Cross post: John Adams We must resist the war on cash

Australians must resist the international war on cash.

Across the world, a major effort is underway, led by international financial institutions, to reduce the ability of citizens holding large denominations of physical currency notes thereby encouraging them to hold money in digital accounts.

To date, several governments have begun taking steps to limit the issuance and use of physical cash within their countries.

This includes the Indian Government which in November abolished almost 90 per cent of all physical cash as legal tender within India and the Swedish Government which has limited the quantum of physical cash within Sweden to just 2 per cent of gross domestic product.

Moreover, across Europe, several countries have begun to place limitations on cash transactions including France and Italy who have banned cash transactions over 1000 euros or Spain who has banned cash transactions over 2,500 euros.

Australians are not immune from these developments.

Following recent calls by multinational finance companies, UBS and HSBC, for the Australian Government to abolish the Australian hundred dollar note, the Turnbull Government will announced as part of MYEFO next week the establishment of a taskforce to examine this issue and whether to implement a ban on cash transactions above a certain limit.

UBS’ rationale for their proposal is that removing the hundred dollar note would reduce crime and fraud in Australia, allow banks to hold more deposits and increase taxation revenue collected by the federal government through greater transparency and a reduction in the ‘black market economy’.

However, these explanations do not provide the full story.

According to the International Center for Monetary and Banking Studies’ 2016 Geneva Report, the drive towards a cashless society is to provide central banks greater flexibility to operate with negative interest rates.

As is currently the case in Europe, negative interest rates imposed by the European Central Bank effectively require depositors to pay financial institutions a fee to keep their money as deposits. This punishes depositors and pushes them to often acquire inflated and risky assets in order to avoid their savings being consumed by their bank.

Europeans who are avoiding this trap are doing so by withdrawing their money from the banking system and hoarding physical cash, thus rendering negative interest rates as an ineffective policy tool.

Alternatively, contrarian economists have warned that the war on cash is designed to deny depositors from having access to their money in a financial crisis, thus allowing financial institutions to use depositors’ money to recapitalise when under financial stress or what is referred to as a ‘bail‑in’.

Such economists point to the 2012 Cyprus banking crisis in which, as a result of a run on the Bank of Cyprus, 47.5 per cent of uninsured deposits above 100,000 euros were confiscated by the bank and mandatorily converted into equity through a banking restructure.

Citizens who are not able to access physical cash in times of systemic financial stress will be susceptible to such manoeuvres.

There may be significant unintended consequences if the Turnbull Government were to follow Australia’s international counterparts by abolishing the hundred dollar note or placing restrictions on cash transactions.

Doing so could prove to be counterproductive as it may reduce confidence in the banking system leading to Australians either hoarding Australian dollars of smaller denominations, foreign currency or even precious metals such as gold or silver to preserve their wealth.

It may also reduce confidence in government institutions who may have the legal power to access all electronically recorded financial transactions of individuals who become a person of interest whether appropriate or not.

The international drive towards a cashless society is well underway.

Australians must remain vigilant against any attempts to limit their economic freedom and privacy through a transfer of economic power to an already powerful international financial sector and an ever-intrusive government.

John Adams is a former Coalition Advisor. This op-ed first appeared in the Daily Telegraph.

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84 Responses to Cross post: John Adams We must resist the war on cash

  1. rickw

    Across the world, a major effort is underway, led by international financial institutions, to reduce the ability of citizens holding large denominations of physical currency notes thereby encouraging them to hold money in digital accounts.

    The war on ordinary citizens continues unabated.

  2. Confused Old Misfit

    It should be a *Human Right* to be able to hold the physical manifestation of ones efforts in ones own hands.

  3. Bruce of Newcastle

    UBS’ rationale for their proposal is that removing the hundred dollar note would reduce crime and fraud in Australia, allow banks to hold more deposits

    So they’ve fixed the skimming problem have they? I don’t think so.

    I keep my card in a Faraday sleeve to limit skimming and line my wallet with alfoil. Any fraudster could lurk at the entrance of Coles and Woolies and rack up hundreds of card details from tap-n-go customers.

    And as for keeping money in bank accounts the guarantee for deposits is $250,000, beyond which the government can confiscate your money if the bank gets into trouble. Some guy called Malcolm Turnbull suggested lowering that limit to $100,000. Not many ordinary people would have that amount of money but quite few businesses will.

    I wonder why the population has so little trust in government? It’s a mystery.

  4. Tom

    The war on ordinary citizens continues unabated.

    Indeed. It is going to be a long war to regain control of our institutions, even those private capitalist institutions in the thrall of big government.

    According to the International Center for Monetary and Banking Studies’ 2016 Geneva Report, the drive towards a cashless society is to provide central banks greater flexibility to operate with negative interest rates.

    Bright red flag.

    One of the causes of current low interest rates is big government crowding out the private economy, I’d argue. The banks are trying to develop a mechanism to thrive when the economy is strangled by the bloated size of government. Brought to you by the corrupt doctrine of Keynesianism, the Islam of economics.

  5. Snoopy

    Negative interest rates plus a Tobin tax. Turnbull’s wet dream.

  6. Squirrel

    Beyond the very important points made above about the specifics of this latest joint effort by big government and (some) big businesses, is the truly depressing alacrity with which our Government – still parading under the name “Liberal” – falls predictably and dutifully in line with yet another encroachment, without even a public hint of hesitation.

    It’s almost as if there is a political death-wish – a zombie-like march by well-trained and carefully selected apparatchiks of the left and the faux right – all mouthing the same glib, reality-denying, truth-denying platitudes, all with their eyes on the glittering prizes and the comfortable post-politics sinecures. Nothing could be better calculated (to borrow a borrowed phrase) to add to the swelling ranks of the Down Under Deplorables.

  7. miltonf

    Good article. I think the original idea behind Paypal was to make financial transactions more private and free of government snooping. Bitcoin too I think.

  8. Roger

    PHON should run hard with this.

  9. Geoffrey Luck

    Fifteen years ago when living in Italy, my bank, the Monte dei Paschi di Siena deducted a government tax on deposits, so I was obliged to keep our funds abroad and bring in only as needed. I didn’t trust the MPS then, and look what’s happened to it now. This too could befall Australia.

  10. .

    Gold is money. It always was and always will be.

  11. Baldrick

    And here I was thinking Kelly O’Dwyer’s foray into cracking down on cash payments and looking at scrapping the $100 note was somehow related to improving the budget bottom-line.
    Silly me.

  12. struth

    If this was global warming it would be called a tipping point.

  13. Art Vandelay

    The “war on cash” is a short-sighted, stupid, anti-liberty policy is that is being pushed by the economically illiterate.

    Thus, I expect the Liberals will be all for it.

  14. jupes

    I get the evil intentions of this but like most things, I don’t believe this government is competent enough to make it work.

    For example, my standard cash withdrawal is $500. This always comes in $50 notes. Always.

    Coincidentally I had a spot of plumbing done the other day. Guess what, it came to $150.

  15. Michel Lasouris

    Well, I guess we had better start thinking about an alternative of ‘cash’ . Most value retaining articles ( eg diamonds and gold) are difficult to turn into currency quickly, and the bit-coin is not trusted except by the most gung-ho among us.
    Any ideas folks?

  16. mem

    “Well, I guess we had better start thinking about an alternative of ‘cash’ . Most value retaining articles ( eg diamonds and gold) are difficult to turn into currency quickly, and the bit-coin is not trusted except by the most gung-ho among us.
    Any ideas folks?”

    You could always try carbon credits. I hear our own Lord Waffleworth is all it.

  17. john constantine

    It has already been pointed out by an economist from a digital bank that in Australia, the fiddy dollar note is the way the cash economy circulates, while the hundy is the note packed away as a store of taxfree value.

    Therefore the fiddy must die in order that the phantasy of an eternally downtrodden and utterly monitored and controlled prole class may live.

  18. Rabz

    Passable post, Adams.

    So I trust you’re doing your bit to rid of these totalitarian twats who would free us of our cash?

    Or are you just another allegedly disinterested observer?

    If you are, you’re part of the problem, not the solution.

  19. Roger

    Gold is money. It always was and always will be.

    In a stable society, yes.

    In a time of social and economic collapse, not so much.

  20. hzhousewife

    Well, I guess we had better start thinking about an alternative of ‘cash’ . Most value retaining articles ( eg diamonds and gold) are difficult to turn into currency quickly, and the bit-coin is not trusted except by the most gung-ho among us.
    Any ideas folks?

    Hubby is a pretty good bush mechanic = we put a butchered lamb into the freezer today. My massages are traded for fresh veg over the year, no need for cash. At Xmas party last weekend friend asked me to re-create her fave dress, now a size small and worn almost out, but very pretty and she loves it. I can draft pattens and sew, she makes lovely hors d’ouvres so I will call in her help when I host a party next autumn. I have a few 50’s in the undies drawer – I’ll sub them for 20’s over the next year. Stuff the gov’t, I’m agin ’em.

  21. .

    In a time of social and economic collapse, not so much.

    Quite the opposite.

  22. Rabz

    massages are traded for fresh veg over the year, no need for cash

    HZ – interesting.

    The barter economy thrives when cash transactions are “difficult”.

    Nice work, keep it up.

    It’s a primitive mechanism, nonetheless.

  23. Ed Snack

    Cyprus, your comment shows great ignorance. Depositors over the limit for insurance were in fact given some value by way of shares. In normal circumstances when a bank goes broke depositors actually lose money to the extent that the bank has fewer assets than liabilities. That was certainly the case in Cyprus thanks to politically inspired investments in Greek Bonds that were drastically hair-cutted as part of the First Greek bailout.

    So with no money in the bank because of losses, what do you think should become of the depositors money, printed off a magic money tree ? Of course they should lose it unless you think governments should just pay out ?

    There’s a lot of misinformation about Cyprus.

  24. a happy little debunker

    Michel Lasouris @ #2237748, posted on December 17, 2016 at 7:14 pm
    Might I suggest a ‘potato’ black economy.
    High value spuds converted to vodka/moonshine will keep the teens happy for hours.
    Lower value spuds could be converted into fries – allowing us to join the worldwide MacDonald’s economy.

    I’ll be happy that my crops of Pinkeyes will have an enduring value ( especially since they are the only spuds you can properly freeze without pre-cooking).

    2 kilo’s of seed Pinkeyes will deliver 20+ kilo’s of freezeable spuds – my entire yearly supply needs.
    I could expand production 10 fold, with ease and reap the rewards of a new black economy.

  25. hzhousewife

    It’s a primitive mechanism, nonetheless.

    Yes, it doesn’t pay the car rego. But it is very satisfying in its own way.

  26. Aussiepundit

    The politicians will just vote for whatever their ‘advisors’ tell them is the next great policy idea.

  27. hzhousewife

    The politicians will just vote for whatever their ‘advisors’ tell them is the next great policy idea.

    An eminently good reason then, to let your local politician know what you advise them to do. Bu**er the “advisors”.

  28. Boambee John

    Use the Left’s own tactics.

    Whenever a suggestion is made that voting should be subject to photo ID, the Liars scream that this will “disadvantage Austraya’s most vunnable”, who don’t have such luxuries.

    If they don’t have photo ID, they are unlikely to have bank accounts, which require extensive ID to open. Therefore, eliminating cash will “disadvantage Austraya’s most vunnable”, and every SJW must be provoked into opposing the change.

  29. Zulu Kilo Die Onuitspreeklike

    Hubby is a pretty good bush mechanic = we put a butchered lamb into the freezer today. My massages are traded for fresh veg over the year, no need for cash

    I lend my neighbor a chisel plough for three days – he has a few hardpans he wanted to rip. He sends his young bloke down, for three days at lamb tailing time to catch lambs – a job requiring a strong back and a weak mind. We trade half a cow to another neighbor in return for half a pig, and two geese.

    It may not pay the bills, but, yes, it is satisfying.

  30. hzhousewife

    Zulu, +++
    Rural communities do this best, must annoy the city ponces no end !!

  31. mareeS

    We pay people cash. Ladies who clean our house, young men who mow our lawns and weed our gardens, young people who look after our cars, because we don’t like being on ladders these days, or doing our backs in at the end of shovels, vacuum cleaners, hoes, look after our internet requirements, etc.

    These young people are gainfully employed in the cash economy, and as we don’t pay tax now and don’t require invoices or receipts, we are happy to pay cash for good service.

  32. Denise

    We give comfrey and nettles and other weeds to a neighbour for her chickens, green oats for her horse and we get delicious eggs in return. Free horse manure from a young family with horses in return for oranges and marmalade from our orchard throughout winter and biscuits for the children. Gluten free date cake and zuchini exchanged with another neighbour for silverbeet and her cherry ripe slice. Free firewood which has to be cut from scratch and which we give to old people who need it in exchange for books and magazines for the lady of house who is homebound with schizophrenic son. And so on. It just happened.

    Caesar hates this sort of community engagement because it threatens its claim to be sole saviour.

  33. Botswana O'Hooligan

    Geoffrey Luck
    #2237725, posted on December 17, 2016 at 6:31 pm
    Fifteen years ago when living in Italy, my bank, the Monte dei Paschi di Siena deducted a government tax on deposits, so I was obliged to keep our funds abroad and bring in only as needed. I didn’t trust the MPS then, and look what’s happened to it now. This too could befall Australia.

    At one stage of the game in the motherland the rouble fell to about 25,000 to the USD, then rose to 5,000 then to about 30 so the banks had a field day thus giving rise to “banka” which means “jar” in Russia as well as Bank ’cause everyone put their loot under the mattress. It was devastating and the exploration company (State owned of course) my missus worked for as a geophysicist among other disciplines handed out food parcels and we got by because I brought home tucker from japan and the USA. Remember here that JWS had a law enacted that one couldn’t take out or bring in more than $9,999.99 to stop the “black market” then the GST to stop “black money” and then of course banned firearms to stop “criminal activity using firearms” and not one worked and the crims continued along pissing themselves as usual as they still do today. Banning or removing the $100 note will have the same effect of SFA. I always remember governments this way explained to me by the old Bullock driver and his missus who reared me, “they nationalised the pubs in Queensland and the f…ing pubs went broke, so never ever trust a government.”

  34. Empire GTHO Phase III

    Gold is money. It always was and always will be.

    The Chinese diaspora has successfully operated with gold backed paper ledger capital management for hundreds of years.

  35. Empire GTHO Phase III

    This post is good work, Adams. I like this much better than the “execute the drug dealers” horeshit.

    The war on cash matters. The war on drugs is a sideshow for panty wetters and wowsers.

  36. Bushkid

    “Confused Old Misfit
    #2237685, posted on December 17, 2016 at 5:25 pm
    It should be a *Human Right* to be able to hold the physical manifestation of ones efforts in ones own hands.” Spot on COM….

    After – more to the point, right alongside – freedom of speech, free access to air and water, freedom from aggression and oppression by government, should be the absolute right to be able to hold in our hands the physical manifestation of our own efforts, sweat and labour.

    For what or whom else do we labour and sweat, if not for ourselves? Certainly not for banks, corporations or government lackies to get rich from our efforts and sweat. And believe me, I sweat to earn what I do!! the thought of some padded-arsed bank CEO or bureaucrat skimming or thieving the money I sweat for is – quite frankly -vile.

  37. OneWorldGovernment

    I’ve come late to this but if the filthy scum liberal party of Australia introduce this then the sooner Point Piper is bulldozed into the sea the better.

    And John Howard has a lot to answer to.

  38. Infidel Tiger

    In the future you will be able to pay for sex with kids by PayPass. This is where we are heading as a society.

  39. Infidel Tiger

    Gold is money. It always was and always will be.

    Absolute rubbish.

    As a means of exchange it is next to worthless unless civil society is in place to recognise its value.

    When the revolution comes you will be begging me for toilet paper and canned goods whilst your worthless gold is a millstone around your soon to be severed neck.

  40. John Constantine

    No guns, no cash, only light beer, self driving government monitored cars, government owned internet monopoly.
    The old time Czars of all the Russians kept their serfs in the same state, just didn’t monitor them so much.

  41. 2dogs

    Any push against cash would just backfire. It would just move transactions into block-chain faster.

  42. JC

    Gold is money. It always was and always will be.

    Is it? When was the last time you used gold as money?

  43. JC

    Any push against cash would just backfire. It would just move transactions into block-chain faster.

    It is occurring naturally though. I can’t recall the last time I went inside a bank and these days, I use a cash machine much less.

    We had a good experiment with Bitcoin, but even that simply became what it was before the start of the bitcoin craze…. Gamers money.

    The real money in the world is the US dollar and it’s gaining status even more.

  44. John Constantine

    Simply, I have heard lefty human rights lawyers proclaim the end of cash, because everybody could just work for the government a few days a month and be looked after by the state the rest of the time.

    Their Lefty human rights lawyer class of course gets to travel tbet world overseeing it all.

  45. JC

    Moreover, across Europe, several countries have begun to place limitations on cash transactions including France and Italy who have banned cash transactions over 1000 euros or Spain who has banned cash transactions over 2,500 euros.

    Banning cash transaction above a certain limit is laughable. The entire reason for these transactions is to actually avoid the limelight, so imposing a law against will have zero effect.

  46. Snoopy

    The real money in the world is the US dollar and it’s gaining status even more.

    The usual suspects are campaigning to nix the USD100.

  47. JC

    Snoopy.
    In the latter part of the week the Reserve bank basically nixed the government’s ridiculous idea of nixing the 100 buck note by coming out and saying the more common note used for illicit transactions is the 50 buck note.

    It’s true, transactions with tradies is mostly done wit 50 buck notes.

  48. JC

    I know nothing about the law, but I reckon there could be an interesting court case at the High Court level of the government nixed the 100 buck note when it has legal tender written over it.

  49. Snoopy

    I know nothing about the law, but I reckon there could be an interesting court case at the High Court level of the government nixed the 100 buck note when it has legal tender written over it.

    Take a $2 note to the bank and try to deposit it into your account.

  50. John Adams

    JC… be careful re the RBA paper.. the Turnbull Government may double down and take out the $100 and $50 notes in one fell swoop!

  51. Infidel Tiger

    I’ve already started exchanging services for goods with contractors rather than cash.

    Works beautifully. Someone does work for me, I buy them stuff they want and then claim it as a business expense and tax deduction.

    We must never ever stop outwitting the ATO.

  52. Iggy popular

    Two things ;
    1) it’s obvious any govt wants to digitise all our money so it’s easier to watch and tax .
    2) thankfully as a Turdball enquiry nothing will come of it .
    Back to sleep now Malcolm …you can take out your “righteous anger” on your teddy bear . Meanwhile the rest of us will continue to ignore your flatulent , occasional indignation.

  53. iampeter

    John Adams We must resist the war on cash

    Welp, since we have failed to even resist the creation of departments that aim to regulate our business in terms of it’s impact on the weather I don’t hold out too much hope for this.

    The entire culture has shifted so far to the left that most people take government decrees and taxation as inevitable and completely legitimate and I can’t imagine on what grounds anyone is going to argue against this.

  54. john constantine

    Banning the hundy will have no noticeable effect on the average prole, so it is a very handy insertion of the wedge at no political cost.

    Once the process is established, next time their social justice aristocracy can simply introduce the meme that the fiddy has become the new hundy for purposes of crime, so must go the same way into the forgettery.

    Wasn’t there a thing over in America where tories flagged for misuse of cash if their small business banked outside of a range pattern could be shut out of the digital banking system–goodbye livelihood.

  55. Tel

    The good people of New South Wales are prepared to go back to using bottles of rum as our primary medium of exchange. My lime plantation just shot up in value.

  56. Tel

    I know nothing about the law, but I reckon there could be an interesting court case at the High Court level of the government nixed the 100 buck note when it has legal tender written over it.

    If anything could trigger the “on just terms” clause of the Constitution, that would be it. There’s no quibbling about what the market value of $100 note is.

  57. I’m feeling critical this morning. Time to let loose.

    Dot, the libertarian ignores the perfect opportunity to push a libertarian line on cash, instead swapping his libertarian hat for his gold bug one.

    Rabz, Adams has done more in this regard than anyone to highlight this issue to the ignorant public than anyone here. After all, us Cats are all talk.

    And JC, taking the 100 is simply a precursor to stealing the 50. The purpose of getting into parliament is to make the rules, not abide by them. You occasionally shock me with your apparent naivety of government.

  58. Louis Hissink

    The hundy caused me a minor amount of grief decades ago when I worked as a Hi Fi salesman.

    It was a saturday morning, the shop float was $50 and a customer came in and wanted to buy a video head cleaner, $22.50. Except he offered me a $100 note to pay for it. No credit card, just money.

    A Minty moment.

  59. Boambee John

    iampeter,

    See my comment at 2026 yesterday.

  60. Muddy

    Cripes! This is why economic illiterates such as myself lurk around the grotty edges of sites like this – to get edjamuhkated. Thanks.

  61. alexnoaholdmate

    Not only this, but the MYEFO is about to be released showing a huge blowout in the deficit. We will likely lose our AAA credit rating as a result.

    Times are bad, the economy is bad, unemployment is rising, the deficit is increasing. Things are in a bad way, and people are nervous.

    So what does The Potentially Greatest Prime Minister do in response?

    He spends all weekend devising a new Republican referendum. Fuck. Me, talk about a tin ear.

    I seem to remember a referendum on that issue only a few years ago. Seems we’re going to be continually asked the question until we give the right answer – because they know best what’s good for us, of course.

  62. .

    Beer Whisperer

    When the government issues a fiat currency, this is precisely why.

    Not to engender your freedom.

    But to initiate a system of whim (fiat).

    Seems pretty obvious, doesn’t it?

    Sure, it will get worse if it goes all electronic, but fiat predates electronic money. Note governments have been trying to get rid of BTC.

    Of course cash should be protected. The problem is the government taxes competition at 10% of issue, effectively outlawing private notes.

  63. Eyrie

    Now, will all you demented value added tax enthusiasts admit that it is a bad idea?

  64. Mundi

    If you think that’s bad, the new $20 and upwards notes are going to have rfid chips in them.

    Banks will also have to record the id’s of every note deposited and withdraw and link it to an account.

  65. Bruce

    “Gold is money. It always was and always will be.

    In a stable society, yes.

    In a time of social and economic collapse, not so much.”

    Two things:

    In Viet Nam, real estate, especially in large cities like Hanoi, is incredibly expensive, It is traded by the square metre.

    Also, the major method of transaction for such deals was, last time I was there, in REAL gold, in little blocks called “tael” or something similar.

    A further story from that part of the world involves “paper money”.

    Back in the late 1980’s, the was a vast amount of “Dong”, as the currency is called, in circulation. The problem was that it was becoming a problem to cart the required “Weimar Republic” amounts of the stuff around. Further complication was caused by the disparity between the “official” rate of exchange and that on the “street”, further complicated by the simple fact that the “second currency” was the US Dollar. Official rate; 7 Dong to a Greenback; “street’ rate? 700: 1

    Of course “street trading” was ‘illegal’, as one would expect in such situations, but it flourished.

    Government solution?

    NEW MONEY!!

    The edict went out late one week that EVERYONE was to bring in their “old” money to be replaced by “new” money. That is when the fun really started.

    People who could not account for their bags of cash were sent away or to the back of the rapidly growing queues.

    Just to make it interesting, and in typical fashion, the government had NO IDEA about just how much cash was out there. They RAN OUT.

    The “old” currency had been declared “void” and no longer “legal tender”. The whole place ground to a halt whilst the presses on Moscow churned out a couple of planeloads of new Monopoly money. For over a week, the bulk of the population, tens of millions of people, operated on a barter basis. Western cigarettes assumed astronomical trade value. The tiny handful of non-Soviet westerners in the country at the time, including an Australian film crew, haggled and traded their way through the chaos.

    That is NOT the only example of such things happening, nor will it be the last.

    Old advice for “alternate” currency?

    In no particular order:

    Small arms ammo, properly packed. (A rifle without ammo is just an expensive club).
    Medical supplies and equipment, including non-perishable pharmaceuticals.
    Water purification equipment and chemicals.
    Protective clothing, especially in colder regions.
    Tools and test / measuring equipment

    Gemstones, like diamonds for example, are useless because, unlike gold, their accurate assay is difficult to do “on the fly”.

  66. stackja

    The Associated Press ‏@AP 5 minutes ago
    BREAKING: Venezuela’s government extends the use of its 100-bolivar bill until Jan. 2 following protests.
    http://apne.ws/2hHiy95

    Chavez legacy.

  67. Walter Plinge

    I keep my card in a Faraday sleeve to limit skimming and line my wallet with alfoil.

    Wrapping your head in Alfoil would be a better use for it in your case.

  68. hzhousewife

    If you think that’s bad, the new $20 and upwards notes are going to have rfid chips in them.

    Banks will also have to record the id’s of every note deposited and withdraw and link it to an account.

    And what happens when there’s a 72 hour blackout like SA just had? We have to write down the serial number of every note that changes hands over that time period, then report it all to the government? Perhaps you can explain further so I understand how your proposal works.

  69. .

    The “old” currency had been declared “void” and no longer “legal tender”. The whole place ground to a halt whilst the presses on Moscow churned out a couple of planeloads of new Monopoly money. For over a week, the bulk of the population, tens of millions of people, operated on a barter basis. Western cigarettes assumed astronomical trade value. The tiny handful of non-Soviet westerners in the country at the time, including an Australian film crew, haggled and traded their way through the chaos.

    Ciggies became money, the most sought after commodity. Otherwise, it would be gold.

  70. egg_

    One of the causes of current low interest rates is big government crowding out the private economy, I’d argue. The banks are trying to develop a mechanism to thrive when the economy is strangled by the bloated size of government. Brought to you by the corrupt doctrine of Keynesianism, the Islam of economics.

    From previous, seems Govt Infrastructure spending in NSW is what is contributing to any perceived growth in GDP.

  71. Zatara

    Gemstones, like diamonds for example, are useless because, unlike gold, their accurate assay is difficult to do “on the fly”.

    They are even more useless because assuming you traded for anywhere near what you paid for the diamond your purchase (or the change from it) could be several truckloads of swag.

    Just want a few cans of soup and a roll of toilet paper because that’s is all you can carry and conceal? If you aren’t willing to part with that diamond for them you better have some .22 rounds or a few cigarettes.

    Ammo remains one of the most fungible things you can own in bad times and the worse things get the more valuable it is.

    (.22 because it is perhaps the most common civilian caliber and is suitable for hunting small game and birds without destroying them)

  72. DavidH

    The RBA website clearly says that $1 and $2 notes are still legal tender. Due to unfamiliarity, you might find a retailer reluctant to accept such notes – are they fakes?? But a bank should accept them and the RBA definitely. The RBA even gives pound note to dollar conversions! So $100’s might be withdrawn but would remain legal tender.

  73. Betty of Adelaide

    Am I not right in thinking it is a Commonwealth Constitutional requirement for the government to issue notes and coins?
    In which case this is a constitutional issue and the people better be ready to do battle!

  74. JC

    Snoopy
    #2237968, posted on December 17, 2016 at 11:36 pm

    I know nothing about the law, but I reckon there could be an interesting court case at the High Court level of the government nixed the 100 buck note when it has legal tender written over it.

    Take a $2 note to the bank and try to deposit it into your account.

    I don’t think the trading banks are obligated legally to take any deposit. I’m not sure about the law. However, if you took a 2 buck note to the RBA, I believe they will honor the claim by giving you change.

  75. Simon/other

    So my dollar stops being Australian and a dollar and starts being credit with a financial institution which values it at a rate based upon an Australian dollar that doesn’t exist any more and cannot be purchased. To make things less dodgy. So if the hundy does get phased out but retains it’s legal tender status in perpetuity it will become much more valuable due to scarcity and the fact that people can still use and accept them to do things untaxed?

