Banning cash so you pay the bank to hold your money is what the IMF wants


As the Federal Government moves to ban cash transactions above $10,000, there’s a theory gaining traction that the real motive for the cash ban isn’t the so-called “black economy”, but rather, to give authorities greater control over your behaviour during recessions.

Paying more than $10,000 in cash could make you a criminal under proposed law
This theory, put forward by economists such as John Adams — and picked up by some federal politicians — has not been plucked out of thin air.

It is based on repeated public papers and statements by the international body in charge of financial stability — the Washington-based International Monetary Fund (IMF).

A recent IMF blog entitled “Cashing In: How to Make Negative Interest Rates Work”, explains its motive in wanting negative interest rates — a situation where instead of receiving money on deposits, depositors must pay regularly to keep their money with the bank.

As the blog notes, during the global financial crisis central banks reduced interest rates.

Ten years later, interest rates remain low in most countries, and “while the global economy has been recovering, future downturns are inevitable”.

“Severe recessions have historically required 3 to 6 percentage points cut in policy rates,” the IMF blog observed.

“If another crisis happens, few countries would have that kind of room for monetary policy to respond.”

The article then goes on to explain that to “get around this problem”, a recent IMF staff study looked at how it could bring in a system that would make deeply negative interest rates “a feasible option”.

The answer, it said, is to phase out cash.

When cash is available, cutting interest rates into negative territory becomes impossible as cash acts as an ‘interest rate floor’.

The RBA says cash will become a niche payment sooner than we think, as the Government considers imposing tougher penalties on cash economy activity.

Cash acts as “an interest rate floor” as people hold cash when bank deposit interest rates are at zero.

The thought of paying the major banks to hold your money isn’t one that most consumers would jump at.

The alternative — as risky as it may be — is hoarding cash, or making investments in tangible commodities like gold.

So, the end game, the article explains, is the IMF’s ideal world — one without cash.

“Without cash, depositors would have to pay the negative interest rate to keep their money with the bank, making consumption and investment more attractive,” it said.

This, would “jolt lending, boost demand, and stimulate the economy”.

In other words, the central banks get greater control to influence your behaviour and economic outcomes.

For those who have faith in monetary policy and central banks, this is no problem.

But one year on from the banking royal commission, faith in our financial institutions — and the regulators who failed to police the banks’ bad behaviour — isn’t exactly at an all-time high.

Negative interest rates could affect Australia
This weird world where savers are penalised — and borrowers get paid — is no longer just a problem for central banks in Europe and Japan.

With the cash rate down to a fresh low of 1 per cent, Australia has entered what’s been dubbed the “era of irrationality, impotence and inequality”.

The Reserve Bank’s consecutive interest rate cuts in June and July have taken the cash rate to an historical low at just 1 per cent.

Put this together with Governor Philip Lowe’s comment on August 9 at a parliamentary hearing.

He was asked by Labor’s Andrew Leigh what work the Reserve Bank has done on what “unconventional monetary policy” might look like as Australia heads towards the zero lower bound of interest rates.

Dr Lowe answered: “I think it’s unlikely, but it is possible. We are prepared to do unconventional things if the circumstances warranted it.”

In answering some other questions Dr Leigh threw his way, Dr Lowe also noted that “monetary policy is less effective than it used to be”.

“Once upon a time, when we lowered interest rates people were very quick to run off to the bank to borrow more to spend,” he said.

“In today’s environment people don’t run off to the bank to borrow more when interest rates fall; they are more likely to pay back their mortgage more quickly.”

Dr Lowe also noted international political tensions are weakening the global outlook, “and it’s very hard for central banks to completely offset that”.

Retire at 55 and live to 80; work till you’re 65 and die at 67. Startling new data shows how work pounds older bodies.

Retirement Day

Here’s a very sobering piece from financial planner Alec Riddle, who looks at the relationship between how long you work and how long you’re likely to enjoy your retirement. Citing some interesting research, Alec argues that those who continue to work right up to the maximum retirement age tend to have shorter retirements than their peers who retire younger. This article will certainly make you think about your own retirement plans and strategy, especially if you’re like me and hoping to work until you’re 95.

Banking establishment lashes out at ‘effective’ opposition to cash ban

Australia’s corrupt banking establishment have used their cheap home-brand toilet paper, the Australian Financial Review, to attack the public opposition to the Morrison government’s $10,000 cash ban.

The sewer journalism by reliable bank shill Aaron Patrick, “Cash ban brings out the conspiracy theorists”, published on 13 September, was a panicked response to one thing, as AFR conceded: that the explosive public opposition to the cash ban has been “effective”.

