As we noted last week, one of the biggest problems for the Central Banks is actual physical cash.
The financial system is predominantly comprised of digital money. Actual physical Dollars bills and coins only amount to $1.36 trillion. This is only a little over 10% of the $10 trillion sitting in bank accounts. And it’s a tiny fraction of the $20 trillion in stocks, $38 trillion in bonds and $58 trillion in credit instruments floating around the system.
Suffice to say, if a significant percentage of people ever actually moved their money into physical cash, it could very quickly become a systemic problem.
Indeed, this is precisely what caused the 2008 meltdown, when nearly 24% of the assets in Money Market funds were liquidated in the course of four weeks. The ensuing liquidity crush nearly imploded the system.
Because of this, Central Banks and the regulators have declared a War on Cash in an effort to stop people trying to get their money out of the system.
One policy they are considering is to put a carry tax on physical cash meaning that your Dollar bills would gradually depreciate once they were taken out of the bank. Another idea is to do away with actual physical cash completely.
Perhaps the most concerning is the fact that should a “systemically important” financial entity go bust, any deposits above $250,000 located therein could be converted to equity… at which point if the company’s shares, your wealth evaporates.
ReplyDeleteFrom my perspective the dollar bill is worthless paper.If a country printed their own money then the dollar really would even more be worthless.Why do you think we kill leaders of other countries? they are a threat to that worthless dollar.America starts so many wars in disguise of terrorist,oil or any reason that the American people will fall for,but in the end it all boils down to keeping the dollar moving.Yes our kids are dying to make the rich,richer.When are you gonna wake up Americans?
and they get upset when THEY get robbed? f em
ReplyDeleteTry IT.
ReplyDeleteThey can't keep my money because I ain't got none in the banks. The only day they could get a piece of it is on pay day. Goes in and out in under 24 hours.
ReplyDeleteCashless society is on the way.
ReplyDeleteSo is totalitarianism.
ReplyDeletekeep cheering.
All you cheerleaders who think that, because your stock portfolio is kicking ace and your rental property is raking in the dollars, everything is just great, well, you are going to be some of the first to get it.
And by "it" I mean the first 30 rounds.
Keep cheering.