The elimination of cash is being pushed globally in a bid to make bankers even more powerful.
The “war on cash” as it is sometimes called has been going on for some time in nearly every country with a privately-owned central bank. This “war” seeks to eliminate all cash, forcing the populace of a particular country or economic zone (in the case of the European Union) to depend on bank cards and online banking transfers for any and all purchases. No economic expertise is necessary to see that this move would give banks even more power over the world’s populace, allowing banks to track all purchases and have complete control over a person’s access to their own money. Physical cash is much harder for banks and governments to steal via taxes, bail-outs, and negative interest rates. The plan is a nightmare for impoverished countries or countries where wealth inequality is particularly pronounced. In these nations, many stores and vendors do not accept bank cards and many citizens do not have or use bank accounts, essentially alienating them from economic activity. However, the elimination of cash is exactly what is taking place right now in India.
India took an unprecedented step last week by eliminating 500 and 1,000 rupee bank notes from circulation. Though the bills may sound like large denominations, 500 rupees is worth less than $8, making the government’s decision akin to the elimination of $10 or $20 bills in the US. The Indian government’s decision caused the bills to lose their status as legal tender immediately, giving Indians only 50 days to exchange them for smaller denominations or to deposit the equivalent in their bank accounts. Indian Prime Minister Narendra Modi echoed the same defense of eliminating cash used by central banks, claiming that the decision was made in order to “crack down” on corruption and black market money. However, considering that the Indian government is notoriously corrupt and involved in black market activities themselves as are the bankers who support the move. It’s obvious that there is more to this than they openly admit.
The consequences of this act have struck at the heart of India’s economy, particularly in rural areas where bank account use is minimal. One official said that there is “chaos everywhere” following the cash ban and many politicians have accused Modi of targeting the country’s poor. Nearly half of all of India’s ATMs were shut down in the first week, causing local markets to close as the ATMs ran out of money and few people had cash on hand. Another unexpected consequence affected India’s gold market as local suspicion regarding the government’s motives has led to a surge in Indian gold demand.
Though some spectators outside of India may view this push to eliminate cash as an isolated phenomenon, this banker-backed initiative has been occurring worldwide for years. The European Central Bank (ECB) voted in February to scrap the €500 note, which then accounted for 30% of the total European paper currency in circulation by value. In the US, a similar push has been led by Larry Summers, former Treasury Secretary under Bill Clinton. Summers nearly became chairman of the Federal Reserve before significant public outcry convinced Obama to give the position to current chairwoman Janet Yellen. The outcry largely centered around Summers’ role as the architect of the repealment of the Glass-Steagall act during Clinton’s presidency, which enabled banks to gamble on assets leading to the 2008 economic crisis. Summers, who is strongly connected to elite banking interests, has called for the elimination of the $100 bill saying that “a moratorium on printing new high denomination notes would make the world a better place.” Though Summers failed to elaborate on why the US would be a “better place” for eliminating 78.5% of all the US currency in circulation, we can assume that he meant a “better place” for the financial industry, not for average citizens. If the “cashless society” contagion continues to spread, we can expect that during the next financial crisis the banks will have a much easier time executing massive wealth transfers since all of the money will be under their control.
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