Now’s the time to step up the fight. Members of Parliament who also oppose the cash ban, including one unnamed government MP reported by John Adams and Martin North on their Interests Of The People YouTube channel, are calling on Australians to redouble their efforts in calling MPs to object to this totalitarian policy.

Click here to watch “EXCLUSIVE: Government MP Will Oppose The Cash Ban!”

‘Conspiracy theories’

In his dishonest and lazy attack, Aaron Patrick tried desperately to belittle the opposition to the cash ban as based on conspiracy theories—specifically the link between cash restrictions and negative interest rates—and associate the opponents and media that have reported on it with “anti-Semitism” due to the leading role of the Citizens Electoral Council, which he smeared as believers in a “global Jewish banking conspiracy”. To fabricate his slur, Patrick refused to talk to the CEC, and in his written communication with CEC Research Director Robert Barwick he dishonestly did not ask about a “global Jewish banking conspiracy”, just a “global banking conspiracy”, and he deliberately did not print Barwick’s reply, which read:

“The major banks in Australia and around the world operate as a private cartel. The regulators and central banks in almost every country, including the BIS, are captured by the private banking cartel, and as the royal commission showed they ignore and cover for the banks’ crimes, allow their reckless speculation, and prop them up when they fail, at the expense of taxpayers and their customers. The global system is broken. Do you deny it?”

Patrick’s attack is not aimed at convincing the general public, who don’t read the AFR anyway. It’s aimed at intimidating people, whether other opponents of the cash ban, other journalists who report on it, or politicians who oppose it, whose views on the matter might overlap those of the CEC.

Questions for Aaron Patrick

Ironically, if Aaron Patrick thinks the tactic of guilt by association (let alone fabricating slurs) is legitimate, it raises much bigger questions for him:

Does Aaron Patrick stand by the AFR’s track record of deliberately covering up atrocious bank crimes by attacking the innocent victims whose lives have been destroyed by the banks, attacking other media outlets that have exposed bank crimes, and attacking the politicians who tried to inquire into bank criminality and who fought for the banking royal commission?

Did Aaron Patrick support AFR’s opposition to the banking royal commission?

Was Aaron Patrick surprised by the evidence of banking criminality that emerged from the royal commission? If so, why? Wasn’t it his job as a senior finance journalist to investigate and expose such criminality? If not, why did he and AFR cover up banking crimes by not reporting them?

These questions show Aaron Patrick is either an incompetent, lazy reporter, or a shameless propagandist for the criminal and predatory banks.

AFR certainly is the latter. After failing to stop the royal commission from being called, AFR’s 12 February 2018 editorial made this statement: “The financial sector royal commission … is fundamentally a political response to the core problem of dysfunctional politics, rather than of fundamental problems in Australia’s banks. … [T]here is no evidence of systemic corruption, criminality or even widespread unethical behaviour in Australia’s big banks.” (Emphasis added.)

Even in May 2018, by which time the revelations from the royal commission had proven AFR’s editors to have been complicit liars for the banks, Aaron Patrick attacked the hundreds of BankWest customers who had had the rug completely pulled out from under their lives when CBA mass-foreclosed on their business loans following its takeover of BankWest in the middle of the global financial crisis in 2008. Perhaps reflecting a rushed analysis due to its too-short inquiry period, the royal commission wrongly found that CBA had no case to answer, but Patrick seized on this one case to slander bank victims by using terms such as “lie” and “conspiracy theory”. Retired Sydney University political economist and veteran bank victims’ advocate Evan Jones, in a 19 June 2018 article for Independent Australia, described Patrick’s attack as “an exemplar of gutter press journalism”.

The real lie: the ‘black economy’

Clearly the main reason for the AFR’s hysterical attack on the CEC and other opponents of the cash ban is that the crooks at KPMG and the banks who want this ban hoped to avoid scrutiny, but now they can’t. And the problem they have is that under scrutiny, their claims are quickly proven to be bogus.

First, the claim that the cash ban is necessary to crack down on the black economy is a farce. The most authoritative study of black economies, by Medina and Schneider, shows that 1) Australia doesn’t have a serious black economy problem, being the 10th smallest of 158 countries; 2) the size of Australia’s black economy almost halved in 1991-2015, without any cash bans; and 3) near-cashless economies in Scandinavia, by comparison, have larger black economies than Australia does, and their black economies expanded after they went increasingly cashless. Click here for charts that prove this:

Second, the ulterior motive of restricting cash to trap people in banks so they can’t escape negative interest rates is hardly a conspiracy theory, as it comes directly from the International Monetary Fund, which was cited by the 2017 Black Economy Taskforce report that recommended the $10,000 cash ban.

