Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 5
The "War on Cash" Thread; Can't Melt Away the Debt with Non-Existent Inflation? Just Confiscate Cash to Pay the Debt!
Topic Started: 19 Sep 2016, 10:14 AM (4,131 Views)
createdby
Default APF Avatar


Coming soon to a bank near you!


http://www.capitalandconflict.com/economics/the-orchestrated-cash-emergency/
The orchestrated cash emergency
15TH SEPTEMBER 2016DAN DENNING
Posted Image
A question to begin today’s letter: how do you turn an unpopular academic concept into an everyday legal reality for millions of people?

Think of this question in the spirt Jack Ryan tackled a similar problem in The Hunt for Red October. How do you get someone to want to get off a nuclear submarine?

You’ll know the answer when it comes to you. The mental trick is not trying to solve the problem directly. It’s creating the conditions in which people do exactly what you want them to of their own free will, with urgency. I’ll come back to that in a moment.

But first, as expected—given the positive retail sales figures reported earlier today by the Office for National Statistics—the Bank of England (BOE) has done nothing, more or less. The Bank’s monetary policy committee voted to leave the Bank Rate at 0.25%–still a 322-year low.

It also voted 9-0 to continue the Bank’s bond buying program, which consists of purchasing £60 billion in government bonds and £10 billion in corporate bonds. What does that mean? Have a look at the image below from the Bank’s website.
Posted Image
Source: Bank of England

Before its August 4th decision to purchase £70 billion more in bonds with money that never existed before, the Bank already had a sizeable portfolio of assets, also purchased with money that had never existed before. That’s £435 billion on the balance sheet, or about 24% of UK GDP.

The Bank’s QE program, in terms of GDP, is second only to the Bank of Japan’s. And today, I learned from Tim Price (via the latest edition of The Price Report) is that the BoE’s leverage ratio is also the second-largest in the world. The leverage ratio is the total assets divided by core capital. Both the BoE and the BoJ have leverage ratios of 120%.

Why does that matter? For a private sector firm, the higher your leverage, the easier it is for you to be rendered insolvent by a small fall in the value of your assets. That little fact has led many people to speculate how central banks could become insolvent in a sovereign bond crisis, given that government bonds make up the bulk of new central bank assets.

In theory, a central bank can never become insolvent. When you have a printing press, you just print more money to buy new assets to bolster the balance sheet. Sure, money isn’t capital. But when your cost of money is nothing, you can always buy high quality capital, right?

Maybe not right. But let’s leave that aside for the day. My main point is that Carney and company are already further out on a limb than many people would like to believe (or are aware of). Cancelling the increase in QE would have been the most bullish move the Bank could have made. Instead, like I speculated he would yesterday, the Bank ‘checked’ in the giant global game of currency poker.

The orchestrated emergency

All eyes now turn to the US Fed and the Bank of Japan. The Fed is likely to do nothing at all. It’s hinted at rate rises. But the data don’t support it. And Japan?

That’s where all the crazy happens. But let’s not talk about bond yields any more than they have to. The stirrings of revolt in the bond market—the resurrection of the bond vigilantes—have died down. It gave me time to go back and read a paper presented at the recent central banker pow wow in Wyoming.

I meant to read the paper last month. You can find it yourself here. It’s called, innocuously, ‘The case for unencumbering monetary policy at the zero bound.’ It’s by Marvin Goodfriend from Carnegie Mellon in Pittsburgh.

Don’t be deceived about the title. The paper is how about to implement a cash ban when you know people opposed to it. The key parts are sections 5a and 5c. And because you wouldn’t believe me if quoted from the paper, I’ve taken a screen shot from the paper and highlighted the relevant bits. Read it and weep.

Posted Image
Posted Image

You COULD make this up. But it’s getting harder and harder to stay one step ahead of the financial authoritarians. Right now, all of this is a text book academic discussion. It’s a template, a blue-print, a plan. But every good plan to take away freedom and liberty and exert more control requires a catalyst, a crisis that makes people the chains you’re going to shackle on them.

