? These two situations are not remotely analogous. If the register is broken, you use a calculator (perhaps your phone) and keep a manual register for the taxman on any old piece of paper you have handy. If you run out of change, you close the shop and go to the bank.

  • This... (Score:5, Interesting)

    by EmeraldBot ( 3513925 ) on Tuesday February 23, 2016 @09:08AM (#51565981)
    This would be a terrible idea. Bank fraud and laundering is still a pretty popular way to shuffle money around, even though it's riskier now than it used to be, and cash has no impact on that if it's all done electronically. Likewise, from what I've heard, many criminal enterprises will disguise money in physical property such as houses, or even run a legit business and shuffle the money into it. Even if this is (initially) aimed at larger bills, preserving the ability to use cash is an important part of our civil freedom because cash is still pretty much the only way to purchase something without being tracked. You also don't have to worry about people stealing your card and draining all of your life savings out of it, it can't fail because of a faulty magnetic reader, and it's much more convenient for smaller purchases. Larger bills are an easy way to spend money when you're on vacation, it serves a legitimate purpose, and I have trouble envisioning the mafia (or the yakuza) being unable to very easily adapt to this problem while we're all left out to dry.
  • by PolygamousRanchKid ( 1290638 ) on Tuesday February 23, 2016 @09:09AM (#51565985)

    In the coming Zombie Apocalypse, you can use those "$500, $1,000, $5,000 and $10,000 bills" to wipe your ass. I would not recommend using poison ivy or poison oak.

    The only things that will have value, will be canned goods, weapons and ammo. Maybe a bit of clean drinking water on the side.

    Hmmm Dinky Dee dog food for breakfast . . . yummy!

    • The only things that will have value, will be canned goods, weapons and ammo. Maybe a bit of clean drinking water on the side.

      And a good can opener, unless you plan to waste your ammo on your corned beef.

      • Can openers?

        Man, the northern hemisphere is backward. Down here cans have ring-pulls. It reminds me of the time I went to Europe and needed a corkscrew to open a bottle of wine or borrow someone's personal incendiary device, yes I can't believe people still smoke, to wrench the lid off a beer bottle.

    • I have said money should come in $1000 rolls of currency on soft paper. That way you know your money is at least worth a ....

  • Banksters (Score:2, Interesting)

    by Anonymous Coward

    They got together at Davos and agrees that eliminating cash was necessary to roll out negative interest rates. A zerohedge article said Europe could go as low as negative 4.5%. Why would you keep your money in a bank that steals 1/20th per year. It's criminal. Don't buy into this BS about preventing crime. They are trying to delay the day of reckoning where their bad banking practices and fraudulent derivatives blow sky high. #2008^2

  • by KermodeBear ( 738243 ) on Tuesday February 23, 2016 @09:12AM (#51566017) Homepage

    As far as I'm concerned the true motive is to force larger transactions to use electronic transfers, allowing the government to track more transactions.

    This is purely a push for more tracking. The government wants ALL your transactions to be electronic so that you cannot ever have a private monetary transaction.

    • by Anonymous Coward on Tuesday February 23, 2016 @09:27AM (#51566131)

      no cash also mean the government can confiscate all your a money with a push of a button

    • As far as I'm concerned the true motive is to force larger transactions to use electronic transfers, allowing the government to track more transactions.

      This is purely a push for more tracking. The government wants ALL your transactions to be electronic so that you cannot ever have a private monetary transaction.

      I think you are looking at the situation from one side -- anti-government. If you really think about it, big businesses or big transactions nowadays are done via electronic. Nobody is carrying a suitcase with tons of cash inside to pay off something unless there is something fishy about the transaction. And then, if you really think further, often times banks get transaction fees; besides, they do not need physical labor to count the money. Everything is in digital format. It is cheaper in a long run and ea

  • by argStyopa ( 232550 ) on Tuesday February 23, 2016 @09:15AM (#51566045) Journal

    Since you have campaigns for getting rid of the smallest currencies - the penny, the $1 bill - and now a campaign for getting rid of the largest, we should meet somewhere in the middle.
    My suggestion would be to have ONLY a single cash token, worth $37.61.

