India looks like a trial run to us.
Sadly it really has been a trial for the Indian citizenry.
The whole place is economically dysfunctional. This is what happens when prices are restricted by the government and the totalitarians refuse to let in the light of the market. It’s really that simple fundamentally.
It should be noted also that the Indian government pulled a similar thing a couple of weeks ago and also threw its economy into a spin.
The War on Cash is on.
As some people say, CASH is TRASH. This has proven true in India in recent weeks. Gold however is money.
A key thing to understand for all you non “gold bugs” (and I use the term lovingly) is that gold doesn’t so much go down or up in price as much as paper currencies gain or lose value relative to the value of gold. Gold is a steady Eddie and has been for millennia. Paper has a tendency to die an ugly death.
The central banks want your cash. And the “cops” want the data that comes with a cashless society.
Imagine if suddenly the $100 bill just went away.
The strong central government in India wants to crush the free untaxed “black market” economy and has thrown the lives of many everyday people into chaos.
There is a reason why many people seek to buy gold in India when they can.
The War on Cash is on. The opening salvos were launched months ago, and now we are getting into the meat of the campaign which is being driven by central banks, governments, and by industry. They all want to kill cash.
The central banks hate cash particularly because it limits their power. There is real concern that in the event another significant recession rolls around central banks will have a hard time pushing down interest rates,
The war on cash is a war on anonymity. Cash transactions are private and discreet. Electronic transactions are recorded and can be sifted through for all sorts of things.
Central planners hate cash. It puts power in the hands of the awful, terrible, ignorant consumers, and limits the power of the bankers and their allies in government.
We’ve already heard quite a lot about the War on Cash this year. The opening salvos have been volleyed.
In a negative interest rate environment (which we might find ourselves in come the next recession) cash produces a relative yield. In other words the yield of the cash under your mattress is 0% but that is still better (in a negative rate environment) than what the bank will give you for said cash.
Central bankers hate cash because it limits the power of central bankers to experiment and manipulate (more often screw up) the economy as they wish.
In related news bedding stores have been selling out of mattresses all across Europe.
This should not happen in the United States. Period. This is a crying shame and it appears to be a blatant violation of the 4th Amendment to the Constitution. This should not be tolerated.
Seems reasonable. Cash makes one a criminal. OK.
Manna from “heaven.” What could be better? Hurrah! Free money!
Consider that during Obama’s recent and brief economic legacy tour he was making the case that everything was great. Meanwhile Bill Gross, the legendary bond manager, is talking about dropping cash from the sky. This ain’t good. Gross knows that helicopter money is unwise yet he’s still somewhat advocating for it.
Yeah, things are peachy.