Back to the question at the top, then. How do you turn an unpopular idea into the law of the land?

You need to orchestrate a crisis. In this case, you need to give people a compelling and urgent reason for wanting to get rid of their cash and using an electronic currency card. How do you do it?

Come on!

Think about it. It’s not that hard. I’ll reveal the answer to you tomorrow.
Edited by createdby, 19 Sep 2016, 10:17 AM.
Profile "REPLY WITH QUOTE" Go to top
 
createdby
Default APF Avatar


Hm some protestations for the new RBA guvnor not to ZIRP or NIRP or engage in currency war.

Let's see, Phillip Lowe:
- was hired straight out of high school by the RBA
- never created a job or worked a real job all his life
- is part of the MIT cabal with Krugman as his doctoral thesis advisor

HOW ABOUT NO!



http://www.afr.com/markets/fund-managers-urge-rbas-lowe-not-to-play-in-global-currency-way-20160918-grivoi
Fund managers urge RBA's Lowe not to play in global currency way
Sep 19 2016 at 12:30 AM
Updated Sep 19 2016 at 12:30 AM
by Vesna Poljak

Posted Image
High-profile fund managers Hugh Giddy and Anton Tagliaferro from Investors Mutual have taken a stand against the pursuit of "extreme" monetary policy by asking new Reserve Bank of Australia governor Philip Lowe to resist participating in a currency war and stop cutting interest rates.

Their comments are provocative because equity investors typically benefit from the simulatory actions of central banks through rising asset prices. But the pair, who manage more than $7 billion, think that rate cuts have gone far enough. The cash rate is at a record low 1.5 per cent following former governor Glenn Stevens' two cuts this year despite growth being within its forecast range.

In an opinion piece published in Monday's Australian Financial Review, Mr Giddy and Mr Tagliaferro say their grievance is also one founded in notions of fairness.

"The current environment of excessively low interest rates around the world, including Australia, is punishing anyone who has painstakingly saved money for their retirement, while on the other hand it is perversely rewarding those who want to borrow heavily to buy what in many cases seem like inflated assets," they say.

"As the bastion of our financial system, is this the message that the RBA wants to transmit to the Australian people? That heavy borrowing is to be encouraged while saving should be discouraged?"

They also contend that low rates are failing in one of their key duties: they are not fostering investment.

"Instead what [policy easing] has done is keep alive inefficient businesses, as well as allowing companies to financially engineer their capital structures through share buybacks," the IML stockpickers say. A popular strategy of boosting shareholder returns on Wall Street has been for companies to borrow money at cheap rates to fund the purchase of their own stock, which raises earnings on a per share basis, and invites a higher share price, rewarding management and investors.

The allocation of capital is also distorted by the way risk is priced. Another problem identified by the pair is that negative interest rates and negative yields on bonds threaten the business models of life insurers, which have to manage liabilities measured decades in advance. Low interest rates inflate the value of future liabilities as well as eat away at the investment income insurers rely on.

Mr Giddy and Mr Tagliaferro also challenged comments made by Stanley Fischer, the vice-chairman of the United States Federal Reserve. The esteemed economist said the problems caused for savers by negative rates were negated by the uplift in equity prices.

But the fund managers say this "wealth effect" is overstated and is another example of low rates favouring a minority of asset owners.

Based on the last quarterly statement of monetary policy, the RBA forecasts growth in 2016 at 2.5 to 3.5 per cent. However, it does not target growth as part of its mandate. Real GDP was recorded at 3.3 per cent in the June quarter. Unemployment is benign at 5.6 per cent.

Dr Lowe's predecessor was more dissatisfied with inflation, which is below the bank's target band. There are lots of theories as to why inflation is low globally, including the drag of the collapse in energy prices, technology and deflationary conditions exported by China, which is lowering its currency, making its exports cheaper. In theory, lower rates are a way to lift consumer prices.

Economists say there are sound reasons for the RBA pursuing looser policy conditions and one of those is to stop the Australian dollar from rallying. If the expectation of rate cuts were removed, markets would push the Australian currency higher, hurting domestic exports such as tourism and causing sub-optimal growth.

