The end of cash has begun

With all that has been happening in the U.S. over the past couple weeks, it’s understandable that our myopic media has missed one of the biggest stories of 2016.

India has made 500 and 1,000 rupee notes (about $7.30 and $14.60 respectively) illegal. These are considered large bills in India and the government has now stopped producing them and has told everyone that they are not to accept them after a certain grace period.

This has meant chaos in India, as people line up to trade in their stash of these (and larger notes). After the grace period, which stands at up to 60 days for various businesses, farms and banks these notes will be illegal. Well, technically, the notes have had their “legal tender” designation stripped. The effect is the same.

By late November more than $80 billion in notes had been exchanged.

Bear in mind that these two notes make up about 86 percent of the available currency in India. And remember, India has 1.25 billion people.

Imagine if the U.S. banned anything above a $5 bill. Can you imagine the utter chaos? India is three times the size of the U.S., population-wise. What’s more, it’s the most cash-dependent country in the world.

The government’s stated goal is to dry up the cash society so that it will be more difficult for the black market and payments that now avoid taxation.

It’s not the first nation to go down this road. Ecuador has developed the world’s first electronic national currency, but it hasn’t yet banned cash.

In the 1990s, 80 percent of Denmark’s retail transactions were in cash. Now, that number is down to 25 percent and government is looking to stop circulating cash by 2030.

In September 2015 France made it illegal to buy anything above 1,000 euros with cash. After the terror attacks the government said it started a war on cash to curtail funds flowing to terrorists.

Germany is looking at putting a 5,000 euro cap on cash payments.

Mexico has banned cash payments of more than 500,000 pesos (about $24,000) for houses and 200,000 pesos (about $9,700) for cars, jewelry and other property, including lottery tickets.

Uruguay banned all cash payments above $5,000 last year.

Bankers find cash to be expensive and outdated. It takes paying people to deal with cash and if they have fewer inputs, banking execs make bigger bonuses.

And electronic payments mean every transaction you make can be tracked. Will be tracked. Is being tracked.

You remember Edward Snowden talking about how NSA employees would look at people’s private photos and videos and share the best with one another, just for kicks?

Imagine if it’s your banking records.

You don’t have to be under suspicion, just caught in the wheels of the intelligence community.

A cashless society is the dream of banksters and big government. It places us all in very exposed position relative to our 4^th Amendment rights to privacy. This is a way for the state to take control of every aspect of your life.

This is one of the reasons that liberty-loving people like me have been advocating precious metals and hard assets, as well as bitcoin, to help you stay off the grid for as long as possible. Bitcoin is now trading at all-time highs and many expect that it’s because many Indians are cashing out their rupees for bitcoins.

With China’s yuan teetering on collapse and the U.S. dollar likely to lose more strength as rates rise, it’s not likely the value of any of these alternative investments (bitcoin is considered an asset, even though it can be used to pay for things, if the seller accepts it) are going down anytime soon.

— GS Early

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