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Hometown: Ann Arbor, Michigan
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Member since: Thu Sep 25, 2003, 02:04 PM
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Why TPTB Are Pushing Cashless Society: We Can’t Rein In Banks If We Can’t Pull Our Money Out of Them


Martin Armstrong summarizes the headway being made to ban cash, and argues that the goal of those pushing a cashless society is to prevent bank runs … and increase their control:

The central banks are … planning drastic restrictions on cash itself. They see moving to electronic money will first eliminate the underground economy, but secondly, they believe it will even prevent a banking crisis. This idea of eliminating cash was first floated as the normal trial balloon to see how the people take it. It was first launched by Kenneth Rogoff of Harvard University and Willem Buiter, the chief economist at Citigroup. Their claims have been widely hailed and their papers are now the foundation for the new age of Economic Totalitarianism that confronts us. Rogoff and Buiter have laid the ground work for the end of much of our freedom and will one day will be considered the new Marx with hindsight. They sit in their lofty offices but do not have real world practical experience beyond theory. Considerations of their arguments have shown how governments can seize all economic power are destroy cash in the process eliminating all rights. Physical paper money provides the check against negative interest rates for if they become too great, people will simply withdraw their funds and hoard cash. Furthermore, paper currency allows for bank runs. Eliminate paper currency and what you end up with is the elimination of the ability to demand to withdraw funds from a bank.


In many nations, specific measures have already been taken demonstrating that the Rogoff-Buiter world of Economic Totalitarianism is indeed upon us. This is the death of Capitalism. Of course the socialists hate Capitalism and see other people’s money should be theirs. What they cannot see is that Capitalism is freedom from government totalitarianism. The freedom to pursue the field you desire without filling the state needs that supersede your own.

There have been test runs of this Rogoff-Buiter Economic Totalitarianism to see if the idea works. I reported on June 21, 2014 that Britain was doing a test run. A shopping street in Manchester banned cash as part of an experiment to see if Brits would accept a cashless society. London buses ended accepting cash payments from July 2014. Meanwhile, Currency Exchange dealers began offering debt cards instead of cash that they market as being safer to travel with. The Chorlton, South Manchester experiment was touted to test customers and business reaction to the idea for physical currency will disappear inside 20 years.

France passed another Draconian new law that from the police parissummer of 2015 it will now impose cash requirements dramatically trying to eliminate cash by force. French citizens and tourists will then only be allowed a limited amount of physical money. They have financial police searching people on trains just passing through France to see if they are transporting cash, which they will now seize. Meanwhile, the new French Elite are moving in this very same direction. Piketty wants to just take everyone’s money who has more than he does. Nobody stands on the side of freedom or on restraining the corruption within government. The problem always turns against the people for we are the cause of the fiscal mismanagement of government that never has enough for themselves.

In Greece a drastic reduction in cash is also being discussed in light of the economic crisis. Now any bill over €70 should be payable only by check or credit card – it will be illegal to pay in cash. The German Baader Bank founded in Munich expects formally to abolish the cash to enforce negative interest rates on accounts that is really taxation on whatever money you still have left after taxes.


Complete abolition of cash threatens our very freedom and rights of citizens in so many areas.


Paper currency is indeed the check against negative interest rates. We need only look to Switzerland to prove that theory. Any attempt to impose say a 5% negative interest rates (tax) would lead to an unimaginably massive flight into cash. This was already demonstrated recently by the example of Swiss pension funds, which withdrew their money from the bank in a big way and now store it in vaults in cash in order to escape the financial repression. People will act in their own self-interest and negative interest rates are likely to reduce the sales of government bonds and set off a bank run as long as paper money exists.

Obviously, government and bankers are not stupid. The only way to prevent such a global bank run would be the total prohibition of paper money. This is unlikely, both in Switzerland and in the United States because the economies are dominated there by a certain “liberalism” to some extent but also because their currencies also circulate outside their domestic economies. The fact that but the question of the cash ban in the context of a global conference with the participation of the major central banks of the US and the ECB will be discussed, demonstrates by itself that the problem is not a regional problem.

Nevertheless, there is a growing assumption that the negative interest rate world (tax on cash) is likely to increase dramatically in Europe in particular since it is socialism that is collapsing. Government in Brussels is unlikely to yield power and their line of thinking cannot lead to any solution. The negative interest rate concept is making its way into the United States at J.P. Morgan where they will charge a fee on excess cash on deposit starting May 1st, 2015. Asset holdings of cash with a tax or a fee in the amount of the negative interest rate seems to be underway even in Switzerland.


The movement toward electronic money is moving at high speed and this says a lot about the state of the financial system. The track record of the major financial institutions is nearly perfect – they are always caught on the wrong side when a crisis breaks, which requires their bailouts. The fact that we have already seen test runs with theory-balloons flying, the major financial institutions are in no shape to withstand another economic decline.

For depositors, this means they really need to grasp what is going on here for unless they are vigilant, there is a serious risk of losing everything. We must understand that these measures will be implemented overnight in the middle of a banking crisis after 2015.75. The balloons have taken off and the discussions are underway. The trend in taxation and reduction of cash seems to be unstoppable. Government is not prepared to reform for that would require a new way of thinking and a loss of power. That is not a consideration. They only see one direction and that is to take us into the new promised-land of economic totalitarianism.

People can’t pull cash out of their bank accounts – for political reasons, because they’ve lost confidence in the bank, or because “bail-ins” are enacted – if cash is banned. The Financial Times argued last year that central banks would be the real winners from a cashless society:

Central bankers, after all, have had an explicit interest in introducing e-money from the moment the global financial crisis began…


The introduction of a cashless society empowers central banks greatly. A cashless society, after all, not only makes things like negative interest rates possible, it transfers absolute control of the money supply to the central bank, mostly by turning it into a universal banker that competes directly with private banks for public deposits. All digital deposits become base money.

The Government Can Manipulate Digital Accounts More Easily than Cash

Moreover, an official White House panel on spying has implied that the government is manipulating the amount in people’s financial accounts. If all money becomes digital, it would be much easier for the government to manipulate our accounts. Indeed, numerous high-level NSA whistleblowers say that NSA spying is about crushing dissent and blackmailing opponents … not stopping terrorism. This may sound over-the-top … but remember, the government sometimes labels its critics as “terrorists“. If the government claims the power to indefinitely detain – or even assassinate – American citizens at the whim of the executive, don’t you think that government people would be willing to shut down, or withdraw a stiff “penalty” from a dissenter’s bank account? If society becomes cashless, dissenters can’t hide cash. All of their financial holdings would be vulnerable to an attack by the government.

This would be the ultimate form of control. Because – without access to money – people couldn’t resist, couldn’t hide and couldn’t escape.

HOMAGE TO ELIZABETH: Behind Sen. Elizabeth Warren’s Treasury takedown



What Happens When You Hand Over Your Gold To The Bank Of England For "Safekeeping"


When Nazi Germany annexed the Czechoslovak border province of the Sudetenland in September 1938, it immediately absorbed a good part of the country’s banking system as well as most of Czechoslovakia’s strategic defenses. By then the country’s national bank had prudently transferred most of its gold abroad to two accounts at the Bank of England: one in the name of the BIS, and one in the name of the National Bank of Czechoslovakia itself. (Countries had deposited some of their gold reserves in a sub-account at the BIS account in London to ease gold sales and purchases.) Of the 94,772 kilograms of gold, only 6,337 kilograms remained in Prague. The security of the national gold was more than a monetary issue. The Czechoslovak reserves, like those of Republican Spain, were an expression of nationhood. Carved out of the remains of the Austro-Hungarian Empire in 1918, the Czechoslovak Republic was a new and fragile nation. A good part of the gold had been donated by the public in the country’s early years. Josef Malik, the governor of the national bank, and his fellow Czechs believed that, even as the Nazis’ dismembered their homeland, if the national gold was safe, then something of the country’s independence would endure.

They were wrong. The Czechoslovaks’ faith in the probity of the BIS and the Bank of England was tragically misplaced. The gold was sacrificed, with barely a second thought, to the needs of transnational finance and the Third Reich. The Nazis’ first demand came in February 1939 when Berlin ordered Prague to transfer just over 14.5 metric tons of gold, supposedly to back the German currency now circulating in the Sudetenland. This was certainly an innovative idea— first invade a neighboring country, annex part of it, and then demand that the newly truncated state supply the gold to pay for the loss of its territory.

The following month the question became academic. On March 15 the Wehrmacht marched into Prague. The German protectorate of Bohemia and Moravia was declared, and Czechoslovakia no longer existed. But the gold reserves did. Three days later a Reichsbank official was dispatched to the National Bank of Czechoslovakia and ordered the directors, under the threat of death, to issue two orders. Thanks to diligent detective work by Piet Clements, the BIS archivist, we have a clear picture of what happened next. The first order instructed the BIS to transfer the 23.1 metric tons of Czechoslovak gold held at the BIS account at the Bank of England to the Reichsbank BIS account, also held at the Bank of England. The second order instructed the Bank of England to transfer almost 27 metric tons of gold held in the National Bank of Czechoslovakia’s own account to the BIS’s gold account at the Bank of England.

Malik and his fellow directors hoped that it would be obvious that the instructions had been issued under duress and so would not be implemented. The Nazis had just invaded Czechoslovakia and would obviously target the national gold reserves. But Malik had not reckoned on Montagu Norman. The governor of the Bank of England had no interest in whether Czechoslovakia was free or a Nazi colony. “Political” considerations must not affect the BIS’s transactions. The transfer order, he said, must go through.

Meanwhile, in Basel, Johan Beyen, the Dutch president of the BIS, wavered. Beyen discussed the matter with the BIS’s legal adviser, Felix Weiser. But like Norman, Weiser took the most formalistic approach possible. As long as the paperwork was in order, the monies must go through. Weiser argued, somewhat bizarrely, that there could be no legal grounds to claim that the transfer order had been issued under duress, as such a plea could be brought before a Swiss court only by the persons who had acted under duress. Clearly, the directors of the National Bank of Czechoslovakia were unlikely to travel to Switzerland to present their case. Therefore any decision not to authorize the transfer would be one of BIS policy, rather than administration. The board of the BIS made policy. Thus Beyen would have to consult the board to stop the payment. (This was poor advice for another reason— under the terms of the BIS statutes the Swiss authorities anyway had no jurisdiction over gold transfers between states.)

Beyen was unwilling to take a decision without authorization. But who could he ask? The chairman of the BIS board, Sir Otto Niemeyer, of the Bank of England, was traveling to Egypt and so was incommunicado. At 6 p.m. on March 20, Roger Auboin, the bank’s general manager, told Beyen that the governor of the Bank of France had discussed the matter with London. The Bank of England and the Bank of France would not be taking any action to stop the transfer, because they felt that there were no grounds for action. The BIS transfer order went through.

With London, Paris, and Basel’s compliance, Nazi Germany had just looted 23.1 metric tons of gold without a shot being fired.


Source: TOWER OF BASEL: The Shadowy History of the Secret Bank that Runs the World by Adam LeBor.

The Age of Drone Vandalism Begins With an Epic NYC Tag



In the early hours of Wednesday morning, the age of robotic graffiti was born. KATSU, a well-known graffiti artist and vandal, used a hacked Phantom drone to paint a giant red scribble across Kendall Jenner’s face on one of New York City’s largest and most viewed billboards. By all accounts, it is the first time that a drone has been deployed for a major act of public vandalism.

In April last year, KATSU made headlines when he demonstrated that he had figured out how to attach a spray can to an off-the-shelf DJI Phantom drone. At the time, he was only using the drone to paint canvasses for white-wall galleries. But he assured the world that soon he would take his mad invention out into the streets and create enormous tags in places that were previously inaccessible to even the most daring and acrobatic taggers. Now, he appears to have made good on his promise in grand fashion...

Nepal Earthquake Shrank Mount Everest, Lifted Areas Near Kathmandu 3 Feet


Nepal's massive 7.8-magnitude earthquake transformed the land that was shaken by the natural disaster, pushing areas near the city of Kathmandu higher in elevation and making Mount Everest slightly shorter.

It won't be enough to unseat Everest as the world's tallest peak, but according to studies performed after last weekend's temblor, the mountain is now an inch shorter than before the quake. On the other hand, some locations just outside Nepal's capital city of Kathmandu were lifted 3 feet higher than before the tragic event, the study also found...

