Banks, Government & Your Cash Money
$JPM
There is action underway, supported by former Treasury Secretary Lawrence Summers and openly contemplated by ECB President Mario Draghi, to eliminate large forms of currency. Meaning the $100 bill in the US and the 500 Euro note across the EU.
The notion driving this is that only criminals, and nutters want their money outside the banking system and the reach of governments.
Capital controls are another example.
These are government prohibitions regulating the flow of money. Recall when Cypress prevented citizens from taking any of their money outside of their country and limited cash withdrawals to what it considered enough for daily needs.
The result was very little cash in circulation and most of depositors’ wealth stored in electronic banks accounts.
So, when that small island nation’s banking system collapsed, it only took a Keystroke for the government to seize up to 40% of customers’ money in bank accounts holding more than 100,000 euros.
The reason: government’s interests overrode citizen’s interests.
That the very notion of limiting the ways citizens can access their own money is wrong at its core.
Further evidence is found in a newly released report by the Board of Governors of the Federal Reserve that shows declining deposits in US Banks.
All this presents a formidable obstacle to those who want to “Sunset” cash and are busying trying to associate cast with criminals and kooks.
Americans have earned less and spent more of their savings in the post Great Recession economy; over 50% of working Americans make less than $30,000 a year.
The nation’s financial health is very shaky and its financial institutions distrusted. Many Americans distrust banks and have an historic distrust of the US Fed.
People want their money at hand and accessible, as it is theirs.
If governments place limits on how easily cash money can be accessed, it will no longer be theirs.
JPMorgan Chase’s (NYSE:JPM) decision to limit transactions, coupled with their attempt to discourage customers from storing cash money in safety deposit boxes, suggests that private institutions are on board with that thinking now too.
Americans might want to think of alternative place to stash their earnings, The Mattress?
Stay tuned…
HeffX-LTN
Paul Ebeling
The post Banks, Government & Your Cash Money appeared first on Live Trading News.