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Two more battle lines just formed in the global War on Cash…
In Sweden: The country’s central bank now says paper money should be extinct within five years.
The Local reports Swedes now use cash for only 2% of financial transactions. Many Swedish bank branches are already cashless. Homeless beggars are even equipped with credit card readers…
In Germany: Spiegel Online reports the Bavarian Savings Bank Association has recommended its member banks start stockpiling physical cash. This lets them avoid paying negative interest rates on deposits at the European Central Bank (ECB).
Many analysts fear there aren’t enough paper banknotes to cover the “hoarding” if other banks follow suit.
We’ve tracked the escalating War on Cash in the Daily (see here, here, here, here, and here). The world’s central banks keep pushing interest rates deeper into negative territory.
They hope this will force people to spend or invest their savings instead of sit on them (and pay interest). It’s a radical method of economic “stimulus.”
Physical cash provides an “escape hatch” from negative rates. You don’t have to deplete your savings when you can “hoard” paper money. So bankers and governments want to limit—and even ban—cash transactions.
Bottom line: We’ll see more banks opt for “hoarding.” It will create high demand for paper bills. Tom’s advice: Hold up to $10,000 in physical cash outside the banking system. He discusses the details in the March issue of The Palm Beach Letter.
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What’s your take on the War on Cash? Are we witnessing the beginning of the end of financial anonymity? Please give us your feedback in |
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