Published:  12:29 AM, 09 January 2019

My right, not to use my credit card… (Part 2)

The German economist Richard Werner has pointed out negative rates raise banks' costs of doing business. To quote: 'The banks generally respond by passing on this cost to their customers. Due to the already zero deposit rates, this means banks will be constrained to raise their lending rates'.

As Werner further noted, 'In countries where a negative interest rate policy has been introduced, such as Denmark or Switzerland, the empirical finding is that it is not effective in stimulating the economy. The truth is....quite the opposite! This is because negative rates are imposed by the Central Banks!

The respected German economist has further pointed out that the negative interest rate policy of the ECB is aimed at destroying the operations of traditionally conservative EU savings banks, such as the German Sparkassen and Volksbanken in favor of covertly bailing out the giant and financially corrupt mega-banks.....such as Deutsche Bank, HSBC, Societe Generale of France, Royal Bank of Scotland, Alpha Bank of Greece, or Banca Monte dei Paschi di Siena in Italy and many others.

It may be pointed out that the President of the ECB, Mario Draghi is a former partner of the mega bank, Goldman Sachs.The obvious and relevant question is 'why now?' All of a sudden, why has an undisclosed urgency arisen, to push for elimination of cash, on the part of central banks or institutions such as the IMF?

The drum roll for abolishing cash began markedly following the January 2016 Davos, Switzerland World Economic Summit, where the western world's leading government figures and central bankers and multinational corporations had gathered (for a reason).The propaganda offensive for the current War on Cash or the 'putsch', had commenced immediately, after the Davos talks.

Several months later, in November, 2016, guided by experts from USAID and, yes, the Visa, the Indian government of Narendra Modi announced the immediate demonetization or forced removal of all 500 Rupee (US$8) and 1,000 Rupee (US$16) banknotes on the recommendation of the Reserve Bank of India.

The Modi government claimed that this action would 'curtail' the shadow economy and crack down on the use of illicit and counterfeit cash, to fund illegal activity and terrorism.Notably, the Indian Parliament recently made a follow-up study of the effects of the Modi's great 'war on cash'. The Parliamentary Committee on Demonetization report has documented that not a single stated objective was met.

No major black money reservoirs were found and Demonetization had no effect on terror funding. These were the reasons given by the Government, to implement such a drastic policy. The report had noted that while India's central bank was allegedly attacking black money via demonetization, the serious illegal money parked in offshore tax havens, was simply recycled back into India, and duly "laundered" via Foreign Direct Investment....courtesy of the criminal or corporate groups legally in a practice. And known as 'Round Tripping'.

Yet the Parliament's report had detailed that the real Indian economy was dramatically hit. Industrial Production in April declined by a shocking 10.3 percent over the previous month as thousands of small businesses dependent on cash had gone under. Major Indian media had reportedly been warned by the Modi government not to publicize the Parliament report.

If we just connect the dots on all this, it becomes crystal clear that the war on cash is truly, a war on our individual freedoms and various other degrees of freedom, in our lives. Forcing our cash to become digital, is the next step towards confiscation by the governments of the EU or USA or in 2007-2008) erupts.

In late July this year, Estonia as rotating President of the EU, issued a proposal backed by Germany that would allow EU national regulators to 'temporarily' stop people from withdrawing their funds from a troubled bank, before depositors were able to create a bank 'run'. The EU precedent was already set in Cyprus and in Greece where the government blocked cash withdrawals, beyond tiny daily amounts.

Veteran US bank analyst Christopher Whelan has established in a recent analysis, of the failure of the EU authorities to effectively clean up their banking mess, since the 2008 financial crisis, He has reminded that 'the idea that the banking public - who generally fall well-below the maximum deposit insurance limit - would ever be denied access to cash. This would virtually ensure that deposit runs and wider contagion, will occur in Europe any time a depository institution gets into trouble'.

Whelan has also pointed out that ten years after the 2008 crisis, EU banks have remained like a cats on hot tinned roofs. According to this prestigious economist, 'there remain nearly €1 trillion in bad loans within the European banking system. This represents 6.7% of the EU economy. And, that is huge'. He further pointed out that banks' bad loans as share of GDP for US and Japan banks are 1.7 and 1.6 percent respectively.

As governments, whether in the EU or in India or elsewhere, refuse to rein in fraudulent practices of the largest banks, that force people to eliminate use of cash and keep all their liquidity in digital deposits, with state regulated banks. This has set the stage for the states to confiscate those assets, when they declare the next emergency.

If we are foolish enough to permit this scam to pass unchallenged perhaps we deserve to lose our signs and symbols of financial autonomy. Fortunately, popular resistance against elimination of cash in countries like Germany is massive.

Germans like to recall the days of the 1920s Weimar Republic, and the the 1931 banking crises, which consequently, led to the Third Reich. The IMF approach is as good as the implications of the Chinese proverb... on boiling frogs slowly. But human beings are not frogs, or...are they?

The writer is a former educator based in Chicago

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