CASH TO BECOME ILLEGAL
The US Federal Reserve has cut official interest rates for the first time since 2008 - and our own RBA is now under pressure to follow suit. Perhaps not next week but certainly I could see another two cuts before the end of this year taking us down to 0.5%. I think there's a real possibility that we will have negative interest rates
within the next few years (colloquially known as "ZIRP" or zero interest rate policy). Germany and Japan have already had negative bond rates for some years, it's not out of the question that this will make its way to official central bank rates around the world, perhaps even seriously negative interest rates of -4% or -5%.
Before anyone cries 'conspiracy' the International Monetary Fund has published a handy "to-do" guide for central bankers here
on making your economy into a negative interest rate one... so it's a policy being actively pursued in order to keep the global economy ticking over. The IMF has made a prescient call here - there's a number of aims with this policy:
- Get money out of banks and into productive assets (ie stock market, real-estate)
- Make money purely an electronic rather than physical thing so easier for the central bank to direct and control
- Kill 'black economy' activities by removing cash from circulation
The last point is really important because if the proletariat get wind of ZIRP then there's no need to keep money in the bank any longer and they'll all do the classic Italian lady down the road and stuff it under the mattress to protect it. Which segues neatly into this
bill currently before parliament here in good old Australia, restricting the use of cash as a payment method for many transactions - surely the first step to making cash illegal by restricting how it can be used. Follows similar legislation overseas including in the EU and India.
Anyone else get the idea we're about to enter an Orwellian nightmare? If they completely regulate the movement and uses of money then we're really in trouble, mark my words.