  76. Let’s stop giving banks too much respect. When Monte Dei Paschi, that’s survived absolutely everything since the 1400s, is looking like closing time at the Erskineville Hotel, I’d say the game is up for a lot of them. I reckon the kiss of death was when banks started calling debts and accounts “products” and the public didn’t fall over laughing. We should have laughed, you know. It only encouraged them, as they hired more corporate witch doctors and put off more counter staff.

    If Iran needs lots of eggs, it manages to get them from Israel, probably via Turkey, after some waste and skimming. (Isn’t it amazing what real production and real demand can do with nobody helping?) The trouble is that banks, like other “free” trade boosters, love that bit of waste and skimming.

    Banks are a handy service that want to be more than a handy service. Much more. They now provide us with “conservative” PMs and Premiers without the immediate tedium of elections, and those appointees are just bound to be good little green globalists and very savvy on the needs of corporations to advance and smaller businesses to “evolve”.

    Say no to banks and to global movements on principle.

    Nobody sends a bill to the international community, the globe or the region. They bill nations. The taxpayers of nations pay up and go further in hock to do so. Nobody else pays up.

    You can prove me wrong on the day that the globalists send a bill to “the globe” – and get paid!

  77. .

    Betty of Adelaide
    #2238391, posted on December 18, 2016 at 5:04 pm
    Am I not right in thinking it is a Commonwealth Constitutional requirement for the government to issue notes and coins?

    No, you’re not right at all. Initially, they didn’t we had private issue of banknotes. Then in 1910/11, they taxes priate issue out of existence.

    The states can issue their own gold and silver coins unless the Commonwealth disallows it.

  78. Betty of Adelaide

    Preparing the Way

    The Governor-General, Lord Hopetoun, proclaimed the Commonwealth of Australia under the Federation Pavilion in Centennial Park, Sydney on 1 January 1901. Edmund Barton became Australia’s first Prime Minister.

    The first Federal Parliament met in Melbourne in May 1901, pending the selection of a site for the Federal Capital.
    My question was:
    “Am I not right in thinking it is a Commonwealth Constitutional requirement for the government to issue notes and coins?”
    I am thinking of this time in history not earlier. According to the RBA:

    The Constitution empowered the Parliament to make laws in relation to ‘Currency, coinage and legal tender’ and ‘Banking… and the issue of paper money’. But it was not until 1910 that legislation – The Australian Notes Act – passed through Parliament.

    Under this Act, control over the issue of Australian currency notes was given to the Commonwealth Treasury. The Bank Notes Tax Act, also in 1910, imposed a 10 per cent tax on all private bank notes, effectively discouraging, though not prohibiting, their issue.

    In which case my question would be along the lines of how could we use the Commonwealth Constitution to foil any moves to force us to accept bank credit and not have access to notes and coins?

  79. JohnA

    As is currently the case in Europe, negative interest rates imposed by the European Central Bank effectively require depositors to pay financial institutions a fee to keep their money as deposits. This punishes depositors and pushes them to often acquire inflated and risky assets in order to avoid their savings being consumed by their bank.

    Another unintended consequence could be that people recognise the difference between transaction banking and investment/savings.

    If we lodge money in a transaction account, we should not be receiving interest but should be paying a fee for the safe-keeping and transaction processing “services” provided by our banking system, including the assurance of settlement and so on (the theory of banking actually working).

    As the quid pro quo for lodgement, the banks should be required to hold liquid assets backing 100% of at call funds (transaction accounts plus maturing investments). That is the RBA Reserve Ratio (currently around 7% – can anyone correct me please?)

    If this was to transpire, we could say goodbye to the risk of bank runs. But we could also say goodbye to bank-induced inflation via “fractional reserve” credit expansion.

    Gee, would that be nice…

    Of course, the totalitarian finks who presently run the system would never countenance such a shift of power away from them and towards the general populace.

    But it’s nice to dream, sometimes.

  80. gabrianga

    No doubt high on the agenda (again) at Davos?

  81. Zyconoclast

    Negative interest rates plus a Tobin tax. Turnbull’s wet dream.

    Throw in a republican SSM and this will be a wet dream orgy.

  82. wreckage

    Annnnnnnnd I’m voting LDP. Again.

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