There are plenty of dissenters when it comes to the path of modern monetary policy promoted by the Bank of Japan, the Fed and the European Central Bank. CEOs have complained that low interest rates make investors more short-term oriented; Neo Fisherian thinkers believe lowering rates backfired in causing inflation to cool down; and other investors argue central bank influence is too far-reaching to the point where they are growing to resemble "communist-lite" institutions.

The RBA has also revealed that should the economy get caught up in another financial crisis, it is willing to introduce new measures such as government or corporate bond purchases, if it does not have the option of taking interest rates any lower.



Edited by createdby, 19 Sep 2016, 12:22 PM.
Profile "REPLY WITH QUOTE" Go to top
 
createdby
Default APF Avatar


While India opted for the shock and awe method of herding cattle into the digital pen, Aussies sheeple are being prepared with a small dry run.


http://www.businessinsider.com.au/citibank-is-the-first-australian-bank-to-stop-taking-cash-2016-11

Citibank is the first Australian bank to stop taking cash
TONY YOO
NOV 9, 2016, 7:45 AM
Posted Image
Up is down and down is up. We are now living in a bizarre era when a bank will refuse to take cash.

Citibank Australia has become the first Australian bank to go completely cashless, notifying customers that its branches will no longer handle notes and coins from November 24.

“We have seen a steady decline in the demand for cash services in our branches — in fact less than 4% of Citi customers have used this service in the last 12 months,” said Citibank head of retail bank Janine Copelin.

“This move to cashless branches reflects Citi’s commitment to digital banking and we are investing in the channels our customers prefer to use.”

Copelin said that the move is not a precursor to branch closures.

“While the number of customers visiting our branches to access cash handling services has fallen, the branch network remains an important component of how we serve our high-net worth customers,” she said.

The Nordic countries lead the way in the move to a cashless society. The Guardian reported in June that 900 of 1600 Sweden’s bank branches do not accept cash. In Iceland, curbside hotdog carts accept credit cards.

In an email to customers, Citibank stated that “cheque requests and other teller services” will continue at Citibank branches. Customers are now directed to ATMs and Australia Post branches (with Bank@Post and PostBillPay capabilities) for cash transactions.

Deposit and mortgage account clients can also use National Australia Bank branches for cash services. Citibank’s agreement with Westpac to provide customers with fee-free usage of Westpac Group ATMs also remains in place.




Before you slaughter their savings
Posted Image
Profile "REPLY WITH QUOTE" Go to top
 
Jimbo
Member Avatar


createdby
19 Sep 2016, 10:14 AM
Coming soon to a bank near you!
The war on money started around 100 years ago when real money was replaced with bits of central bank issued paper with numbers printed on them.

Now, we are starting to get worried that these bits of paper will be withdrawn to be replaced with binary code stored in the ether?

You could argue that the war on money started when we stopped exchanging eggs for bread and appointed metals as a proxy (and you would be right.)

Give the people money and they will love you. Try to take it away from them and they will fight to the death. Slowly erode its value and call it "economics" and you can rob them into serfdom without being noticed.











Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
Profile "REPLY WITH QUOTE" Go to top
 
createdby
Default APF Avatar


Jimbo
17 Nov 2016, 07:31 AM
You could argue that the war on money started when we stopped exchanging eggs for bread and appointed metals as a proxy (and you would be right.)









There's plenty of evidence that credit systems (Giro banking, Code of Hammurabi, Mesopotamian clay tablets) preceded barter and coinage and other forms of commodity money and were more predominant.

In fact, barter is not as predominant as a medium of exchange than the various systems of credit or commodity monies developed in most human cultures throughout history.
Profile "REPLY WITH QUOTE" Go to top
 
Jimbo
Member Avatar


createdby
17 Nov 2016, 08:27 AM
There's plenty of evidence that credit systems (Giro banking, Code of Hammurabi, Mesopotamian clay tablets) preceded barter and coinage and other forms of commodity money and were more predominant.