...Tim Wright, geophysicist at the University of Leeds in the U.K., told Live Science that the region lifted by the earthquake was some 75 miles long by 30 miles wide. The biggest lift occurred just 10 miles outside of Kathmandu, he added, which contributed to the widespread damage in the city.

Geoscience research consortium UNAVCO confirmed the 1-inch shrink in Everest to Live Science, explaining that the mountain's slump occurred when the crust relaxed in areas north of the epicenter when the Earth released strain following the quake. On the other hand, the report added, the Himalayas are rising about four-tenths of an inch every year, so the deficit won't last long....

Weekend Economists “Try not. Do… or do not. There is no try.” May 1-3, 2015


100 Quotes From ‘Star Wars,’ In Order Of Awesomeness, by Oliver Miller


…And by “quotes from Star Wars,” I of course mean the three real Star Wars movies, and not the prequels, which I still haven’t fully recovered from. Seriously; the prequels — I have no words. I am speechless. I have no words. And now they’re making three more Star Wars movies. Maybe it’s time to ask ourselves: how many Star Wars movies do we need, exactly? This seems like an important question to be asking. Maybe three Star Wars movies is good? I’m good with that. Anyway, maybe stop with three and someone call Disney about that and get on the horn with them and tell them to stop.

…ANY-way, Star Wars. Which was once the best thing ever and which could be again, if we stop making new movies. …Star Wars, which so profoundly influenced my worldview that I don’t even know how to think about life without these wacky movies with glowing space-swords and things. Anyway, here are some quotes from the three good movies. And hey, and also; you can read other dumb lists of quotes, ohhh, let’s see — right here, here, sort of here but not really, here, and here. (SEE OP FOR LINKS, IF YOU ARE INTERESTED--DEMETER)

Yes, long ago and far away, in a distant galaxy, a generation was born to strive, to right the wrongs of history. Then Emperor Reagan happened. Our ship of state was knocked off course, spinning, lost in space...and so 30 years and more passed. And here we are...without a Jedi Knight in sight. Except for the one in exile in Moscow. And a few shadowy resistance groups...

I don't know about you, but I'm ready to kick some Empire ass!

Post them if you've got them: politics, economics, Star Wars....

And come Monday, May the 4th be with you!

Washtenaw County asks judge to freeze big discrimination verdict while it pursues appeal


Washtenaw County is appealing a nearly $1.2 million verdict in favor of a Muslim man who said he was called a terrorist and repeatedly passed over for promotions. The verdict was returned in 2014 but it took more than a year to settle post-trial issues in the case of Ali Aboubaker.

Detroit federal Judge Denise Page Hood declined to overturn the result. Washtenaw County now wants her to freeze the case while it appeals the award.

Aboubaker worked for Washtenaw County for 17 years until 2008. The native of Tunisia says he was demoted and bypassed for promotions despite having engineering skills and college degrees.

Aboubaker says the treatment got worse after 9/11. The county denies any bias and says Aboubaker wasn't qualified to be drain inspector.

This Is How Fast America Changes Its Mind

Eleven years after Massachusetts became the first state to allow same-sex couples to marry, the Supreme Court on April 28 will hear arguments about whether to extend that right nationwide. The case comes amid a wave of gay marriage legalization: 28 states since 2013, and 36 overall. Such widespread acceptance in a short amount of time isn't a phenomenon unique to gay marriage. Social change in the U.S. appears to follow a pattern: A few pioneer states get out front before the others, and then a key event—often a court decision or a grassroots campaign reaching maturity—triggers a rush of state activity that ultimately leads to a change in federal law.

We looked at six big issues—interracial marriage, prohibition, women’s suffrage, abortion, same-sex marriage, and recreational marijuana — to show how this has happened in the past, and may again in the very near future.

GRAPHICS AT LINK: http://www.bloomberg.com/graphics/2015-pace-of-social-change/

How Two Billionaires Are Remaking Detroit in Their Flawed Image


Jerome Robinson only got to live in the home of his dreams for five years before he was told to leave... when a Section 8-funded apartment in a Downtown building for the elderly opened up in 2007, he jumped at the opportunity.