    In the first place, the odd amount would improve American numeracy; in the second, anything purchased below that, the change could be absorbed by the US government to offset the debt.
    It could be made of plastic harvested from the ocean, so we get the industrious folks who see the effort at bitcoin mining growing too ridiculous to turn their efforts toward a public good: cash mining from the seas, and the substance itself is intrinsically valueless, which is metaphorically representative of the US gov't generally.

    It's a win-win-win.

  • by Orgasmatron ( 8103 ) on Tuesday February 23, 2016 @09:17AM (#51566053)

    The $100 bill is already dead. You can hardly buy 6 real dollars (1oz silver coins) with it.

  • Gifts (Score:4, Insightful)

    by jimbrooking ( 1909170 ) on Tuesday February 23, 2016 @09:19AM (#51566069)

    The $100 is ideal for gifts to grandkids (I have 7). Impressively rare to them, crisp, clean. Two $50s just wouldn't be the same!

    Get off my lawn, Summers!

  • I would agree with this if payments can be done faster and no cost for the customer.

    As handling cash money costs money as well, there should be no handling fees when I transfer money to anybody else. Even between different banks.
    And it should be instantaniously.

    I live in Belgium and I do not get charged when I transfer money.Transfering to a bank within the same money unit depends to what bank, but mostly this is free. rest the part where it needs to be faster.

    To business account it takes 3 working days. Th

    • Even if it does not cost you any money, the real costs are your privacy and the fact that you are ever more forced into the arms of the same institutions that create money basically out of fraud. The more money gets digital, the less it has to exist in the first place.
  • why in a country with negative interest rates the central bank would worry if people can't stuff their mattresses with large bills? It seems to me that if you're trying to avoid potential deflation you don't want people squirreling away their money in the banks or their mattresses.

  • Where I live, many times I try to spend a BRL $100 bill, the cashier person seems in trouble because of the awkwardness of providing change for so large a bill. It's the highest denomination, yet it is worth less than US $25. EUR $100 seems a bit too awkward, and I wonder why the EUR $500 exist anyway.
  • by Trachman ( 3499895 ) on Tuesday February 23, 2016 @09:34AM (#51566169) Journal

    It is about tighter control of the rest of population, not the criminals.

    All those who keep contemplating that it is so easy to carry 500 Euro notes, are also of the opinion that the value embodied in the paper bill represents time and efforts, savings, work and sweat, of the people who worked to get 500 Euros. Yet assholes such as Larry Summers consider all that money to be owned "by society" which is only temporarily in the hands of the "criminally minded" individual.

    Two hundred years ago farmers would have chased you out of the village with the pitchforks if you would try to pay with the pieces of paper. For several hundred years there was a statement on every paper note stating that every paper note is exchangeable to gold, no questions asked.

    Then there was WW1. Latin Monetary Union, established by Napoleon, has evaporated. Most of the promises pffft... and evaporated, except perhaps for Switzerland. Then, eventually, governments realized that many people are conditioned to accept paper money and it does not need to be backed with gold, and fiat currencies became widely used.

    When electronic money has been invented, it has been realized that the money no longer needs to be printed. However few problems have remained: paper money is still a relatively convenient way to make a payment as it is not heavy and semi-anonymous. Also, it has been realized when negative interest rates were introduced, simple $100 bill would effectively become and interest bearing interest. Introduction of negative interest rates would IMMEDIATELY cause massive cash hoarding by the people and the bank runs.

    Those who try to ban cash should be upfront with their thinking. They should state what they think:
          1. We, the government people, do not like cash because it allows anonymity.
          2. Anonymity allows people not to pay taxes
          3. Cash makes it harder to introduce negative interest rate.

    The hard cold reality is that 95% real tax evasion, crimes and corruption, measured at the dollar value and volume is not conducted in cash, and is mostly conducted by by the top 1% by corrupt politicians and their private sector partners.

    It is not about petty crime. It is about control of the common people

  • The War on Cash (Score:5, Insightful)

    by moeinvt ( 851793 ) on Tuesday February 23, 2016 @09:39AM (#51566201)

    When the globalist elite scumbags of the world recently met at the World Economic Forum in Davos, one of the decisions was apparently to begin a "War on Cash". Mario Draghi soon proposed eradication of the 500 Euro note and Summers is proposing an end to the 100 FRN. Central banks around the world have either implemented(Japan) or are entertaining the idea of negative interest rates. As of now, this only applies to deposits at central banks, but how long before this insanity filters down to the retail banking sector? i.e. rather than getting tiny positive interest on your bank deposits, you must PAY the bank to hold your funds. In order to prevent mass withdrawals and people hiding their money in the mattress, the banking cartel needs to outlaw cash.