In fact, barter is not as predominant as a medium of exchange than the various systems of credit or commodity monies developed in most human cultures throughout history.
I will buy your bread for four eggs but I only have three eggs on me at the moment so I will have to forego the exchange. See you next week.

Or

I will buy your house for one million zarg credits but I don't actually have any zarg credits at the moment so I will borrow them from the bank of zarg in the hope that wage and house price inflation will one day see me solvent again.

I will then buy ten houses with zarg credits which I have never earned and I will pay back less zarg credits due to the power of negative interest rates. I will earn enough zarg credits from renting these houses to enable me to retire in the island paradise of zali, forever.

Sounds good to me.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
Profile "REPLY WITH QUOTE" Go to top
 
Rufus
Member Avatar


createdby
17 Nov 2016, 05:32 AM
While India opted for the shock and awe method of herding cattle into the digital pen, Aussies sheeple are being prepared with a small dry run.


http://www.businessinsider.com.au/citibank-is-the-first-australian-bank-to-stop-taking-cash-2016-11

Citibank is the first Australian bank to stop taking cash
TONY YOO
NOV 9, 2016, 7:45 AM
Posted Image
Up is down and down is up. We are now living in a bizarre era when a bank will refuse to take cash.

Citibank Australia has become the first Australian bank to go completely cashless, notifying customers that its branches will no longer handle notes and coins from November 24.

“We have seen a steady decline in the demand for cash services in our branches — in fact less than 4% of Citi customers have used this service in the last 12 months,” said Citibank head of retail bank Janine Copelin.

“This move to cashless branches reflects Citi’s commitment to digital banking and we are investing in the channels our customers prefer to use.”

Copelin said that the move is not a precursor to branch closures.

“While the number of customers visiting our branches to access cash handling services has fallen, the branch network remains an important component of how we serve our high-net worth customers,” she said.

The Nordic countries lead the way in the move to a cashless society. The Guardian reported in June that 900 of 1600 Sweden’s bank branches do not accept cash. In Iceland, curbside hotdog carts accept credit cards.

In an email to customers, Citibank stated that “cheque requests and other teller services” will continue at Citibank branches. Customers are now directed to ATMs and Australia Post branches (with Bank@Post and PostBillPay capabilities) for cash transactions.

Deposit and mortgage account clients can also use National Australia Bank branches for cash services. Citibank’s agreement with Westpac to provide customers with fee-free usage of Westpac Group ATMs also remains in place.




Before you slaughter their savings
Posted Image
This story is quite funny.
Citibank don't have branches around Australia, just a handful in capital cities. They don't have tellers in their front line accepting cash deposits from local traders, that's not what they do. They have a relationship with the NAB for that.

Just have a look around in your city - do you see any Citibank branches and tellers accepting cash deposits? Never had that profile.

Sorry mate this one is a beat up, but there is a real story concerning large notes in India.
Take risks - if you win you will become wealthy, if you lose you will become wise
Profile "REPLY WITH QUOTE" Go to top
 
Foxy
Member Avatar
Zero is coming...

I agree. get rid of paper currency.

It is no longer needed.

And you want to stay one step ahead of authorities for what reason???

Sounds criminal to me...
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
Profile "REPLY WITH QUOTE" Go to top
 
createdby
Default APF Avatar


foxbat
17 Nov 2016, 10:39 AM
I agree. get rid of paper currency.

It is no longer needed.

And you want to stay one step ahead of authorities for what reason???

Sounds criminal to me...
Don't want my cash to be NIRPd, ZIRPd, or bailed-in when the banks crash for starters. Am I criminal for desiring that?
Profile "REPLY WITH QUOTE" Go to top
 
Trollie
Member Avatar


Jimbo
17 Nov 2016, 07:31 AM
The war on money started around 100 years ago









Yes and our standard of living is many times better than it was 100 years, so only an idiot would want to go back to the old standard.
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Free Forums. Reliable service with over 8 years of experience.
Learn More · Sign-up for Free
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 5



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy