IMF Teaches Governments How to Wage War on Cash


Creepy IMF Paper Teaches Governments How to Wage War on Cash

by Peter Schiff

There’s been another shot fired in the “war on cash.” Recently, the International Monetary Fund (IMF) published a working paper offering governments suggestions on how to move toward a cashless society even in the face of strong public opposition.

Over the last several years, we’ve seen a steady push to eliminate, or at least limit, the use of cash around the world. In May of 2016, the European Central bank announced it will stop producing and issuing 500-euro notes by the end of 2018. Not long before the EU announcement, a former Obama economic adviser/ex-Treasury secretary floated the idea of eliminating the $100 bill in the US.

Banks have also gotten in on the act. Last year, Chase capped ATM withdrawals for non-Chase customers at $1,000 per day. Recently, ATMs in Mexico stopped issuing 500-peso notes, leaving the 200-peso note as the highest denomination available. CitiBank Australia stopped handling cash transactions altogether late last year.

Indians also felt the squeeze last fall. On Nov. 8, the Indian government declared that 1,000 and 500 rupee notes would no longer be valid. They gave the public just four hours notice. Why? To force so-called “black money” into the light.

About 90% of all transactions in India are in cash. It is an overwhelmingly cash economy and virtually every Indian has currency stashed away in their home. The government can’t tax transactions using black money. By making the 1,000 and 500 rupee notes valueless, government officials hope to force the black money into the economy so they can get their cut.

Officials always justify their war on cash with talk about “customer preference,” and fighting terrorism and drugs, but the drive toward a cashless society is really about control.

By controlling access to your own money, banks and governments increase their control over you. They can collect maximum taxes and fees, they can track purchases, and they can even manipulate your spending habits by imposing negative interest rates that effectively charge you for saving.

Needless to say, many everyday people like cash and the relative freedom it provides. In a worst-case scenario, they can at least shield their wealth by shoving cash under their mattresses. You can’t do that if there isn’t any cash.

Well, the IMF wants to help governments crack down on cash in a kinder and gentler way. In “The Macroeconomics of De-Cashing,” IMF analyst Alexei Kireyev explains how governments can overcome the objections of their citizens as they wage their war on cash.

“Although some countries most likely will de-cash in a few years, going completely cashless should be phased in steps. The de-cashing process could build on the initial and largely uncontested steps, such as the phasing out of large denomination bills, the placement of ceilings on cash transactions, and the reporting of cash moves across the borders. Further steps could include creating economic incentives to reduce the use of cash in transactions, simplifying the opening and use of transferrable deposits, and further computerizing the financial system.”

Kireyev suggests governments will encounter less resistance if private institutions lead de-cashing efforts. After all, governments don’t want to give the impression they are trying to control their populace.

“In any case, the tempting attempts to impose de-cashing by a decree should be avoided, given the popular personal attachment to cash. A targeted outreach program is needed to alleviate suspicions related to de-cashing; in particular, that by de-cashing the authorities are trying to control all aspects of peoples’ lives, including their use of money, or push personal savings into banks. The de-cashing process would acquire more traction if it were based on individual consumer choice and cost-benefits considerations.”

Note: the paper does include a disclaimer. “The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF.”

Nevertheless, the suggestions in the working paper are creepy, to say the least. They certainly confirm the powers-that-be are very interested in limiting your access to cash and exercising maximum control over you.

One way to protect yourself from becoming a victim in the war on cash is to just buy gold and silver. The intrinsic value of precious metals can never truly be condemned by any government.

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https://tabublog.com/2017/04/14/imf-plans-for-cashless-society-disclosed/

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#IMF pushing for a revolution?


ArmstrongEconomics

The International Monetary Fund (IMF) is always the cheerleader to raise taxes to support government they are instructing Germany to raise taxes and also talking about just imposing a 10% tax on all money on deposit in banks throughout Europe. Yes – you read that one correctly.

The IMF has told Germany it should raise its property tax, cut social welfare contributions and invest more to reduce income inequality. The demands are contentious in an election year. Once again the IMF has demanded higher taxes on savings deposits in Germany. Germany must do more for to raise taxes to impose more socialistic ideals to somehow tax the rich to create a broader participation of all citizens in the fruits of economic growth, if somehow raising taxes actually ever creates economic growth. The IMF warns that there is a relatively high tax burden on lower incomes with a comparatively low burden on assets.

The IMF argues for higher taxes on property are in fact necessary and that the government should demand higher wages to also give impetus to the growth in Germany, yet this is magically creating no inflationary impact. Years ago, Italy simply imposed a tax on money in one’s account. This was called a “capital levy”. This was a one-time charge as an exceptional measure to restore the sustainability of the debt. The IMF is also suggesting that measure be invoked to help the coming Sovereign Debt Crisis. The attractiveness of such a measure is that such a one-time tax can be levied before a tax evasion can even occur, especially if cash is eliminated and money can only exist in bank accounts. This requires the belief that this measure is unique and never repeated.

The IMF has already calculated how much the measure would cost every Eurozone citizen:

“The amount of the tax would have to bring the European sovereign debt back to the pre-crisis level. In order to reduce the debt to the level of 2007 (for example in the euro area countries), a tax of about 10 percent is needed for households with a positive asset. “

As you can see, there is NEVER any discussion about reducing taxes or the size of government. The solution is always to raise taxes and to not even look at the old Italian trick of a 10% seizure of all cash in your account. We highly recommend to diversify to assets that are MOVABLE and not subject to taxation merely to possess.

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Christine Lagarde convicted: #IMF head found guilty of criminal charges over massive government payout


Independent 

International Monetary Fund chief Christine Lagarde has been convicted over her role in a controversial €400m (£355m) payment to a businessman.

French judges found Ms Lagarde guilty of negligence for failing to challenge the state arbitration payout to the friend of former French President Nicolas Sarkozy.

The 60-year-old, following a week-long trial in Paris, was not given any sentence and will not be punished.

The Court of Justice of the Republic, a special tribunal for ministers, could have given Ms Lagarde up to one-year in prison and a €13,000 fine.

The ruling however risks triggering a new leadership crisis at the IMF after Ms Lagarde’s predecessor Dominique Strauss Khan resigned in 2011 over a sex assault scandal.

Ms Lagarde, who was French finance minister at the time of the payment in 2008, has denied the negligence charges.

Her lawyer said immediately after the ruling that his team would look into appealing the decision.

On Friday she told the court: “These five days [of trial] put an end to a five-year ordeal for my partner, my sons, my brothers, who are here in this courtroom.

“In this case, like in all the other cases, I acted with trust and with a clear conscience with the only intention of defending the public interest.”

The case surrounded the decision to allow a dispute over Bernard Tapie’s sale of Adidas to Credit Lyonnais bank to be resolved by a rarely-used private arbitration panel – instead of the courts.

Investigators suspected the payment to 73-year-old Mr Tapie was the result of a behind closed doors agreement with then-President Mr Sarkozy in return for election support.

IMF managing director Ms Lagarde was suspected of rubber stamping a deal to effectively buy off the business magnate with taxpayers’ money.

Civil courts have since quashed the unusually generous award, declared the arbitration process and deal fraudulent, and ordered Mr Tapie to pay the money back.

Today’s result was unexpected.

Even the trial’s chief prosecutor Jean-Claude Marin said the accusation was “very weak” and warned of confusion between “criminal negligence” and a “bad political decision”.

At the start of proceedings, the £355,000-a-year boss, of the global Washington-based institution, said: “I would like to show you that I am in no way guilty of negligence, but rather that I acted in good faith with only the public interest in mind.

“Was I negligent? No. And I will strive to convince you allegation by allegation.”

Her lawyer Patrick Maisonneuve said on Europe-1 radio that Ms Lagarde was just following instructions from her administration and did not have time to read all 15 years of legal files on the case.

Ms Lagarde was only the fifth to be held before the Cour de Justice de la Republique since its inception in 1993.

IMF spokesman Gerry Rice said after Monday’s verdict that its executive board would meet soon “to consider the most recent developments”.

Another former IMF head, Rodrigo Rato of Spain, is standing trial on charges of misusing funds when he was boss of the Spanish lender Bankia.

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Global Financial Crisis Demands LaRouche’s Four Laws


Larouche Pac

imf-i

The creme-de-la-creme of the bankrupt international financial elite gathered Friday in Washington, D.C. for the opening of the IMF/World Bank fall meeting—with absolutely zero idea of what to do about the onrushing collapse of their entire trans-Atlantic financial system, including the high-profile bankruptcy of Deutsche Bank, which could be the trigger for the general collapse.

They don’t know what they are doing, Lyndon LaRouche commented on Friday. They have no way to create the institutions of a secure international banking system, which can only be done by implementing LaRouche’s Four Laws, along with the Hamiltonian approach to credit that underlies those Laws. Adopting that policy, beginning with the immediate reenactment of FDR’s Glass-Steagall, would set the standard to define productive credit, and foster science-driver policies such as the space program, which would increase the productive powers of labor.

The only trace of sanity within a mile’s radius of the IMF meeting, was provided by a squad of LaRouche PAC organizers, who distributed 120 copies of the latest issue of the Hamiltonian— with its lead headline, “One Minute After Midnight… The Crash Is On!“—to conference participants, and found much serious concern with the global crisis, and significant support for Glass-Steagall and the policies of Herrhausen at Deutsche Bank.

Inside the event, as the Wall Street Journal put it,

“worries about Deutsche Bank AG and other potentially troubled European banks are casting a pall over the autumn meetings of the IMF and World Bank this week.”

Similarly, the New York Times ran a lengthy article fretting that “Deutsche Bank might be the next Lehman Brothers.” The bulk of the article cited numerous experts arguing unconvincingly that things really aren’t so bad, and that “there won’t be any contagion episode” related to Deutsche Bank. But the article had to admit, in conclusion:

“Should Deutsche Bank precipitate a financial crisis, it’s not clear how it would be resolved. It’s a European bank, so the Federal Reserve’s powers would be limited. ‘I hope there’s a global game plan,’ [Harvard University Law Professor Hal] Scott said, ‘because that’s what it would take. If Deutsche Bank set off contagion, it would start in Europe. Who would be next? This would require global coordination.'”

Meanwhile, there is frenzied activity behind the scenes, to stitch together some sort of a bail-out for Deutsche Bank. The German daily Handelsblatt reported that a number of “blue-chip” German companies are prepared to offer a capital injection of a couple of billion dollars. And Bloomberg reported that

“senior advisers at top Wall Street firms are speaking to representatives of the German lender about ideas, including a share sale and asset disposals,”

to the tune of some $5.6 billion.

None of these schemes, however, will work, nor do they address the underlying bankruptcy of the entire trans-Atlantic financial system, to the tune of a $1.5 quadrillion speculative bubble which can never be paid, and which must be written off and the economy reorganized as per the specifications of LaRouche’s Four Laws.

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Western Banks Crumble while Yuan Joins the IMF SDR Basket


“Surely, the complete Western financial collapse will just be a matter of time, and contrary to some assertions, it’s not something that the Khazarian bankers are fretting much about. They have already invested their loot in China, India and even in Russia. They have profited from every systemic shift which have happened before.”

Covert Geopolitics

The gradual Global Reset continues with the official inclusion of the Chinese Yuan (RMB) as prime alternative to the US dollar as global currency of exchange which should provide a smooth transition away from fiat dollar.

View original post 2,473 more words

SDR World Order


by James Corbett
corbettreport.com
October 1, 2016

I’m not sure how to break this to you, but it appears the world is ending this weekend. Or at least that’s what you’d believe if you were reading certain corners of the internet.

As you may have already heard, the UN is “taking over the internet” this weekend. But as you’ve also heard if you follow The Corbett Report, that is a complete misrepresentation of what is really happening. Worse, hyperbole about a “UN takeover” of the internet obscures the real solution to ICANN and the centralized DNS system.

But there’s another “end-of-the-world” event taking place this weekend that you might not have picked up on: the SDR.

sdrbasket-768x374

That’s right, the IMF is formally adding the Chinese renminbi (aka the yuan) to their “Special Drawing Rights” basket on Saturday, October 1st. The move boosts the yuan to the status of global reserve currency alongside its basketmates, the pound, the euro, the yen and the dollar. At 10.92% it will be the third highest-weighted currency in the basket, behind the euro at 30.93% and the dollar at 41.73%.

For those who missed my previous reporting on the SDR and the significance of the yuan’s inclusion, here’s the primer:

  • The SDR is not a currency, but a potential claim on dollars, yen, euros, pounds, and now yuan.
  • It is issued by the IMF and held (and traded) as a “supplementary reserve asset” by central banks.
  • There are 204 billion SDRs outstanding, equivalent to $285 billion or about 2.5% of total global reserves.

The upshot of the SDR is that it provides liquidity for global transaction settlement in times when dollars and gold are in scarce supply. Inclusion of a currency in the SDR basket means that there is a built-in demand for that currency as central banks tend to match their currency holdings to the basket’s weighting, meaning that central bankers around the world are now (or have already) adjusted their aggregate holdings of yuan to about 10.92% of their portfolio. With $11.6 trillion of reserves globally, that equates to over $1 trillion worth of yuan being held in central bank coffers around the world.

More than that, the move is expected to boost investment in the yuan from both FX reserve managers and global portfolio managers. The FX inflows alone have been estimated at as much as $3 trillion in the coming years, with onshore bond buying accounting for a further $1 trillion of expected foreign investment.

Some outlets are hailing this as the largest transformation of the global monetary order since WWII.

sdr

Others, like Barron’s Chi Lo, are putting a wet blanket on that hyperbole. In an article titled “What Now for China as Renminbi Joins SDR?” Lo argues that much of the re-balancing of global reserve portfolios have already been completed, and would have only amounted to an extra $31 billion of demand for the yuan, a drop in the bucket of global liquidity. And global investors, he says, will not base their investment decisions on China’s SDR status, but on China’s commitment to the structural reforms which have been put on the back burner since the yuan achieved SDR status:

“SDR inclusion of the renminbi is not relevant to the portfolio re-balancing decision (to increase the weighting of renminbi-denominated assets) of international investors. The impact on global portfolio decisions will come from foreign investors’ assessment of China’s fundamental outlook, the opening of China’s capital account and the decision by international index providers, such as MSCI, to include Chinese A-shares in their global indices.”

So who’s right? Is this the dawn of a new monetary order, or a blip of little significance in and of itself? Well, in a weird way perhaps both are right. China’s SDR inclusion is not going to turn the world upside-down overnight. And if it was just the inclusion of one more currency in the global reserve basket (and only 10% of the basket at that), then this wouldn’t be significant all by itself. But while you were sleeping another development came along that gestures to the potentially transformative nature of this SDR makeover.

In August the World Bank announced to relatively little fanfare an historic bond issue: The International Bank for Reconstruction and Development (IRBD), one of the five institutions under the World Bank umbrella, would sell nearly $3 billion worth of SDR-denominated bonds. And the currency of settlement? The Chinese yuan.

chinaimf-768x512

SDR-denominated bonds were flirted with decades ago, most recently in 1981, but the market for SDR bonds did not develop and they soon went the way of the dodo. But now, lo and behold, 35 years later they’re making a comeback, right in the heart of the world’s rising economic dragon.

The issue, which went ahead on August 31st, serves a mundane, practical purpose: It allows Chinese investors to dabble in different currency assets without investing abroad. But at the same time it serves a much bigger purpose. In attempting to revive the long-dormant SDR bond market, China is tacitly backing the SDR as a reserve currency unto itself. Not a mere claim that is redeemed in other currencies by central banks in need of liquidity, but a settlement currency in and of itself.

As I explained before, this has been Beijing’s plan since the 2009 crisis: not to have the yuan replace the dollar as the global reserve, but to have the SDR replace the dollar. This allows the Chinese government to avoid having to liberalize the yuan or ease up on its rigid capital controls, but still gives it a seat at the table in a new global monetary order while simultaneously dethroning their best frenemy, the US. It’s win-win-win for China and, more importantly, win-win-win for the globalist oligarchs who want to bring in a New World Order of globally-administered currency.

As The Epoch Times puts it: “This is the first step toward one world currency.”

globalcurrency-300x122And guess what? It’s been in the planning for years, openly discussed in the central bankers’ white papers, decision documents and conferences, but conveniently unreported by the media and completely overlooked by the public.

In March 2009, as the world was still reeling from the Global Financial Collapse, Zhou Xiaochuan, the Governor of the People’s Bank of China, published an essay on March 23, 2009 in an essay bluntly titled “Reform the international monetary system.” In it, he argued that the world could no longer afford to be tied to the US dollar and the vagaries of the American financial system. Instead, it needed to be presided over by those trustworthy angels at the IMF:

“Compared with separate management of reserves by individual countries, the centralized management of part of the global reserve by a trustworthy international institution with a reasonable return to encourage participation will be more effective in deterring speculation and stabilizing financial markets. The participating countries can also save some reserve for domestic development and economic growth. With its universal membership, its unique mandate of maintaining monetary and financial stability, and as an international ‘supervisor’ on the macroeconomic policies of its member countries, the IMF, equipped with its expertise, is endowed with a natural advantage to act as the manager of its member countries’ reserves.”