    There is another more insidious reason for the War on Cash. When the bankers get into financial trouble, like in 2008 (and again in the very near future), they want deposits to be treated as just another liability that can be restructured in bankruptcy. It's called a bank "bail in" which forces depositors to take a "haircut" on deposits. It already happened in Portugal. Think it can't happen here? The Bank of England and FDIC published a paper in 2012 called "Resolving Globally Active, Systemically Important Financial Institutions". Under the proposed strategy, the losses of a bankrupt bank could be apportioned to "unsecured creditors"(depositors are the banks creditors). In exchange for your confiscated deposits, you would receive stock in a new holding company that has been "recapitalized" (with your money).

    Canada has also put forth a deposit confiscation proposal in the "Jobs, Growth and Long Term Prosperity: Economic Action Plan 2013". The plan states (in part) that an insolvent financial institution(a TBTF one)

    "...can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital."

    The "certain bank liabilities" meaning the customers' deposits of course.

    The "War on Cash" has very little to do with stopping illicit activity. The government and their masters in the banking cartel want control of all your liquid assets. That way they can skim a little more of your hard-earned wealth(negative interest) and confiscate what you have in the event of some TBTF bank getting in trouble. Also nice for them because they could record even more of your financial transactions and lock you out of the economy if you step out of line.

  • Looking at the €50 note - about the same value as $50 - you can fit 6 of them onto a sheet of A4 paper, more or less.

    A ream (500 sheets) of 80gram copier paper will be about the same size as 3,000 notes. So €150,000 fits into that size and a box of 5 reams is the same size as €750,000. There are also €100, €200 and €500 notes so the value nearly scales up since the notes get larger as the value increases. Personally I doubt that "criminals" would have any trouble moving large

  • by Lawrence_Bird ( 67278 ) on Tuesday February 23, 2016 @09:40AM (#51566211) Homepage

    once again our wonderful elites think that fucking over all but the handful of bad actors is a *great* thing to do. Why? Because they can consolidate power. No cash means all transactions are traceable. What a gift to the IRS, FBI, divorce attorneys, hackers or anyone on a fishing expedition. You know what you need to replace the buying power of that $1,000 note cancelled in 1969? $6,530! Put another way, a "$1,000" note today is worth $148.69 of 1969 money. And they want to elimiate the $100? all $14 of it?

  • Here they are talking about 500 euro notes (worth $550 US) but the $500 US bill is already discontinued. Completely unrelated.
  • If the government stops doing their job of providing a reliable currency for physical exchange, then go back to trading gold nuggets and non-monetary coins containing actual specie....

  • by hey! ( 33014 ) on Tuesday February 23, 2016 @09:48AM (#51566291) Homepage Journal

    Why not get rid of paper money denominated over $20, and introduce coins instead. After all, what difference does it make for most valid uses whether the material we make our physical money out of is paper or, say, stainless steel? And lets adopt a simple convention that $10,000 in coins denominated $50 or above weighs a kilogram. That makes the coins easy to count, and you can easily carry several thousands of dollars in cash on your person, but a million dollars in coins would weigh 100 kilos.

    It'd still be possible to put your life savings under your mattress. Steel has a density of roughly 8000 kilos/m^3, so a million dollars of coins would still be quite compact. However paying for that $10 million dollar cocaine shipment would be extremely inconvenient to do in untraceable cash because it'd literally weigh a ton.

  • by Applehu Akbar ( 2968043 ) on Tuesday February 23, 2016 @09:50AM (#51566303)

    It would be in our best interests to keep criminals using cash, rather than switching to the new virtual currencies. Kidnapping for ransom used to be a major problem in the US until improvements in police tactics eliminated all viable means of transferring cash ransom.

    But recently we have seen a proliferation of ransomware attacks, because so far it has been the perfect crime. Bitcoin has proved to be untraceable. If we eliminate cash and push the thug community into making the technological leap to Bitcoin, we will see a wave of kidnappings eclipsing anything we have seen in Mexico.

  • There's so many more practical reasons to ditch the penny or the paper dollar bill.

