Former IMF economist argues for a (relatively) cash-free America

MW-DU821_curren_20150922135826_ZGNearly 80% of the cash circulating outside financial institutions is in $100 bills, writes Kenneth Rogoff in his weekend essay. The Fed and the Treasury Department, according to the Rogoff essay, have recently dropped their longtime contention that 70% of the demand for U.S. paper currency is overseas.Harvard professor and former IMF chief economist Kenneth S. Rogoff argues in aReview section essay in the Wall Street Journal weekend edition that the U.S. should become a far more cashless society and, in fact, should move toward a phase-out of large notes, saying:

‘[P]aper currency lies at the heart of some of today’s most intractable public-finance and monetary problems. Getting rid of most of it — that is, moving to a society where cash is used less frequently and mainly for small transactions — could be a big help.’

High-denomination notes facilitate crime, public corruption and tax evasion, among other ills, Rogoff says. They even lie “at the core of the illegal-immigration problem in the U.S.”

He acknowledges that the unbanked poor have legal and legitimate needs for cash and that others prefer cash to protect privacy in certain perfectly legal transactions.

But along with “the tax and crime angle,” Rogoff writes, central bankers would, with cash hoarding reined in, find themselves freed to push monetary-policy stimulus more aggressively.

“[I]f done gradually and properly, the balance of arguments is distinctly in favor of becoming a society that depends much less on cash.”

Credits and full article here.

Commentary:

This article above in my opinion and for lack of “kinder words” explains why economists (not all) at times truly have no clue as to knowing how the real world operates. “Real world” meaning those of us who use both intellect AND common sense to live in the present, and use intellect and common sense to see what’s coming in the hopes of making a life for the future.

From my experiences economists live in a world where numbers dictate their decisions. Although in fairness, yes it is true that often times numbers do tell a story to aid in making a decision. Yet seemingly what’s left out of economist’s decisions is the ability to understand that what’s best for governments and central banks are not always good for you and me.

And so they point their noses downwards and plough through numbers and try to paint a picture for us instead of simply looking up at the world around us… you know, the common sense part. The thing is, when they paint a picture for us of where things are and where it is going it might as well be labeled “abstract art” since they, we, governments, all see different things. Their mission more and more it seems is to steer markets and opinions in favour of central banks and governments.

The problem is as I mentioned what’s good for governments and central banks are not always good for you and me. So as you ponder the article above ask yourself, “Do I want cashless where my finances and purchases are controlled in the name of peace and safety. Or would I rather buy and sell as I please and make politicians do their job which is ensuring my freedom, peace, and safety.”

The key point, notice how going cashless cannot anymore include, or at the very best puts limits on the word freedom.  But don’t believe my words. Look at this  economists words instead where he says, “central bankers would, with cash hoarding reined in, find themselves freed to push monetary-policy stimulus more aggressively.”

So my friends, does that statement mean freedom for you and me, or freedom for central banks and governments to do what they wish? For any economist, accountant, or any of us for that matter,  it should be quite easy to see how when freedom shifts more in one direction, it means there is a lack of freedom in the other direction. It’s just common sense.

Come and see me at SilverAG in Clarke Quay and have a chat,

Cheers,
Patrick

Disclaimer, this commentary piece does not reflect the views, attitudes, or opinions of SilverAg.

Advertisements

Markets Are Broken

AAEAAQAAAAAAAAS-AAAAJGIxNDNiNzhhLWQ3MWUtNDBmMy05ZGExLTZjYTg1NjZiZWNmNQPrecious metals expert Craig Hemke contends, “What people have to understand here is what you think of as a market, two rational people exchanging goods at a certain price that works for both of them, is not what happens here. The price is discovered for the paper derivative itself, and it is determined by electronic high-frequency trading. All this is machines taking ques from other things that seem totally unrelated. So, it sounds like these are markets that are broken. I think that is a safe assumption to make. . . . The speculators trading the paper derivative is what is allowed to set price, and that is absolutely breaking everything. For my specific purposes, it is going to break the derivative paper pricing scheme, as well. We can’t wait for that to come because the price is not going to be discovered to be $1,360 per ounce at that point. . . . I know how this is going to end. Tolstoy in ‘War and Peace’ said ‘time and patience are the greatest warriors,’ and that’s exactly right. I have time and patience on my side because I know how this ends.”

For some of the lowest gold and silver prices in Singapore visit www.SilverAg.com.sg

Credits and video here.

 

Silver Going to Move Up Faster Than Anybody Can Imagine

Silver Coin Bullion 1 ounce on top of a larger bullion bar
Silver Coin Bullion 1 ounce on top of a larger bullion bar

Co-founder of the Gold Anti-Trust Action Committee (GATA), Bill Murphy, has long charged cartel banks suppressed gold and silver prices. Murphy has been proven 100% correct. He now charges, “The real key for this gold cartel, as we call it, is the suppression of the gold price. They realized a long time ago they couldn’t have a dichotomy between the silver and gold. So, they got involved in the silver market (to suppress the price) to make gold look like it should be doing what it is. The problem is they are running out of physical silver to keep the price down. . . . Eventually, you are going to get a commercial signal failure in silver, which means these so-called commercials, which is a misnomer because they are not commercials, they’re gold cartel trying to keep the silver price down. They know when they lose control of silver, and it gets to $21 (per ounce), it will be the end of their gold suppression scheme. . . . It will be a gradual process because the price of silver is going to go bonkers. It will show what they have been doing all these years. I think they are finally reaching a tipping point. . . . The death knell to the gold cartel is the lack of supply of silver to keep the price down. . . . I think you are going to see the double top of $50 be taken out and go to at least $100 per ounce and maybe a lot more. I think it’s going to move up faster than anybody can imagine. . . . Gold is going to move to some big number also. . . .If gold kept pace with inflation, it would be double what it is today.”

For some of the lowest gold and silver prices in Singapore visit www.SilverAg.com.sg

Credits and video here.