A Federal Reserve tax on debt currency? Sure, why not.

The Secret Fed Paper That Advocated a "Carry Tax" on All Physical Cash

Phoenix Capital Research's picture


 

Many commentators have noted that mainstream economists are calling to do away with cash entirely.

 

It would be easy to scoff at these proposals as completely insane if the Fed hadn’t published a paper back in 1999 suggesting the implementation of a “carry tax” or taxing actual physical cash using an expiration date if depositors aren’t willing to spend the money.

 

The author of this lunacy is a visiting scholar with the ECB, the Fed, the IMF, and the Swiss National Bank. The fact that two of those groups have already imposed negative interest rates (ECB and SNB) should give warning that these sorts of ideas are actually taken very seriously by Central Banks.

 

The paper, written 16 years ago, suggested that if the Fed were to find that zero interest rates didn’t induce economic growth, it could try one of three things:

 

1)   A carry tax (meaning tax the value of actual physical cash that is taken out of the system)

2)   Buy assets (QE)

3)   Money transfers (literally HAND OUT money through various vehicles)

 

Regarding #1, the idea here is that since it costs relatively little to store physical cash (the cost of buying a safe), the Fed should be permitted to “tax” physical cash to force cash holders to spend it (put it back into the banking system) or invest it.

 

The way this would work is that the cash would have some kind of magnetic strip that would record the date that it was withdrawn. Whenever the bill was finally deposited in a bank again, the receiving bank would use this data to deduct a certain percentage of the bill’s value as a “tax” for holding it.

 

For instance, if the rate was 5% per month and you took out a $100 bill for two months and then deposited it, the receiving bank would only register the bill as being worth $90.25 ($100* 0.95=$95 or the first month, and then $95 *0.95= $90.25 for the second month).

 

It sounds like absolute insanity, but I can assure you that Central Banks take these sorts of proposals very seriously.  QE sounded completely insane back in 1999 and we’ve already seen three rounds of it amounting to over $3 trillion.

 

No one would have believed the Fed could get away with printing $3 trillion for QE in 1999, but it has happened already. And given that it has failed to boost consumer spending/ economic growth, I wouldn’t at all surprised to see the Fed float one of the other ideas in the coming months.

 

Indeed, JP Morgan has already begun implementing a similar scheme by forbidding the storage of cash in its safe deposit boxes.

 

As of March, Chase began restricting the use of cash in selected markets, including Greater Cleveland.  The new policy restricts borrowers from using cash to make payments on credit cards, mortgages, equity lines, and auto loans.  Chase even goes as far as to prohibit the storage of cash in its safe deposit boxes .

 

In a letter to its customers dated April 1, 2015 pertaining to its "Updated Safe Deposit Box Lease Agreement,"  one of the highlighted items reads:  "You agree not to store any cash or coins other than those found to have a collectible value."  Whether or not this pertains to gold and silver coins with no numismatic value is not explained. 

 

https://mises.org/blog/chase-joins-war-cash

 

Here is the single largest bank in the US, forbidding depositors from storing cash in a storage box or safe deposit box at their bank. And virtually no one even responded in outrage.

 

Again, the Fed has declared a War on Cash, and a “carry tax” is coming.

 

If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.

 

You can pick up a FREE copy at:

http://www.phoenixcapitalmarketing.com/roundtwo.html

 

Best Regards

Phoenix Capital Research

 

Views: 135

Comment

You need to be a member of 12160 Social Network to add comments!

Join 12160 Social Network

Comment by Less Prone on May 21, 2015 at 12:41pm

It's about time to look for other means of payment and doing business, outside of the usury based money as debt abuse system.

Economic Independence and Cooperation

"Destroying the New World Order"

TOP CONTENT THIS WEEK

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

Latest Activity

alux junes posted a status
3 hours ago
alux junes posted a status
3 hours ago
alux junes posted a status
3 hours ago
alux junes posted a status
4 hours ago
alux junes posted a status
"mewe.com is easier than this"
4 hours ago
alux junes posted a status
4 hours ago
alux junes posted a status
"how many people still come here?"
4 hours ago
tjdavis posted a video

Prince - Cinnamon Girl (Official Music Video)

"Cinnamon Girl" from 'Musicology' (2004)☔️ Listen to more Prince here https://lnk.to/PrinceStream📺 Watch all the official Prince videos here http://bit.ly/P...
12 hours ago
MAC posted photos
12 hours ago
FREEDOMROX posted a blog post
14 hours ago
MAC posted a discussion
16 hours ago
Doc Vega posted blog posts
19 hours ago
rlionhearted_3 commented on rlionhearted_3's photo
yesterday
rlionhearted_3 commented on rlionhearted_3's photo
Thumbnail

Hooray for Russian TV

".Supposedly, Russians have evidence that links Burisma and the recent terror attacks. Burisma for…"
yesterday
cheeki kea commented on rlionhearted_3's photo
Thumbnail

True Story

"Well I bet Iran remembers that true story. ~ and there in lies the problem...because they would…"
Wednesday
cheeki kea commented on rlionhearted_3's photo
Thumbnail

Hooray for Russian TV

" That one is a shocker! even for them. What could have driven and compelled them to dredge up…"
Wednesday
cheeki kea commented on tjdavis's video
Thumbnail

It Wasn't Fauci: How the Deep State Really Played Trump (mini-doc)

"Excellent video. I hope this one makes it to the features page it sure deserves it. Answers a lot a…"
Wednesday
cheeki kea favorited tjdavis's video
Wednesday
tjdavis posted videos
Wednesday
Doc Vega posted blog posts
Tuesday

© 2024   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted