Danish Proposal the Latest Salvo in the War on Cash

The war on cash continues to heat up with a proposed law in Denmark that would open the door to what Jim Leaviss called “the first step towards an economic revolution that sees physical currencies and normal bank accounts abolished,” in a recent Telegraph column.

Last month, we reported on the reasons central banks would love to do away with cash. In a nutshell, these central planners believe they can more effectively manipulate the economy in a cashless society.

The proposed Danish law would take a step in that direction, allowing shops to refuse cash and require some form of electronic payment. Policymakers claim the law would “ease administrative and financial burdens,” but Leaviss gleefully sees it as part of a much bigger picture.

A proposed new law in Denmark could be the first step towards an economic revolution that sees physical currencies and normal bank accounts abolished and gives governments futuristic new tools to fight the cycle of ‘boom and bust’… The move could be a key moment in the advent of ‘cashless societies’. And once all money exists only in bank accounts – monitored, or even directly controlled by the government – the authorities will be able to encourage us to spend more when the economy slows, or spend less when it is overheating.”

With all money held and controlled by the central bank, economic planners could directly manipulate spending and saving. When an economy begins to slow, the bankers could impose a negative interest rate on everybody’s money – effectively a tax on savings that would encourage spending. When an economy gets too hot, the bankers could impose a tax on every transaction to discourage spending.

Leaviss talks in terms of macro-economic policy – preventing recessions and cooling down “overheating” economies. But when you read between the lines, it becomes clear a cashless society would allow governments to exercise a tremendous amount of control over you and me individually. He writes:

At the moment it’s easy for individuals to avoid seeing their money eroded this way – they can simply hold banknotes, stored either in a safe or under the proverbial mattress. But if notes and coins were abolished and the only way to hold money was through a government-controlled bank, there would be no escape.”

No escape.

Chilling.

Even if you accept claims that central bankers and the political class only want to use this power for good, the idea of a handful of central planners manipulating the economy should send shivers up your spine. It’s simply impossible for a few men and women to grasp all of the contingencies and potential unintended consequences of a given policy decision. Despite what they’d like you to believe, they aren’t that smart.

And when you consider the potential for abuse, manipulation and outright tyranny inherent in a government controlled cashless society, the prospect becomes downright terrifying.

Despite these concerns, the war on cash continues to gain steam and savvy investors will take these developments into consideration as they plan for the future. Owning physical gold and silver allows you to keep your savings safely in your possession in a liquid form that the government cannot manipulate. That means physical gold and silver not only provide a hedge against inflation, but also security should a large-scale cashless society come into existence.

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