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http://www.economicpolicyjournal.com/2015/04/the-bankster-war-on-cash-jpmorganchase.html Tuesday, April 21, 2015 The Bankster War on Cash; JPMorganChase Begins to Prohibit the Storage of Cash in Its Safety Deposit Boxes Letters are apparently going out to some JPMoragnChase customers announcing that cash will be prohibited from being stored in the bank's safety deposit boxes. At the Collectors Universe message board, a commenter reports: My mother has a SDB at a Chase branch with one of my siblings as co-signers. Last week they got a letter outlining a number of changes to the lease agreement, including this: "Contents of the box: You agree not to store any cash or coins other than those found to have a collectible value." Another change is that signatures will no longer be accepted to access the box. The next time they go in they have to bring two forms of ID and they will be issued a four-digit pin number that will be used to access the box then and in the future. Professor Joseph Salerno of the Mises Institute writes: As of March, Chase began restricting the use of cash in selected markets, including Greater Cleveland. The new policy restricts borrowers from using cash to make payments on credit cards, mortgages, equity lines, and auto loans. Chase even goes as far as to prohibit the storage of cash in its safe deposit boxes . In a letter to its customers dated April 1, 2015 pertaining to its “Updated Safe Deposit Box Lease Agreement,” one of the highlighted items reads: “You agree not to store any cash or coins other than those found to have a collectible value.” Just last week, Citigroup's top economist, Willem Buiter, wrote a report calling for the abolishment of cash as a sound policy. Hide your wallets, the banksters are on the move. MORE: http://www.zerohedge.com/news/2015-04-16/another-shill-statism-central-planning-demands-cash-ban Citigroup's Gold "Expert" Demands A Cash Ban inShare26 Late last year, Grexit "expert" Willem Buiter decided that he was a greater expert on the topic of monetary metals than on geopolitics by stating that "Gold Is A 6,000 Year Old Bubble." Now, he has decided that after gold, it is best to just do away with any physical currency altogether and the time to ban cash has arrived. Submitted by Pater Tenebrarum via Acting-Man blog, Citigroup’s Chief Economist Joins the Cash Ban BandwagonWe have discussed the views of Citigroup’s chief economist Willem Buiter previously in these pages (see “A Dose of Buiternomics” for details), on occasion of his coming out as a supporter of assorted monetary cranks, such as Silvio Gesell, to name one. Not to put too fine a point to it, Buiter is a monetary crank too. Buiter is always shilling for more central bank intervention, and it seems no plan can ever be too silly or too extreme for him. In fact, he seems to have made the propagation of utterly crazy ideas his trademark. Buiter has now joined one of his famous colleagues, Kenneth Rogoff, another intellectual enamored with central planning, in clamoring for a cash ban (for our discussion of Rogoff, see “Meet Kenneth Rogoff, Unreconstructed Statist”). Both Buiter and Rogoff want to make it impossible for citizens to escape the latest depredations of central bankers, such as the imposition of negative interest rates. This is to be done by forcing them to keep their money in accounts at fractionally reserved banks. If Buiter gets his way, there won’t be a WSOP final table with piles of cash anymore. Photo credit: David Becker / Las Vegas Review-Journal As Bloomberg reports: “The world’s central banks have a problem. When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut — they can bring interest rates to zero, but reducing them further below that is fraught with problems, the biggest of which is cash in the economy. In a new piece, Citi’s Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates. Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction? Cash therefore gives people an easy and effective way of avoiding negative nominal rates. Buiter’s note suggests three ways to address this problem: Abolish currency. Tax currency. Remove the fixed exchange rate between currency and central bank reserves/deposits. Yes, Buiter’s solution to cash’s ability to allow people to avoid negative deposit rates is to abolish cash altogether. (Note that he’s far from being the first to float this idea. Ken Rogoff has given his endorsement to the idea as well, as have others.) Before looking at the practicalities of abolishing currency, we should first look at whether it could ever be necessary. Due to the costs of holding large amounts of cash, Buiter puts the actual nominal rate at which the move to cash makes sense as closer to -100bp. So, in order for a cash abolition to become necessary, central banks would need to be in a position where they wished to set nominal rates much lower than that. Buiter does not have to go far to find an example of where a central bank may have wanted to set interest rates much lower to -100bp. He uses (a fairly aggressive) Taylor Rule to show that Federal Reserve rates should have been as low as -6 percent during the financial crisis.” (emphasis added) As mentioned above, no meddling by a central bank is ever too extreme or too crazy for Mr. Buiter. Here is his ridiculous “Taylor rule” chart (the conclusions of which by the way would be vehemently disputed by none other than Mr. Taylor himself). Buiter’s ridiculous chart asserting that a “negative interest rate of 6% would have been needed” in 2008-2010, via Citigroup, Bloomberg. This nice gentlemen who wants to either “abolish cash” or “tax currency” for the good of us all, is a typical example of the modern-day viciously statist intellectual (h/t, Hans-Hermann Hoppe), who constantly pines for the authorities to implement social engineering on a grand scale. As long as they implement his plan, everything will be great. Not Bothered by ConcernsBloomberg tells us that “Buiter is aware that his idea may a bit controversial”. What a relief. He even lists the disadvantages of abolishing cash, only to dismiss them out of hand. With the exception of one crucial point, he is mainly erecting straw men. “Buiter is aware that his idea may be somewhat controversial, so he goes to the effort of listing the disadvantages of abolishing cash. Abolishing currency will constitute a noticeable change in many people’s lives and change often tends to be resisted. Currency use remains high among the poor and some older people. (Buiter suggests that keeping low-denomination cash in circulation — nothing larger than $5 — might solve this.) Central banks and governments would lose seigniorage revenue. Abolishing currency would inevitably be associated with a loss of privacy and create risks of excessive intrusion by the government. Switching exclusively to electronic payments may create new security and operational risks. Buiter dismisses each of these concerns in turn, finishing with: In summary, we therefore conclude that the arguments against abolishing currency seem rather weak. Whatever the strength of the arguments, the chances of an administration taking the decision to abolish cash seem vanishingly small. We are surprised by the optimism expressed by Bloomberg that “the chances of an administration taking the decision to abolish cash seem vanishingly small”. We believe that governments all over the so-called “free world” are working feverishly to make a ban of cash currency a reality. Naturally, we couldn’t care less about the “seignorage” revenue of the State. In our opinion central banks shouldn’t even exist, and “seignorage” is nothing but a euphemism for outright theft. It’s a nice touch that Buiter also doesn’t want to “throw seniors under the bus” and gives a brief thought to the poor as well. Why would any of them ever need anything more than a $5 note? That someone like Buiter doesn’t find it difficult to dismiss the concern that “abolishing currency would inevitably be associated with a loss of privacy and create risks of excessive intrusion by the government” is no surprise, but it is indeed a legitimate concern. Under the cover of the “war on drugs” and lately the even bigger government-sponsored racket known as the “war on terror”, financial privacy has been all but eradicated already. Willem Buiter, shill for statism and central planning, here seen at the Council for Foreign Relations. Did we mention that we believe he’s an atrocious economist? Photo credit: Bloomberg Needless to say, we dispute the idea that central banks should ever impose negative interest rates. This policy is revolting economic nonsense that greatly harms the economy. As we have previously pointed out, given that the natural rate of interest can never be zero or negative, it is an inescapable conclusion that any imposition of negative market rates will end up destroying scarce capital and leave society poorer. Lastly, Buiter fails to list one counterargument that we believe is extremely important. Since he works for a charter member of the world’s most powerful banking cartel, this is no big surprise either. We will make up for his oversight. The 2008 crisis has not shown that anyone needs “negative interest rates” as Buiter erroneously claims. It has mainly shown how rickety and de facto insolvent the fractionally reserved banking system really is. If not for the introduction of an accounting trick (under immense political pressure, the FASB allowed the banks to dispense with mark-to-market accounting, which suddenly made them “whole” again), a huge taxpayer bailout and money printing by the central bank on an unprecedented scale (in the post WW2 era), several of the biggest banks would have gone the way of Lehman. It was a good reminder that although fiduciary media – deposit money that is not backed by standard money – are part of the money supply in the broader sense, their main characteristic is that they exist only in the form of accounting entries. Hence, fractionally reserved banks are at all times insolvent, since they cannot possibly pay all demand deposits on demand. This obvious violation of what once used to be a bailment contract has been sanctioned by the courts in the 19th century under the influence of banking interests. If one considers how deposit money is multiplied under this system, it should be obvious that the scheme is fundamentally fraudulent. It goes against the grain of legal traditions that have been well-established in Western culture since antiquity. If cash were to be banned, people could no longer opt out from this system. Bank runs would no longer be possible at all. While a bank run these days only gives one government scrip that is itself an irredeemable liability of a central bank, it is at least slightly more “real” than the accounting entry known as deposit money. Most importantly, cash can insure one against a bank going under, or the breakdown of the entire banking system, which is always a potential danger. Banks would obviously love a cash ban – quite possibly they are the only ones who would love it even more than governments. ConclusionWe keep being bombarded by moves to restrict the use of cash and demands to ban it altogether. These demands seem to mainly revolve around two arguments: one is that “only criminals need cash”, which is on a par with the absurd assertion that we should all be fine with Stasi-like ubiquitous government surveillance “if we have nothing to hide”. The other one is that a cash ban would make life easier for the central planners who are actively undermining the economy with their policy of debasement. We would argue that central banking and fiat money have done more than enough harm already and that the eradication of financial privacy has gone way too far. Money and banking should be freed from the clutches of government-directed monopolization and cartelization and should be returned to the free market. Addendum:One of our readers has sent us a few links concerning recent examples of the war on cash waged by governments the world over, which we reproduce below. Indeed, there is little cause for optimism on this score. Given this increase in attempts to restrict the use of cash, the danger that possession of gold will one day be declared illegal again can no longer be so easily dismissed either.

by Armando Cordoba 2/6/2013 There seems to be no banking officials or government bodies watching over the cash exchange, where hundreds and thousands of dollars and other foreign currencies are transferred or exchanged every minute. Photo: Rudaw ERBIL, Kurdistan Region—Millions of dollars pass through the Erbil currency exchange market every day, but the lucrative business in Iraqi Kurdistan's predominantly cash economy operates with little or no regulation. Walking through the Shekhallah Market, the cacophony of automatic bill counters sifting through Euros, Dinars, Dollars or Pounds nearly drowns out the steady chatter of merchants selling watches, vegetables or goods in the streets before the bustling cash sector. There seems to be no banking officials or government bodies watching over the cash exchange, where hundreds and thousands of dollars and other foreign currencies are transferred or exchanged every minute. Kurdish and foreign businessmen from neighboring countries walk into cash transfer offices with stacks of bills, and walk out with receipts in hand. Little stands are filled with Iraqi banknotes, as shop owners wait patiently for the next customer. Asked how the market was regulated, most merchants and clerks were too busy to talk. But Saadi Ali, a currency changer for 20 years, said as he sifted through bills, "I pay no taxes to the government at all." Like many of his colleagues on the street of small currency changers, Ali said that on any given day he exchanges the equivalent of thousands of dollars, all tax free and untouched by the government. And, he says, there are no start-up costs besides access to a large amount of Iraqi Dinar notes to exchange for foreign currency. In the autonomous Kurdish enclave, the only semblance of governed control seems to be set forth by the Central Bank of Iraq (CBI) and the currency conversion rates, which most of the merchants use to gauge exchange rates. But even this relationship seems to be governed on shaky grounds. Last year Hussein Muhammad, head of the Currency Trading Council, accused the CBI of flooding the market with $265 million, which devalued the US currency from 1.28 to 1.23, causing large losses among many currency exchangers. Unlike, Ali, the larger cash exchanges, and particularly cash transfer businesses have to get a license from the interior ministry. "I pay tax to the government yearly, it is almost 280,000 Iraqi Dinar," said Wrya Ali, the owner of Euro cash exchange. That is about $222 a year, an insignificant amount compared to the profits the exchangers admit to making. Merchants involved both in exchange or money transfers said they can make thousands of dollars a month, but refused to give a figure, saying it was because profits could vary greatly from one month to the other, depending on several factors. The bigger merchants have been known to sometimes make even hundreds of thousands of dollars in a single day, according to some of the money exchangers. The predominant forms of cash exchanged or traded, seems to be U.S. Dollar and Euros. Although the government does not regulate the money changers, it does ensure their security – testifying to their key role in this predominantly cash-only economy. Security guards disguised as civilians watch over the cash area for any suspicious activity, and robberies are few and far between. http://rudaw.net/english/business/020620131 Seems to be a cash flush society with no mention of any forthcoming regulations that we are all reading about. Makes for an interesting read though.... Never been much of a poster, but just thought ya'all might find this interesting. Ummmm, Go RV?