Cash Will Be Abolished. Here’s Why

Larry Edelson

Governments have largely always despised cash. It’s almost impossible to trace, and therefore, tax. And it sustains an underground economy for drug dealers and terrorists.

Never mind that there are plenty of good people in the underground economy. The government doesn’t care. They see a rat in the barn, and governments, as they are, are all too ready to burn down the barn to catch the few rats.

For years now, that’s largely how governments around the world have waged a war on cash. They’ve implemented restrictions on how much you can carry with you. How much cash you have on you that you have to report when you go through customs. How much you can withdraw from the bank at any one point in time. And more.

The thing is, government wars on cash are now on steroids. The reason: The looming sovereign-debt collapse that will soon cascade from Europe, then to Japan, and finally, to the US of A.

As I have said all along, when governments’ backs are up against the wall, they act like caged animals, lashing out at anything and anyone that restricts their ability to stay alive.

Governments around the world have waged a war on cash, restricting how much you can carry with you.

One of the chief proponents of eliminating cash from the system is Ken Rogoff of Harvard University. But along with him are other economists who agree, and who also have major clout with governments and central banks around the world. Larry Summers and Citigroup Chief Economist Willem Buiter, for instance.

Their thinking is this: Cash is, yes, difficult to track and tax, but it also makes it difficult, if not impossible, for negative interest rates to stimulate the economy.

That’s critical now because deflation is surrounding the globe. In Europe, for instance, the European Central Bank (ECB) has had negative interest rates in effect since June of last year. Currently at -0.2%, if you’re a bank in the eurozone, your “reserves” at the ECB gradually lose value if you don’t lend them out.

The Danish and Swiss national banks have steeper negative interest rates of -0.75%. After a year, 1 million Danish krone or Swiss francs would be worth only DKK/CHF992,500, respectively.

Sounds logical from an economic management point of view, right? After all, if banks aren’t lending, then the right thing to do is to force them to lend by charging them if they don’t.

Problem is, it doesn’t work that way. Instead, the banks are largely turning around and charging their customers who deposit funds with them the same or steeper negative rates. That way, whatever the bank loses at the central bank, it gets it back from you, its depositing customer.

So now we have negative deposit rates for customers in much of Europe. And what is the customers’ reaction to negative interest rates?

Simple — they pull their money out of the banks, in cash, and hoard it, or send it offshore to better lands and opportunities.

Along comes Ken Rogoff and gang. Their answer: Eliminate cash and …

A. Less cash will be withdrawn from banks.

B. Banks will therefore lend more readily. And …

C. Bank runs, if they occur, can be ended immediately — by simply shutting down the system with an “internet-type kill switch.”

Mark my words: Elimination of cash is where the governments of developed economies are headed. Toward fully electronic currencies instead.

If you don’t believe me, then consider the steps that have already been taken that are leading in that very same direction:

 In France, cash transactions over 1,000 euros are now illegal. It’s also a crime to send any amount of cash by mail.

 In Spain, the limit is 2,500 euros. Break that law and the government will confiscate 25% of your cash.

 Italy has banned all cash transactions over 999.99 euros. To pay 1,000 euros or more, you must use a debit card, credit card, a “non-transferrable check,” or pay by bank transfer. Violate the law, and the government will confiscate 40% of the amount paid.

Similar restrictions on cash are in place in Belgium, Bulgaria, Greece, Mexico, Russia, Uruguay and a number of other countries.

Here in the U.S. we don’t (yet) have any restrictions onspending cash. But there are strict reporting rules. If you deposit or withdraw more than $10,000 from a bank or other financial institution (either by cash or electronically), the bank must file a “currency transaction report” with the U.S. Treasury.

In some parts of the country, there are “geographic targeting orders” in place — a fancy term for locations where the government feels there are drug or terrorist activities going on. Instead of the $10,000 limit, it’s a $3,000 limit.

