Europeans who want to take money into other countries will use the highest denomination currency notes. Some countries, like Italy, don’t like people taking money out of the country. Thus, they don’t print high denomination currency notes so that those who want to transport a substantial amount need a truck.
Earlier this year, some articles appeared that the large currency notes should be retired.
David Stockman wrote:
In a recent interview, Executive Board member Benoit Coeure said that “the ECB is assessing the fate of the €500 euro banknote, as concerns about its use in money laundering and crime grow and its usefulness for large payments comes into question” adding that “competent authorities increasingly suspect that they are being used for illegal purposes, an argument that we can no longer ignore.
The “illegal purpose” of course is to get the money out of the grubby hands of their greedy politicians. In May, the ECB announced that the €500 note would be retired in the EUM by the end of 2018. The time between the authorities floating trial balloons to get public opinion and implementation is getting shorter.
Another ECB member Yves Mersch stated that he would like to see “proof that high-denomination notes are used by criminals.”
Eliminating currency altogether is another step being considered in the EU, the US, and other areas. All transactions would be digital. That way, if you don’t vote for the right people, they can shut your life down…digitally.
In Europe, eliminating the €500 bill would remove 30% of all currency. In the US, if the $100 bill were eliminated, it would remove 78% of the value of all currency in the system.
On Feb. 17, Larry Summers joined the drive against paper currency. He is a former economic adviser to President Obama and ex-Treasury secretary. He says large currency notes aid “the work of criminals and terrorists.” The next step might be to say that anyone who carries some $100 bills will be suspected of being a terrorist.
He says that a million dollars in €500 bills weigh just 2.2 pounds, while the same amount of money in $20 U.S. bills weighs 50 pounds. Why does he mention $20 bills? He says the removal of the $50 currency bill should also be considered.
He criticized Luxembourg’s opposition to ending the €500 note, saying Luxembourg has a “long and unsavory tradition of giving comfort to tax evaders, money launderers, and other proponents of bank secrecy.”
Wow, that’s rather undiplomatic. How about the 100 other countries around the world that also have tax evaders and money launderers? He forgets that “money laundering” in many cases is nothing more than taking your own property, cash, out of one country and putting it into another country. Only politicians have made a normal practice a criminal activity.
Throughout several thousand years of history, dictatorial governments used to prohibit that. Just in the past few decades the US and others decided to make it a crime to transport or transfer your own money. History shows that the more oppressive a government becomes, the more the people want to move their wealth. But politicians don’t understand that.
Obviously, cash is used for the “underground” economy which wants to escape taxes. Going digital would cause a big increase in tax revenues. For those of us who pay taxes, that might look beneficial. The negative is that coercive government always gets more coercive.
France has banned cash transactions of €1,000 ($1,114) or more. Other countries considering the elimination of cash are Norway, Sweden, India, Israel, and China. France’s economy is now a mess.
Deutsche Bank’s CEO says that cash “probably won’t exist” 10 years from now.
Now there is a rapidly growing demand around the world for safes by homeowners, it’s amazing. You can’t even find a safe to buy in Japan anymore, demand is so high. People are storing cash at home, worried about their financial institution, and new governmental rules, putting their savings at risk.
Conclusion: accumulating large amounts of cash will backfire. Will gold be a good alternative? In the US and EU, if the flight to gold turns into a rush, prohibition on gold ownership might be imposed as was done in the 1930’s in the US.
But in Asia, that wouldn’t work and gold demand on that continent could be enormous in such a case. China is actually encouraging people to buy gold.
Silver monetary coins might be the better alternative for Americans. After WWII in Germany, stores didn’t want the paper currency. There was a serious shortage of all goods and a surplus of paper currency. But if you had the old, Austrian Maria Theresien Thaler coin (silver), the store owner would take you to the back room where the good merchandise could be bought.
Consider silver currency coins as your own safe haven. Digital currency is coming. It’s just a matter of time. And then we are all dependent on the goodwill of bureaucrats who can confiscate our wealth with a flip of the switch. Just look at the “Highway funding bill” H.R. 22, and what can happen to your passport.