Germany Unveils “Cash Controls” Push: Ban Transactions Over €5,000, €500 Euro Note

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Our grid depends on this mineral

500euro- byFrankSchwichtenberg

It was just two days ago that Bloomberg implored officials to “bring on a cashless future” in an Op-Ed that calls notes and coins “dirty, dangerous, unwieldy, and expensive.”

You probably never thought of your cash that way, but increasingly, authorities and the powers that be seem determined to lay the groundwork for the abolition of what Bloomberg calls “antiquated” physical money.

We’ve documented the cash ban calls on a number of occasions including, most recently, those that emanated from DNB, Norway’s largest bank where executive Trond Bentestuen said that although “there is approximately 50 billion kroner in circulation, the Norges Bank can only account for 40 percent of its use.”

That, Bentestuen figures, “means that 60 percent of money usage is outside of any control.” “We believe,” he continues, “that is due to under-the-table money and laundering.”

DNB goes on to say that after identifying “many dangers and disadvantages” associated with cash, the bank has “concluded that it should be phased out.”

On Tuesday we got the latest evidence that officials across the globe are preparing to institute a cashless “utopia” when Handelsblatt reported (in a piece called “The Death of Cash) that the Social Democrats – the junior partner in Angela Merkel’s coalition government – have proposed a €5,000 limit on cash transactions and the elimination of the €500 note. 

Berlin is using a familiar scapegoat to justify the plan: the need to fight “terrorists” and “foreign criminals.”

“Limits on cash transactions would discourage foreign criminals from coming here to launder money,” says a paper penned by the Social Democrats. “If sums over €5,000 have to pass through traceable bank transactions, laundering would be severely hampered, it adds.”

On Wednesday, we got confirmation of the plan from Deputy Finance Minister Michael Meister who told reporters that Germany is proposing a euroarea ban on cash transactions over €5,000 to combat terrorism financing and money laundering.

“Since money laundering and terrorism financing are cross-border threats,” it makes sense to adopt a bloc-wide “solution”, but “if a European solution isn’t possible, Germany will move ahead on its own,” he added.

This comes at a rather convenient time for policy makers in Europe. Rates are already sitting at -0.30% and are likely to be cut by an additional 10bps in March. But that’s not likely to do anything to curb the disinflationary impulse. Mario Draghi isn’t anywhere close to his inflation target and it says a lot about how ineffective the ECB has been when everyone is relieved to see annual inflation running at the “brisk” pace of 0.4%.

As a reminder, the gradual phasing out of cash strips the public of its economic autonomy. Central bankers can only control interest rates down to a certain “lower bound.” Once negative rates are passed on to depositors – and trust us, that’s coming – people will simply start pulling their money out of the bank. The more negative rates go, the faster those withdrawals will be.

When you ban cash you eliminate this problem. In a cashless society with a government-managed digital currency there is no effective lower bound. If the economy isn’t doing what a bunch of bureaucrats want it to do, they can simply make interest rates deeply negative, forcing would-be savers to become consumers by making them choose between spending or watching as the bank simply confiscates their money in the name of NIRP.

Obviously, banning transactions above €5,000 is a long way from a wholesale ban on cash and several other countries have similar limits on cash transactions. Still, there’s no reason why the same rationale (i.e. fighting terror financing) can’t be applied to smaller sums – or all cash transactions. After all, it’s not as though “foreign criminals” only transact in amounts over €5,000 and since “follow the money” is usually the best way to get to the bottom of a perceived “problem,” having a ledger of everything someone or some group does financially would likely be an effective way to crack down on illicit activity.

We would argue that the cost to society of creating an economy wherein people’s economic decisions are completely dictated by small groups of economists far outweighs any benefits that would accrue from using a centrally planned digital currency to deter crime.

As for how a cash ban would go over in Germany, we seriously doubt the public would take it laying down given that only 18.7% of transactions in the country involve plastic cards.

(Img by Frank Schwichtenberg)

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  • capitalistpig2

    The bankers are at it again. How did Hitler come into power?