And then there are the “civil forfeiture” laws in place across the country, which gives the police the ability to confiscate any amounts of cash you may have in your pocket or in your car if they suspect you’re a dealer or a terrorist. Problem is, scores of innocent citizens are being stopped and have their cash confiscated.

It’s all going to get a heck of a lot worse for us in the months and years ahead. Bankrupt destitute governments are the cause. They will hunt you and your wealth down like never before.

And the problem is, they are simply too dumb to realize that in the end, they will still collapse, taking you — if you don’t prepare — right along with them.

Stay safe and stay tuned …

Larry

Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader. Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.

Comments 51

Jon August 5, 2015

Great update on the markets

bob dempsey August 8, 2015

larry is 0 for 46 on his advice to me !!!!!!!!!!!!!!!! BOB

Attila August 5, 2015

Dear Larry: The reason cash will be abolished is because people are generally apathetic and have no concept of freedom or liberty. They are willing to trade off their freedom for conveniences and " security".What a bunch of dumb asses .Governments love a society of sheep not capable of critical thinking unlike "dangerous" guys like me whose father grew up during the Depression , lived under Nazi rule , experienced hyperinflation , then lived under Communist rule until he fled his native country in Hungary after the Hungarian Revoliution of 1956 where he fought to throw off the yoke of tyranny . People in western countries have had it so good for so long they are so dumbed down to the point they no longer care if they are free or not .Sad .

Mahatma Muhjesbude August 8, 2015

Very true, Attila. It's the same psychology with their acquiescence toward privacy intrusion and blatant violations of the 4th and 2nd Amendments. "oh, what do i care if i'm not doing anything wrong?" Maybe not yet, but sooner or later you will be added to the growing list of legally induced criminals in this country created by a government that makes laws and administrative decrees solely to control you. The latest one just passed is to revoke your passport if the Secretary of State office 'determines' by subjective analysis that you are somehow 'aiding and abetting' 'terrorists'-- No due process or procedure. (And while they were at it, they threw in also if you are heavily delinquent in your federal taxes, it gets revoked! ) -- And not only ISIL terrorists, but so-called domestic ones as well. But that 'definition' is also suspiciously subjective. There is also a sinister trend toward making it more of a criminal offense to 'dis' government and authority, rather than your 1st/A right and duty! Therefore all those nit wits who think they're doing 'nothing' wrong might be surprised to find their 4 am jack booted wake up call is merely because of a friendly email they sent or received from an acquaintance who is a 'suspected' domestic terrorist which the police state illegally monitored for the sake of 'public safety'. Remember, the G has dedicated well funded 'think tanks' who stay up very late at night thinking about how to achieve their agenda based Fascism. But as you said, 'We, the Sheeple' are a bunch of stupid sycophants who have nobody to blame but ourselves who continue to go about our daily air head business like blithe little flatulents in the wind, oblivious to the rapidly spreading outbreak of terminal totalitrianism as long as we have our smart phones and sufficient dole left to keep our porcine jowels stuffed with enough Dorito chips to make it to the end of the month. The never failing reality is that we'll all get what we deserve in the end, and we will certainly deserve what we get.

Bennett August 8, 2015

You don't miss it until it's gone; that applies to both cash transactions and your own personal freedom. The REAL reason they want to abolish cash is that the elimination of cash is yet another step in gaining complete control of everything and everyone.

scott August 5, 2015

Revelation speaks of the mark of the beast, taken on the hand or forehead, without which no one can buy or sell. A cashless society for the first time would make that possible. So, if the country moves to a cashless society, having a hoard of cash in a safe deposit box or under the mattress would do you no good; you would not be able to introduce the cash into the cashless society. So the answer is barter? If so, I would appreciate a reference to some publication that lists specific items that the author believes will best retain their value and utility for bartering.

John S. August 6, 2015

I believe that will be the time when Gold and Silver start to gain traction. Then they will try and ban the purchase of goods with the two metals. The Beast is coming to a town near you, very soon (in the next 5 - 10 years). Governments are going down. Yes, they will try and pull their citizens with them.

randy August 12, 2015

toilet paper. gold and silver will be useless for they will be outlawed, after all how many of the fools known as gold bugs have said gold is money? well, cash is money.

john August 5, 2015

Another week, and no mention about gold at all. Liked you a lot more when you were with uncommon wisdom and reported about gold almost every day, instead you waste time on war cycles, a cashless society and other junk. If you and the rest of the so called financial leaders want a cashless society we the sheep will get it. The bankers didn't like gold, because it couldn't be made out of thin air like a cashless society. Give us some real advice?

Dawn August 5, 2015

Wow John, You are acting just like the elitist. This is not just about what you want. Larry is trying to prepare people for what is happening & what is to come. While you may not appreciate the info, there are many that do. Especially new comers trying understand what is happening ! If you're not interested, just ignore the info. (No insults intended)

rob August 5, 2015

what i dont understand is Larry said to buy gold to protect against inflation right,. ok, so as we have seen, deflation is bad for gold,. right,.so how come now everyone is saying inflations is just as bad for gold? i dont get it!

Dum Dum August 5, 2015

Now you get it.............but you don't get it The answer you seek, is neither

john August 5, 2015

No insult taken, I really am interested but just looking for good advice. should have bought gold in the late sixties when it was less than $50/oz. My friend told me to buy as much as I could, didn't listen then. Very few newsletter writers give good usable advice.

John S. August 6, 2015

Larry said enough about Gold. He sees it bottoming later this year and then starting its Bull Run once again. I believe he mentioned a bottom around $874 per ounce? He also has stated the reason for the next run, will be Governments crumbling and people losing faith in the Fiat Currencies and this story would tie in to that logic. Once Governments are able to remove Cash from Society, then they can just flick a switch to control their citizens. This is where Gold (and probably Silver) will become very Valuable as the Replacement for 'PAPER' for Underground Purchases.

Heidi August 8, 2015

Dawn - you are right to a point with your comments to john but Larry could also simplify his message by saying : DO YOU REMEMBER 2008 IN THE MARKETS ? Well - what's coming is 3 x as bad and remember gold sank too - it will not save your life . Not everybody thinks " internationally " . Recall the markets this week - even gold .........think . It feels like 2008 already if you have your eyes wide open . These days bears make money - not bulls .

Mahatma Muhjesbude August 8, 2015

John, they'll make 'underground' purchases Illegal. Don't forget they also made more than a couple oz's illegal back in the day for private citizens. And the way they are going with all these Fascist laws now, don't be too shocked if they also ban it again, and begin confiscations. What makes you think anybody is going to take your gold and silver for 'underground' purchases when they'll 'take you away' if they catch you? Plus, when Larry's prediction of a 'cashless society' comes true, what makes anybody thin that gold or silver will be worth that much anymore?

Bennett August 8, 2015

You really think it's going to get "that bad"? Forget gold and silver; stockpile soap, toilet paper, medical items and 022 bullets. If you have those you can barter for anything else you'll need.

Kathleen August 9, 2015

What do any of you think about Bitcoin as a backup in this coming major problem?

Mahatma Muhjesbude August 9, 2015

Kathy, bitcoin is part of the problem, not the solution. It's nothing but a volatile commodity that caters to a strange type of 'insider trading' And it is very susceptible to fraud and theft. Some Bitcoin big shot from France, i think, just got nailed for bitcoin theft.. Some 'conspiracy' theorists believe it's the pilot program/test for a cashless digital society and is actually operated by the CIA. Wouldn't THAT be a surprise, LMAO! The solution is to fire all these Fascist/Corporatist/bankster 'lawmakers' and get somebody else in there to repeal all the anti-Constitutional and anit-free capitalist enterprise laws and make new ones in the people's favor!

mephisto August 5, 2015

Larry sure phoned it from home today. Why come here when you can get Armstrong's views on his own site ?

