As everyone is aware by now, the Federal Reserve’s main application in economic warfare has become hyper low interest rates and, as a result, incredibly cheap money for large corporations vis-à-vis the questionable leadership of QE – quantitative easing. Enjoy!!!

Today, the how-low-can-you-go crisis has produced damaging interest rates, meaning not only that many ventures carry no return but that numerous deposits cost money.

Well-known Citigroup economist William Buiter claims the remedy to this backwards market is to reign in the charm of normal currencies like cash – because it is “causing problems” for central bank tricks:

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.

Adverse interest rates are caused to become useless by the “effective lower bound” – basically the point at which a sensible individual would stop making a deposit into banks and bonds at cost and alternatively hold cash, which while it doesn’t generate interest, undoubtedly stays liquid and tangible.

From an economist perspective however, it is cash holders who must be reigned in (not Wall Street or the central banks):

Fundamentally, the ELB [effective lower bound] 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.

The remedy? For these big gamers, it is a simple matter of banning, or at least penalizing, cash and other straight forward currency with supplemental transaction fees:

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.

It was disclosed only days ago about the change in the procedure of hard cash, with JPMorgan’s CEO Jamie Dimon also called to reign in cash by billing consumers the “true cost” of utilizing these everyday assets:

Moreover, JPMorgan and other big banks are expanding their policies of charging customers to hold deposits, validate funds and make transactions – charges that JPMorgan sees as the “true cost of moving money.”

With new measures for cybersecurity, fraud protection and payment verification in mind, JPMorgan is slated to tack on new processing fees and add costs for all transactions, and especially ‘outmoded’ payments like cash and checks and the loafing “free riders” who use them.

Relating to cash, Dimon said:

We need to build a real-time system that properly charges participants for usage, allows for good customer service, and minimizes fraud and bad behavior.

Will these people really prohibit cash?

For his portion, Buiter confesses there are drawbacks to outlawing cash – especially for little people who still work in paper money, the poor, those functioning in community markets and for those worried with privacy. He lists:

1. Abolishing currency will constitute a noticeable change in many people’s lives and change often tends to be resisted.

2. 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.)

3.Central banks and governments would lose seigniorage revenue.

4. Abolishing currency would inevitably be associated with a loss of privacy and create risks of excessive intrusion by the government.

5. Switching exclusively to electronic payments may create new security and operational risks.

But in the end, Buiter does not care. To him, these are “weak” disputes against outlawing cash, and seemingly anything and everything should be done to keep the odd technique of money flowing – and power over the complete financial system in the hands of the Federal Reserve.

Let alone that it will only help those at the top, or that it will penalize the poor and working classes – even in the most normal of transactions – while compelling that masses onto an electronic system that can be tracked and limited based upon rules from the top.

Obviously, that has been the plan for years, with ideas to manipulate the population through a digital, cashless control grid.

Once that point is attained, cash won’t just be useless, it will be criminal. It is coming. The question is how soon will it appear? Be AWARE and be PREPARED, FEAR is not an option. Be safe everyone…

The Rabbit Hole Goes Real Deep, Find Out HowDeep… HERE