“I thought, This is where I’m going to live until I die,” Robinson said. “I have bad eyes. I can’t drive. But I could go anywhere in the city I wanted from there. The bus was down the street, my bank was around the corner.”

Downtown Detroit is home to dozens of vacant buildings, but in 2013 developers set their eyes on 1214 Griswold, where Robinson and more than 100 other seniors lived. The developers, Broder & Sachse, wanted to convert the building into luxury condos. They told the residents they had to be out within the year.

As Detroit’s government has been hollowed out by forces beyond its control—emergency management, a fleeing tax base, cuts to federal funding—a small group of rich investors have descended on the city, filling in public sector gaps with personal funds, and remaking Detroit in their image. On top of this, local politicians—like Democratic Mayor Mike Duggan and Republican Governor Rick Snyder—as well as national media, have become enamored with these men, painting them as philanthropists on a mission to rescue Detroit.

Dan Gilbert, billionaire chairman of the mortgage company Quicken Loans, owns over 70 buildings Downtown and has been heralded as Detroit’s “new Superhero” and “missionary.” Mike Ilitch, the billionaire owner of Little Caesars Pizza, convinced the state to give him hundreds of millions for a new hockey arena because he has the “boldest” and “most innovative” plans for Detroit in decades (not because he’s grifting a poor state for personal profit).

If you read these stories, and only these stories, you’d be convinced that just months after emerging from a bankruptcy in which city workers had their pensions slashed and city department budgets were cut even further to the bone, Detroit is back. But beyond the new and restored gleaming skyscrapers of Downtown Detroit, and the puff pieces they inspire, is a grimmer reality. The rest of Detroit has become a wasteland. Areas like Jefferson Chalmers, Delray, and 8 Mile have been ravaged by foreclosures on houses with mortgages that banks should’ve never made; pockmarked by foreclosures on houses owned by people who owe just a few hundred dollars in taxes to the county, which is just now beginning to clamp down on past-due bills, threatening residents with evictions; and slowly left to rot by corporations who couldn’t figure out how to pay people a living wage and remain in business. As Downtown and Midtown gleam and bustle, residents of Detroit’s outer neighborhoods are fleeing. And instead of helping these people, the city seems to be courting those who need help the least—the Gilberts and the Ilitches, moneyed barons who can afford to buy up Detroit without regard for the people who made the Motor City what it is.

What Detroit is doing is not about indifference to the poor, but to the active support of projects that stand to benefit the rich the most. MORE

Peter Moskowitz is a writer based in New York. He’s writing a book about gentrification.

10 things I want to teach my autistic son before he goes to college


Since he was old enough to walk, my son, Archer, has gone in circles. He was diagnosed with an autism spectrum disorder at age 2; his earliest symptoms included a tendency to spin his toys. When he became ambulatory, Archer started spinning his own body — not in a "whirl around until dizzy" way, but in quick jumps and turns, while pacing back and forth and talking to himself in a barely audible singsong.

Archer is 13 now, taller than his mother, and he's still half-walking and half-running in tight ovals, carrying on hushed conversations with himself. At first glance, most anyone would see Archer as a typical teen. In the back seat of my car on the way to school, he sprawls out, iPad or iPhone in hand, looking like a loosely assembled collection of limbs. Then he hops out, straps on his backpack, and does an awkward half-sprint to the junior high courtyard, in the unselfconsciously uncool way common to so many of the autistic and people with Asperger's.

A few weeks ago I picked him up after class, and we went through our regular routine, where he tells me, period by period, what he did that day. One advantage to having a communicative, detail-oriented autistic child is that my wife and I hear a lot more about what happens at school than most parents of teenagers do...

Here's number one: at some point I have to tell him he can't pace and spin and mumble in public or people will think he's crazy....Autistic spectrum disorders present as a collection of tics and social handicaps, which vary from person to person. The severely autistic are often nonverbal, and can spend hours each day rocking back and forth and humming, in their own worlds. But even the "high-functioning" — like my son — exercise self-stimulating behavior called "stimming." Some flap their hands, or fidget with a favorite object. Others make guttural noises, producing vibrations in their heads that drown out other sounds.


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