Mephisto August 5, 2015

why go to armstrong's site when you can get it here?

mephisto August 6, 2015

why get it here when you can get it here

Mephisto August 6, 2015

because i'm already here and i don't want to go there.

mephisto August 6, 2015

Stay here then. No one is forcing your to go here.

Mephisto August 6, 2015

whew! thanks for letting me stay, mephisto.

JT Marlin August 5, 2015

"So close I can taste it" Buy IamGold... joke.

jon August 5, 2015

iag approaching .62 was suppose to be $62,00 by next year

john August 5, 2015

Now is the time to buy gold stocks – Buy when everyone else is selling – buy when there is blood in the streets. buy when it looks impossible that they will recover. But don’t listen to me. Remember when the explosion at three mile island happened, and everyone said electric utilities would go under? Larry doesn’t know what the gold market will do, and neither do I. When was the last time Larry showed you a gold chart? If you read any of the news letter advisors, know this, not one gets it 100% right all the time. I read his articles and make up my own mind. Get lol.

hiede August 6, 2015

sounds like you're calling the bottom in gold here, john. were says the top was in for stocks in july, and edelson says we're going to have a correction here. john: time to buy gold stocks were: top is in for the year in july larry: time now for a correction

mammy August 6, 2015

so close i can taste it...

john August 6, 2015

intend to increase amount I have in gold stocks regardless of what Larry says. btw utility stocks did quite well after three mile island. If we are not at the bottom we are close to it. "so close I can taste it"

fudd August 6, 2015

are we going to have a world currency first, larry? or are we going straight to abolishing cash?

John S. August 6, 2015

No, they wont go straight to a World Currency. There is a Point at which people wont tolerate Change that is Too Extreme. Governments have experimented Heavily with Psychology. They know how far they can Push, before people Push Back. They just Nibble away at Freedom a little at a time. Enough to cause a stir and get the masses complaining, but not enough for them to toss them out on their Arses. While they keep Nibbling away, the Older Generations fade away and the New Generations are CONDITIONED to these Changes... Eventually, they will try and create a Global Currency, once they figure out how to get the Bugs out of a currency called the Euro. Control the Money, Control the World!!!!

Michael August 7, 2015

What do World Leaders, Larry Edelson, and everyone on this site have uncommon? Sharing 98% of our DNA with Chimpanzees. That said, I'm skeptical that all the gold in the world will protect us from the fate that we seem so set on creating for our future.

Roger August 8, 2015

Gold Stocks Are paper...like money!

Mephisto August 8, 2015

i agree, roger. and gold itself is nothing but a shiny, useless rock.

Ed the Grocer August 8, 2015

Replace illegal cash with what? It is already here. Many services and goods are already being delivered by written contract that the taxpayer or consumer did not ask for nor will they ever had control over. The government institutes new regulations and up pop companies delivering the service in situations where competition seems completely missing. These new groups are sucking the consumer dry in a manner that would make a Mafioso proud.

Will August 8, 2015

My goodness, abolition and prohibition of cash. I think it will soon be time to open a Speak Easy.

Nancy August 8, 2015

I am small fry. Why should I expect to get my 1's and 0's out of a brokerage account - after currency/economy/government/bank failure? Do not those broad failures include all purveyors of investment rather than manufacture?

Louise Cave August 8, 2015

We're surely missing something here. If cash becomes electronic and no longer paper in your billfold, how do simple people who have no credit card or computer buy any groceries at the supermarket? How do they pay their utility bill or purchase medicine without cash? It's easy to panic and accept negative predictions written by financial newsletter publishers. Shouldn't readers look for more specific information?

Colorado August 8, 2015

If they're planning a war on cash the price of gold will go thru the roof. I don't believe it and if they wage a war on cash bartering will also go thru the roof which will lessen their tax revenue. This might happen in places where citizens aren't allowed to carry guns but I doubt this will ever happen in North America.

Will August 8, 2015

One thing that is being deeply missed here is:

Will August 8, 2015

One thing that is being missed here is that not all countries would likely eliminate cash at the same time. Some countries could wage a currency war to include cash. Their currency could then more easily replace any cash free Euro or Dollar. Furthermore without cash, the first power or Internet failure of any extent or duration would make gold and silver the default cash currency bloody well quick. My goodness even jewelry, artwork, weapons etc could then come into play.

paul romano August 8, 2015

Lets commit suiside together or live on your knees together.

Jungle Jim August 8, 2015

There are many problems with electronic currency, but let me seize on one that few seem to realize. If your internet connection fails for any reason, storm, accident, etc. you are functionally destitute. All transactions must be processed electronically, in short, over the Internet. There is hardly a more insecure means of communication known. Scams and frauds of every description flourish on the Internet now, and this will attract the criminal hackers en mass. In addition, it will make the Internet a priority target for terrorists and foreign enemies alike. North Korea, ISIS, Iran and other are all but certain to home in on such a lucrative target. And when you remember that the incompetents in Washington can't protect themselves and their own data, you have to wonder what they can do for you.

donald August 8, 2015

When they make a move like abolishing cash That will increase the biggest black market they ever seen.I for one care about my privacy. Some of our original coined currency Stated M.O.B. Mind your on business .

Perry hooten August 9, 2015

Just like our great leader in the White House said, he was not concerned about deficits!

William Soko August 10, 2015

Yes --- "The REAL reason they want to abolish cash is that the elimination of cash is yet another step in gaining complete control of everything and everyone." this is the correct answer! Sure forefitting on promises like pensions made by previous govs adds to reason for control too; and guess what? if all transactions are through banks -- who gets a cut of every transaction -- a de facto TAX - // But there actually is some good news in that; some people will still like cash and it will not totally disappear for a vedry long time if ever; -- security agencies, officials of all kinds, small traders ..eskimos wheeler and dealers -- etc. probably the next step is limiting notes to the plebs over $10. while 100s will still be available to the few but not re issued by banks. When you think off it most countries only have notes equal up to around 40-50 $US. Watch for the 500Euro to disappear. Just straight control by rulers who own the banks and the govs too......... and of course the electronic world.......

BDF August 10, 2015

least we not forget these prediction by our fellow commentators: john: time to buy gold stocks were: top is in for the year in july edelson: time now for a correction

shmuel sharir August 11, 2015

Two mistakes in the article: Taxing cash and achieving negative nominal interest rate are not difficult to achieve!!! 1. Cash is here to stay!!!! IT IS VERY EASY TO TAX CASH BY REPLACING THE CASH WITH NEW NEW CASH OF A DIFFERENT COLOR OR PICTURE. SIMPLY PROCLAIM THAT THE OLD CASH WILL NO LONGER BE LEGAL TENDER ON A GIVEN DATE. WHEN CHANGING THE CASH OF, SAY, $100, A TAX OF 10% MEANS THAT ONE WILL GET ONLY $90 OF THE NEW CASH. 2. Negative nominal interest rate can be achieved as well!!! NEGATIVE NOMINAL INTEREST RATE MEANS THAT THE BANK (ACTUALLY THE GOVERNMENT) PAY YOU TO TAKE A LOAN. IN THIS CASE THE ADMINISTRATION IS A LITTLE MORE INVOLVED, AS YOU USUALLY WILL WANT A PROOF THAT PEOPLE SPEND THE MONEY ON GOODS, STOCKS, BONDS, MACHINES ETC RATHER THEN DOING NOTHING (AND ONLY COLLECTING THE GOVERNMENT SUBSIDY FOR BORROWING) WITH THE BORROWED MONEY.

Allen Kaanana September 2, 2015

Even the United Nations, alongside the Bill and Melinda Gates Foundation, wants societies to forego cash for more virtual transacting. It wants to cut costs and improve transparency, and is working with governments and the private sector to encourage more use of electronic payments.