Now’s the time to escalate the fight against this totalitarian policy:

Keep calling your MP and Senators, especially in the major parties to object to the law. Click here for contact details all Labor and cross-bench MPs and Senators; click here for contact details for all government MPs and Senators
Sign and share the petition: Stop Scott Morrison from banning cash to trap Australians in banks!

Europe should ignore ‘treacherous promises’ of Facebook’s Libra currency, says central banker


Wow! Here is a tough call, the pot calling the kettle black here. Who would you rather trust, the chief crooks at the top of the financial criminal racketeers or the company that sells your personal data and censors truth that does not benefit its paying advertisers?

New Zealand heads into monetary madness to save banks

The Reserve Bank of New Zealand (RBNZ) slashed its interest rate by a drastic 0.5 per cent (50 basis points) earlier this month, to 1 per cent. RBNZ governor Adrian Orr then declared that New Zealand was prepared to follow Japan, Sweden and other countries that have gone below zero into negative interest rates, and is also thinking about quantitative easing and helicopter money—basically the full suite of extreme measures to prop up the financial system. NZ already has the world’s most explicit and extreme “bail-in” system to take deposits to prop up failing banks, called Open Bank Resolution (OBR). They won’t admit it, but this sudden escalation in RBNZ’s actions and rhetoric is a strong indication that NZ’s authorities fear their economy is heading off a cliff.

As the Citizens Electoral Council documented in a 1997 issue of the New Citizen newspaper, New Zealand once enjoyed a diverse, productive economy with a strong manufacturing base that even included car production. Unemployment in the 1960s was not measured in percentages, but in absolute numbers, reaching a maximum of a few hundred people. The global wave of neoliberal vandalism that started with Margaret Thatcher ripped through NZ in the 1980s. Known as “Rogernomics” after Labour Party Finance Minister Roger Douglas, neoliberalism privatised and deregulated NZ’s economy to death, smashing its manufacturing base, but feeding a massive growth in financial services. NZ became a Pacific paradise for Wall Street and London investment banks, such as CS First Boston, which trained up personnel in a new, aggressive financialised economy, who were then exported around the world. A phalanx of Kiwi bankers took key positions in Australian and London banks, including Australia’s CBA and the UK’s RBS. RBNZ acquired a reputation as a strict enforcer of monetarist policies, fiercely “independent” of government control. The result of three decades of this approach? An economy concentrated in a few agricultural commodities such as dairy production, a massive property bubble in the major cities, and financial services.

Joe Wilkes is a British real estate and banking expert who lived through the panic of the global financial crisis in London, and moved to New Zealand a few years later with his Kiwi wife to raise their family. What Wilkes discovered in Auckland was exactly what he had experienced in London that had caused its real estate and financial crisis. For more than a year Wilkes has been a regular on Australia-based banking expert Martin North’s Digital Finance Analytics YouTube show, warning about the signs of impending disaster in New Zealand’s economy. Very similar to Australia, NZ’s major banks, which are owned by Australia’s, have recklessly lent seven, eight and more times income for mortgages in the major cities. In an 18 August DFA episode titled “Shock and Orr”, Wilkes reported that real estate sales volumes in the three major cities of Wellington, Christchurch and Auckland have fallen sharply in the last year, and the falls have been accelerating. Commenting on Adrian Orr’s panicked rate cut, Wilkes said he would have described it as “someone crapped the bed”.

While Adrian Orr wouldn’t admit RBNZ’s true motives, he is remarkably open about what the central bank is prepared to do, especially in comparison with the Reserve Bank of Australia and US Federal Reserve. Perhaps Orr is hoping to normalise the extreme measures under consideration, but they are far from normal. They include:

Negative interest rates. Orr emphasised in a 12 August interview with business reporter Bernard Hickey of online news service Newsroom that in countries with negative interest rates, like Sweden and Japan, “life continues, and monetary policy remains effective”. By effective, he means that it forces people to change the way they use their money: “[I]t makes people either bring spending forward or delay spending…. It also makes people think much harder about alternative investments.” Why it should be the central bank’s job to force people to change their behaviour like this, he doesn’t say—it’s a given.