And in case that wasn’t clear enough, Zhou also wrote that: “The SDR has the features and potential to act as a super-sovereign reserve currency.”

The very next year the Bank for International Settlements (yes, that Bank for International Settlements), the European Central Bank and the World Bank jointly organized the Third Public Investors Conference, a chance for 80 central bankers, wealth fund and pension fund managers to hobnob at the BIS’ headquarters in Basel and discuss their world domination schemes. The results of that conference were collected in an edition of “BIS Papers” and published on the BIS website. One of those papers, penned by George Hoguet and Solomon Tadesse of State Street Global Advisors, discussed “The role of SDR-denominated securities in official and private portfolios” and predictably pimped the revival of SDR bonds that we are currently living through:

“An investor can synthetically replicate the weights of an SDR-denominated bond, but a security denominated in SDRs is self-rebalancing and is likely to minimize rebalancing costs. Additional research, particularly on the coordination problem (which limits liquidity) and operational issues, including settlement, can facilitate the development of an SDR-denominated bond market. Williamson (2009a) suggests that greater private use of the SDR could possibly facilitate greater official use, including the pegging of currencies to the SDR rather than to a basket of currencies or to some bilateral exchange rate.”

In other words, SDR bonds create the market for SDRs generally and legitimate their use as a settlement currency in their own right.

yuanphnoe-300x169Now, six years later, here we are with the World Bank helping China issue SDR-denominated bonds. This is the real reason that this bond issue is happening at all. As The Epoch Times points out: “For the IBRD, there is no advantage because it is borrowing in strong currencies and getting paid in a relatively weak one.”

No, this is not about some wonderful new way for the World Bank to cheaply finance its bond issues; it is entirely about legitimizing the role of the SDR on the world stage as a potential world currency.

It remains to be seen whether this strategy will be successful. The first bond issue was a success, with a bid to cover ratio of 2.5 and 50 institutional investors—from central banks to domestic banks, brokerages and insurance companies—bidding on the instruments. But ZeroHedge quotes a fixed-income fund manager in Hong Kong who was not so impressed by the auction: “We are not interested in SDR bonds and we can’t see why Chinese investors should want these bonds since they can easily buy much higher yielding bonds in China.”

Whether SDR bonds will take off depends completely on whether the central bankers can convince the financial world of the benefits of scuttling the dollar reserve system. That will take some concerted effort, which is why we should expect to see an increase in stories raising awareness about SDRs and their potential utility in the coming years.

In that sense, the spate of stories this weekend about the yuan’s SDR inclusion may not be so much the end of the world as the first wave of propaganda getting people ready for the end of the world.

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The Yuan Is In The Basket!


…and the beginning of the end for the Dollar?


RT

Chinese yuan becomes IMF reserve currency, first new addition since ‘99

yuan

http://on.rt.com/7qs8

The Chinese yuan has been added to the IMF reserve basket, becoming the first currency to be added to the list since the emergence of the euro in 1999.

The official entry was made Saturday, bringing to a close, at least partially, Beijing’s years-long struggle for international acceptance on the sort of level enjoyed by the US dollar. The currency now joins the big four: the US dollar, the euro, the yen, and the British pound.

The decision means the Chinese yuan will now be used as one of the International Monetary Fund’s lending currencies in times of emergency economic bailouts. This sort of internationalization is in line with China’s wish for increased legitimacy of its currency.

The move is also evidence of China’s growing role as a power to challenge the global economic dominance of the United States.

The limitations China places on its own markets, however, have themselves been to blame for this delayed outcome.

“It’s an irreversible path towards opening up, integrating into the global economy and playing the economic game by the rules,” proclaimed IMF Managing Director Christine Lagarde.

READ MORE: Putin’s gift to Xi causes Russian ice cream craze in China

Her assurance comes as critics say the move is no more than symbolic. Many of them accuse Beijing of exchange rate manipulations and cross-border capital movements.

US Treasury Secretary Jack Lew said China is still “quite a ways” away from the status of a true global reserve currency.

Nevertheless, the IMF said it recognizes the “enormous” changes made over the past decade to bring yuan out into the open.

On Friday, the IMF fixed the relative amounts of the five main currencies in its basket for five years, based on the exchange rate of each one over the last three months.

 

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