    And while *some* criminal transactions would be made more inconvenient by abolishing $100 bills, do you really think that black markets and criminal transactions would just end without it? The people behind them are incredibly entrepreneurial and have demonstrated a remarkable adaptability to pressures on their business, whether its engineering tunnels or building submarines.

    I'd be curious just how they would end it -- there

  • Rich people already move money around the globe by buying and selling precious stones. I know guys who take their wives on vacation while wearing $100,000 worth of jewelry. When they get to their destination, they sell the jewelry and leave the cash in that country.

    Why wouldn't terrorists do the same thing?

  • We use $100 bills to buy cars off Craigslist. Yup, either at the title office, or a busy-ish Starbucks, or even at a police station.

    Or when we buy a gun at a show, from a licensed dealer, after having passed an NICS background check, just like we're supposed to, obedient sheep we are.

    Or we spotted a superb rolling tool chest at a yard sale, and a few $100s are easier than a fistful of $20s.

    And we do so because some transactions do take place in cash because that's the preferred means of payment.

    The use cas

  • I have an idea... (Score:5, Interesting)

    by fuzzyfuzzyfungus ( 1223518 ) on Tuesday February 23, 2016 @10:25AM (#51566553) Journal
    Before we start worrying about cash; why not actually crack down on all those 'respectable' financial institutions that are more than happy to launder money?

    Sure, maybe filthy proles use stacks of grubby bills to do their crimes; but so long as HSBC and the like can launder billions in drug money and handle transactions for a variety of theoretically-embargoed states(and face zero criminal penalties either as a company or on the part of any of the people involved); only little people smuggle cash.

    Without a flamethrower-cleanup of the financial sector, making noises about high-value notes is basically just bigger criminals whining about the fact that they have to deal with lesser criminals who might find using money mules cheaper than buying bespoke financial services for the multijurisdictional client who values discretion.
  • by ebonum ( 830686 ) on Tuesday February 23, 2016 @10:30AM (#51566601)

    It's time to kill Larry Summers

  • by Irate Engineer ( 2814313 ) on Tuesday February 23, 2016 @10:48AM (#51566753)

    Yeah, let's ban all cash, drive interest rates negative (except for top tier savings accounts with balances greater than $100k or so), force everyone to either invest in the stock market or continually buy stuff in order to try to maintain the value of their earnings. Real estate prices will skyrocket because that will be one of the places people will want to stash their earnings.

    The top 1% will become the top 0.1%, the bottom 99.9% will be reduced to a half-assed barter economy, no personal savings, and mortgage and loan debt beyond belief.

  • by DutchUncle ( 826473 ) on Tuesday February 23, 2016 @11:44AM (#51567355)
    Dinner for four (with a tip) can easily approach $100. Shopping for the week can easily be $100. There is an order of magnitude difference between $100 and 500 Euros (OK, half an order, it's 5.5x instead of 10x). I have to assume that part of this is shilling for the banks, who would love to impose their 3% tax on every single dollar, every single time it changes hands. Hey, Mr. Summers, instead of removing convenience from the great mass of people, how about explaining why banks get to charge such a high percentage for, essentially, an email? (And then you can explain why phone companies get to charge ridiculous rates for data when it's in the form of text messages . . . but that's another story of the large entity being able to force its will on each of the small entities, even though the small entities could easily overwhelm the large one if they would only work together.)
  • by JoeyRox ( 2711699 ) on Tuesday February 23, 2016 @11:51AM (#51567411)
    The man is described as always being the smartest guy in the room yet nearly every major position he's taken on the economy has been wrong, like 180 degrees wrong. The most recent and damaging was his staunch support and very active role in the deregulation of financial derivatives.
  • Apparently, Summers doesn't understand how inflation works.

    $500 of 1969 dollars would be worth: $3,267.97 in 2015

    $500 of 2015 dollars would be worth $76.50 in 1969

    $100 of 1969 dollars would be worth: $653.59 in 2015

    $100 of 2015 dollars would be worth $15.30 in 1969

    Source: Inflation Calculator [davemanuel.com].

    The Federal Reserve has been working hard for the last 100 years to reduce the value of U.S. currency. It is not necessary for Congress and the Department of Treasury to aid them any further in the endeavor as they seem to be getting along just fine.

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