Orr “belled the cat” on negative interest rates by noting that to make them work, you need to stop people from using cash. This connection between cash restrictions and negative interest rates is one that Australian authorities are trying to deny as they push ahead with a law to ban cash transactions over $10,000. They are lying. Orr suggested a way to “remove the arbitrage between negative interest rates and holding cash” (meaning how negative interest rates are an incentive for people to take their money out of the bank): “Let’s tax cash holdings, simple as that: we’re back to monetary policy as usual; people are disincentivised to be holding large lumps of physical cash; they are having to think harder about putting money to work.” He cited former IMF chief economist Kenneth Rogoff, who advocates removing large-denomination notes and other restrictions on using cash, to make negative interest rates work. RBNZ is conducting an inquiry into The Future of Cash, which is taking submissions until 31 August.

Quantitative easing (QE). Orr was reportedly more cautious about the electronic money-printing to buy government bonds that is known as QE, partly on the basis that there is a limited supply of NZ government bonds in circulation. This means that Orr believes the money-printing would need to be done on a massive scale to work. He expressed admiration for the way the Hong Kong Monetary Authority didn’t buy government bonds during the 2008 GFC, but printed money to buy private assets directly—no doubt fuelling the sky-high property prices that afflict Hong Kong today.

Mortgage-backed securities. In the context of discussing QE, Orr revealed the RBNZ was looking into establishing a permanent market for mortgage-backed securities. This is a dead giveaway that RBNZ’s real concern is for the property bubble. RBNZ’s intention is to be able to create money to buy up mortgage-backed securities from the banks, in order to shore up the bubble: “We’ve said, ‘well, let’s make sure that this market exists and it’s a normal part of our market’. And so, those different types of instruments that we can purchase to put cash out is great. So, you know, there’s mortgage-backed; there’s the government bonds; there’s a lot of different types of things if you need to be creative.”

Helicopter money. This idea was first put forward by the late monetarist economist Milton Friedman, proving that the supposed differences between monetarists and Keynesians is purely superficial. Friedman suggested cash could be dropped from a helicopter so people could pick it up and spend it to stimulate the economy. Orr endorsed the policy: “So being able to do the helicopter kind of money concept would just simply be around being able to inject cash into the system whichever way we chose to use a ‘helicopter’ … there’s nothing mystical or magical about it, it’s just a different instrument.” 

The extreme measures that RBNZ is planning bespeak an economy in crisis. They also demonstrate the NZ authorities’ preparedness to ride roughshod over the civil liberties of New Zealanders, in order to force them to conform to the emergency measures to save their banks. This is part of a broader assault on civil liberties in NZ, in the wake of the Christchurch massacre in March, especially in regard to censorship targeting the online dissemination of information. This has even affected the New Zealand shows on the DFA channel on YouTube, even though it is purely an economics discussion, and in no way related to radicalised content. But economic breakdown leads to a loss of political control, which is always the reason that authorities resort to extreme, totalitarian measures. As NZ is such a small country, these developments are hard to disguise, so outsiders should pay attention to what is happening there, because it is certain the same thinking is under way in other countries, especially in NZ’s close cousin across the ditch, Australia.

Click here to sign and share the petition, “Stop Scott Morrison from banning cash to trap Australians in banks!”.

Morrison is banning cash so Australians can’t escape bail-in, negative interest rates

The fight against “bail-in” is on! The Morrison government has released for consultation a new law that bans cash transactions over $10,000. The pretext for this law is to crack down on money laundering and tax evasion in the “black economy”. This is a shameless lie! The formal recommendation to ban cash comes from “big four” global accounting firm KPMG, which is an accomplice of the world’s biggest money launderers and tax evaders. The real purpose for the cash ban is to trap Australians in the banking system, so they cannot escape negative interest rates or having their bank deposits “bailed in”.

Scott Morrison first announced this measure in the 2018 budget, originally to come into force this month, but now scheduled for January 2020. It was recommended in the October 2017 Black Economy Taskforce Report by Michael Andrew AO (who died last month), a former chief of global accounting giant KPMG. The report revealed that the strategy is to: “Move people and businesses out of cash and into the banking system, which makes economic activity more visible, auditable and efficient.” (Emphasis added.) It gives the game away by noting that it may benefit “financial stability and the effectiveness of monetary policy”—code for policies like bail-in and negative interest rates. To achieve this it recommended: “Moving to a near cash free economy. A $10,000 economy-wide cash limit should be introduced.” But $10,000 is just the beginning: in June 2018, just after Morrison announced it, KPMG was already lobbying Treasury to lower the limit to $5,000 or even $2,000.

