JP Morgan begins to ban cash

[thegente]

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 Bandwagon

We 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:

1. Abolish currency.
2. 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 Concerns

Bloomberg 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.

1. 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 19^th 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.

 

 

Conclusion

We 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.

[dantach]

In the 1930s, the feds raided safe deposit boxes and took any cash. Are we about to see this again?

[SgtFuryUSCZ]

***///

 

Ya'll know we've been tellin' ya not to put yer cash in the banks ! 

 

Don't know where else ya gonna store it, that's on you.  

 

But ya stand a better chance of hangin' on to it if'n ya don't leave it laying around for

the Global Cartel of Evil Central Bankers to steal it from ya...

 

..or hobummer's personal thieves via his OPERATION CHOKE POINT.....

 

they're comin' for yer dough, folks !

 

jus' sayin'.....

 

 

.

Edited April 22, 2015 by SgtFuryUSCZ

[The Machine]

well there is going to be a lot of poeple having tough conversations with the IRS next year ...... explaining where all the cash came from.

 

thats if they're stupid enough to stick it in a bank account.

[bigwave]

"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."

 

[temperament5]

Thank you for bringing this article over.  This is not a surprising move by JPMorganChase, with many others to follow I am sure.  The excuse of making it more secure for people is ridiculous!  One way (banning cash) they will be gaining financial control over everyone.  What is surprising is that it doesn't seem to phase many that this is going on and what the aftermath will be.

 

Like those above said, prepare yourself.  So many warnings, time to open our eyes.

[umbertino]

Thank you for bringing this article over.  This is not a surprising move by JPMorganChase, with many others to follow I am sure.  The excuse of making it more secure for people is ridiculous!  One way (banning cash) they will be gaining financial control over everyone.  What is surprising is that it doesn't seem to phase many that this is going on and what the aftermath will be.

 

Like those above said, prepare yourself.  So many warnings, time to open our eyes.

 I think you're right, Temp.. Grazie for your post. Ciao my Friend.

[Butifldrm]

 

Largest Bank In America Joins War On Cash

 

Submitted by Tyler Durden on 04/23/2015 23:44 -0400

• The war on cash is escalating. Just a week ago, the infamous Willem Buiter, along with Ken Rogoff, voiced their support for a restriction (or ban altogether) on the use of cash(something that was already been implemented in Louisiana in 2011 for used goods). Today, as Mises' Jo Salerno reports, the war has acquired a powerful new ally in Chase, the largest bank in the U.S., which has enacted a policy restricting the use of cash in selected markets; bans cash payments for credit cards, mortgages, and auto loans; and disallows the storage of "any cash or coins" in safe deposit boxes.

  •  

    Buiter defended his "controversial" call for a ban on cash, as Bloomberg reports:

    As mentioned above, no meddling by a central bank is ever too extreme or too crazy for Mr. Buiter.

     

     

    “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:

    1. Abolish currency.
    2. Tax currency.
    3. 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.”

    But now the banks themselves are getting involved, (as Mises' Joseph Salerno notes),

    As we previously concluded,

     

     

    The war against cash has, up to now, been waged almost exclusively by national governments and official international organizations, although there are exceptions.  Now the war has acquired a powerful new ally in Chase, the largest bank in the U.S. and a subsidiary of JP Morgan Chase and Co., according to Forbes, the world's third largest public company.

     

    Of course , it is hardly surprising that a crony capitalist fractional-reserve bank, which received $25 billion in bailout loans from the U.S. Treasury, should want to curry favor with its regulators and  political masters and, in the process, ensure its own stability by helping to stamp out the use of cash.  For the very existence of cash places the power over fractional-reserve banks squarely in the hands of their depositors who may withdraw their cash in any amount and at any time, bringing even the mightiest bank to its knees literally overnight (e.g., Washington Mutual).

     

    What is a surprise is how little notice the rollout of Chase's new policy has received.

    • 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."  Whether or not this pertains to gold and silver coins with no numismatic value is not explained. 

    As one observer commented:

     

    This policy is unusual but, since Chase is the nation's largest bank, I wouldn't be surprised if we start seeing more of this in this era of sensitivity about funding terrorists and other illegal causes.

     

    Bet on it.

    *  *  *

     

     

    We 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.

    In short, things in the already insane monetary realm are about to get a whole lot insane-er. But don't worry, the central banks are in full control.

http://www.zerohedge.com/news/2015-04-23/largest-bank-america-joins-war-cash

Edited April 24, 2015 by Markinsa
Merged Topics

[SnowGlobe7]

[AJC]

Bring on Bitcoin !!!!!

[SnowGlobe7]

I have had a safety deposit box for many years...the contract has ALWAYS said ...no storing cash...always wondered about that