The big theme for 2017 will be Cash. Not a pro-deflationary “time to own cash” theme, but a “let’s ban it as quickly as possible” theme.
Let’s review.
In 2016:
- Former Secretary of the Treasury, Larry Summers, called for the US to do away with the $100 bill.
- Former Chief Economist for the IMF, Ken Rogoff, published his book The Curse of Cash.
- The New York Times and Financial Times publicly endorse a ban on cash.
- Fed Chair Janet Yellen, during a Q&A session said cash is “not a convenient store of value.”
Of course the above items are simply propaganda and words. But 2016 also featured major actions as far as the War on Cash is concerned…
The 7th largest country in the world by GDP (India) banned physical cash in denominations that comprise over 80% of all outstanding bills.
The move was a political disaster… temporarily, but no one was forced out of office and the legislation remains in place.
The message here: you can get away with this kind of thing, even in a country in which physical cash is STILL the dominant form of currency.
Venezuela has since followed suit, banning any bill that is worth more than 3 cents. There as well, the policy was met with political outrage but the ruling part/people remain in power and no one was forced out of office over the matter.
Put simply, 2016 was the year in which the 7th and 33rd largest nations by GDP went effectively cashless… and no one lost their jobs over it.
You can imagine the glee the elites felt witnessing this, particularly in countries in which 50%+ of transactions no longer involve physical cash (60%+ in most developed nations).
After all, the only thing these people do worry about is losing their jobs. Provided no one is kicked out of office as a consequence, any policy, no matter how terrible, is considered viable to this crowd.
Which is why 2017 will shape up to be the year of the Global Cash Bans.
Numerous developed nations (France, Spain, Denmark, Sweden, etc.) have already banned cash for certain transactions. Next year (2017) is the year we expect to start seeing policy pushes for complete bans on cash.
Survive the Fed’s War on Cash.