Deception and stealth

When Morrison released the exposure draft of his bail-in law in 2017, he did so on a Friday afternoon when there would be no media attention. Only a sharp-eyed CEC staffer spotted it and recognised it as bail-in, enabling the CEC to mobilise a massive nationwide campaign against it which continues to this day. The government is being equally sneaky with this law. Treasurer Josh Frydenberg quietly released the exposure draft of the legislation, called the Currency (Restrictions on the Use of Cash) Bill 2019, last Friday afternoon, 26 July, and has allowed only two weeks for public comment.

The exposure draft of the bill has two notable features:

  1. It bans ALL cash transactions over $10,000, enforced with a penalty of two years jail;
  2. Division 2 is blank, containing only the words “To be inserted”.

What is the government hiding by releasing an incomplete draft, on a Friday afternoon, and allowing only two weeks for public consultation?

The deception doesn’t end there. In its explanation of the law, the government has sought to make it palatable by emphasising that there will be exemptions to the cash ban, including depositing and withdrawing cash in banks, and, curiously, most consumer-to-consumer transactions, such as for a second-hand car. However, the exemptions are not in the legislation. They are in a separate regulatory instrument to be issued by the Minister after the legislation is passed. This means that they are not permanent, but that in the future, the Minister will be able to scrap the exemptions without requiring new legislation. This is the “salami tactic”: first pass the law in a form that is politically palatable, and then slice off key changes. In a bail-in scenario, for instance, under the current regulation people fearing bail-in may withdraw all of their money from the bank, but the Minister will be able to issue a new regulation that suddenly stops people from withdrawing more than $10,000.

Not about money laundering

This law is emphatically not about controlling money laundering and the black economy. The vast majority of money laundering and tax evasion is done by banks and corporations, not individuals. And who helps banks and corporations do it? The big four global accounting firms, including KPMG, whose boss Michael Andrew recommended this cash ban! The big four literally write the tax laws that enable corporations to evade tax, and dominate the offshore tax havens like the Cayman Islands that exist for tax evasion and money laundering. When Michael Andrew was the global boss of KPMG—the only Australian ever to lead the worldwide operations of a big four firm—two of KPMG’s biggest clients, British banks HSBC and Standard Chartered, were caught in 2012 by US authorities in massive money laundering operations. In other words, KPMG assisted its clients to launder money, but is using money laundering as the excuse to take away the rights of Australians to use cash!

The real reason: bail-in and negative interest rates

Money laundering and tax evasion are nothing new, that they would suddenly require this “solution”. What is new is the plunge in the public’s confidence in the banks, especially since the global financial crisis. But instead of properly reforming the banks to restore the public’s confidence, through policies such as Glass-Steagall, which separates normal banking from the financial gambling that causes crises, authorities around the world have resorted to insane and in fact criminal measures that further destroy confidence in the banks.

The two most egregious measures are the criminal bail-in policy and the insane move to negative interest rates; bail-in steals deposits to prop up failing banks, while negative interest rates force customers to pay to keep their money in the bank. Both are coming to Australia. Morrison snuck his bail-in law through the Senate in February 2018 with only eight senators present in the chamber and no recorded vote. The Reserve Bank of Australia has aggressively slashed interest rates to 1 per cent, and in the banking crisis that is brewing right now they will feel compelled to follow countries like Japan and Switzerland down past zero and into negative territory, as the International Monetary Fund is recommending.

Both bail-in and negative interest rates destroy confidence in the security of bank deposits, which motivates people to take their money out of the bank and hold it in cash. This is the experience in Japan and Europe. So like some European countries, Australia is banning cash to force people to use the banking system so they cannot escape these policies, under threat of two years jail.

Fascism is the use of state power to benefit private corporations; by definition, this is a fascist assault on the freedom of Australians to use cash and not private banks. The CEC is calling on all concerned Australians to demand the government scrap this law and reform the banking system instead!

What you can do

The government has allowed only two weeks for submissions, in order to avoid scrutiny. Don’t let them get away with it! We have until 12 August to swamp Treasury with letters and emails, demanding they drop this law. Write an email or letter today to the Treasury: state your objection to any law that removes your right to use cash, and demand the government restore confidence in the banking system by properly reforming the system, not by trapping people in the system so they can’t escape policies like bail-in.

Email: with the subject line:
Submission: Exposure Draft—Currency (Restrictions on the Use of Cash) Bill 2019

Address written submissions to:
Black Economy Division
Langton Cres
Parkes ACT 2600