    • BigGaySteve

      Its Hitler’s revenge.

  • whiteberry

    Simply put… more subjugation for the people. Pretty soon we won’t be able to fart without them knowing…

    • Millennium

      Pretty soon, you will have to pay a Obamacare/EPA tax for farting.

  • HQ

    If you can’t hold it you don’t own it.

    • bluesheepradio.com

      Just because you can hold it doesnt make it worth anything. Fiat value to a fiat monetary system. The illusion can only stretch so far.

      • HQ

        Actually I was referring to gold. And you are correct, fiat is just paper with a perceived value..

        • Maddog

          Actually they back it with the sweat and blood of the sheeple. They will happily tell you what your is share of the national debt.

        • bluesheepradio.com

          The metals markets are so rigged that truthfully only the elite determine the value of metals. If they deem it to be worthless to get it cheap they will. And those holding metals like myself, will have nothing of value. Now days, lead is the instrument of power and wealth procurement and preservation.

        • Sandra Allred

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  • bluesheepradio.com

    They are being told they are slaves, and that “their” money doesn’t belong to them. They will roll over just like the americans will.

  • New Man

    this wont work in the states…how will the c…i hey get their coke money

  • http://robertsrevolution.net Robert Farrior

    The forces driving us to complete enslavement must be destroyed, and that will only be accomplished through world revolution.
    They must all be removed from power!
    robertsrevolution.net

  • Maddog

    I’m sure some idiot will call me names for this post. Fuck it, I no longer give a shit what morons think. This has been foretold along with the majority of the bullshit happening in the world today. Better figure out what is important time is running out.

  • Frank

    If you haven’t started already, you better start paying off debt and or pulling your money out of the bank in Cash. After paying down your personal debt, start buying land, gold or silver, durable goods – anything that will retain its value or increase in value as the economy continues to fragment. Stealing money from common people won’t prevent the inevitable, it will only REDISTRIBUTE the money to the bankers, the government, and the capitalist elites. Deny them what they seek to take – by deciding for yourself what to spend your money on and how to retain its value. Even if the bankers and government stooges force everybody to go “cashless,” an alternate economy and Medium(s) of Exchange will arise – totally circumventing and defeating their scheme. Trying to control (and tax) every exchange of goods or services between two private parties is a fool’s errand.

    • Infidel51

      You are absolutely correct. They will accomplish only the creation of a black market based upon barter or an as yet un thought of medium of exchange. Human beings have proven throughout history that they will find a way to subvert control and oppression every time. The elites clearly underestimate the American people’s aversion to being told what to do. Despite my fellow citizens recent behavior I maintain my belief that when pushed beyond a certain boundary Americans will show their revolutionary genetics.

  • Thomas Paine

    Revelation chapter 13

  • Uncle_Meat

    I’m guilty of indulging plastic transactions. Know full well that cashless society means enforcement of negative interest rates without exception. Also they have the power to turn your card off if in the event you contribute to an anti establishment candidate. This has already happened to me when I gave money to the Ron Paul campaign in 2008 and 2012.

  • How Not To Play The Game

    ………electronic money is bs. It can’t be negotiated when the power goes out. No bank nor goverment is trustworthy enough. The people know that now. Besides the black market doesn’t accept plastic money and IOU’s.

  • Infidel51

    Oh those pesky terrorists. We have to defeat those dastardly terrorists and if you don’t agree with the things we must do to defeat them that makes you unpatriotic. In fact you might be a subversive radical who needs to have his guns confiscated. In order to defeat those rascally terrorists we probably need to control all of the money, read all your emails, and listen to all of your phone calls. When it comes right down to it if you don’t want us to defeat the terrorists we probably should lock you up for a while.

    • Aussie 351

      Hit the nail on the head. Hole in one.
      You’re 100% correct.

  • none

    The central banks will be able to inter-bank loan the money. To the third world!
    Nothing like helping out a farmer in Burma Hugh?