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May 6th, 2015

Greece introduces cashpoint tax in desperate bid to raise revenue and stop run on banks as country teeters on brink of bankruptcy

  • Greek ministers expect to raise up to €180 million from the new surcharge 

  • They hope it will also deter savers pulling billions out of struggling banks 

  • Charge of €1 will apply to all ATM withdrawals and transfers over €1,000

  • But those paying money in to their bank accounts will not be affected.

    Britain's DAILY MAIL newspaper reminds us of an unfolding Greek Tragedy which appears to be headed for a closing curtain.  

  Greece is not the only nation trying to discourage cash withdrawals from bank accounts. The present buzz in several nations centers on the notion of a "cashless society."  

  One writer asks: Could these restrictions be a bellwether for outright confiscation or prohibition of cash? I don’t see that as likely, because it would raise such a political outcry. What’s somewhat more likely would be a cash recall along the model first proposed by former US Treasury Secretary Donald Regan in 1989.

  "Regan recommended that all $50 and $100 bills be recalled and replaced with a new currency. The changeover would occur in a 10-day period, Regan proposed, and the old money would no longer be legal tender after that time. Regan also recommended that anyone turning in more than $1,000 in old bills be forced to prove that they had paid all taxes on the cash and that it had not been generated through illegal activity. Otherwise, the cash would be confiscated."   ABOLISH CASH.  

  (NOTE:  Secretary Regan's idea did not get to first base.  This does not mean that some form of it is not discussed in the upper echelon of banking and government circles. Bank runs must not be allowed to happen.)  


We've been heading toward some form of "cashlessness" for years.

  Face it. Not many of us pay our monthly utility bills with cash, nor are many transactions above $100.00 handled in cash.  Moreover, income is mostly received as direct deposits into checking accounts.  Payment by credit, debit card, or check is common.  Just eyeball the transactions ahead of you at the grocery store check-out.

  According to banking data the amount of actual pocket currency in the total money supply is a drop in the bucket.  The amount of metal currency (coins) is but a fraction of the money supply and not very popular, which is why it tends to pile up in bureau drawers and glass jars.

  Most money exists only as digits in the bowels of the world's computers.  But there is a move afoot to get rid of cash altogether. Kenneth Rogoff of Harvard University and Willem Buiter, the chief economist at Citigroup, seem to have ignited the latest push toward a "cashless society".  

  Let's re-visit Martin Armstrong's commentary on the matter:  PUSHING CASHLESSNESS.

  Try as they may, we don't think Messrs. Rogoff and Buiter will succeed in removing the cash component from our money system, although we understand why they are promoting the idea.  Dealing in cash insures the buyer's anonymity, which is frowned upon in the modern age of government micromanagement of citizen affairs.  

  There is also the matter of billions of dollars worth of paper notes circulating around the world bearing the solemn words "This note is legal tender for all debts, public and private." Congress knows better than to try to officially eliminate legal tender no matter how persuasive liberal college professors may be. 


"We're here to go to Heaven so why not get shot?"  ~Elton Simpson

    The late Elton Simpson was one of the two young men bent on stirring up major trouble in Garland, Texas Sunday 's night at an anti-Muslim event involving a cartoon competition centered on sketches of the prophet Mohamed.  They were both killed by police. Fast Track to Heave

  We've often thought it was a major deception of radical Islamic adult practitioners to pain such an enticing picture of the hereafter for impressionable youth. Especially suspect is the notion that young males, upon blowing themselves to smithereens as suicide bombers will immediately find themselves receiving their heavenly reward in the company of a bevy of attractive girls.  The premise for this is built on hearsay and we suspect the well educated young Muslim is not eager to test the premise no matter how deeply his faith runs.

 The idea of the persistence of one's personality after physical death is still being debated among religious philosophers. Everyone seems to be hopeful but "returnees" over the last couple of millennia have been non-existent. Even the great escape artist Houdini failed to get word back to the living about what was going "over there."

 Perhaps it would cut down on suicide bombing if the seeds of skepticism could be planted in the minds of the violently radical Islamists.


   "Australia will be the first to introduce a compulsory tax on savings.  It is the ultimate Marxist state for now anyone with spare cash is the enemy of the Conservative Tony Abbott government. 

 .    "The new compulsory control is already provided for in the 2015 Australian budget. So that everyone who has any savings must pay taxes on on their savings. The measure is expected to serve as a global test balloon for Europe and North America will watch the outcome in Australia. If there will be no massive resistance of Australian savers, the rest of the world should expect this outright confiscation very rapidly." TAX ON MONEY

< It's hard to believe the good people of Australia will go along with such nonsense as this.  But taxing people's assets is not uncommon.  Consider th our local property tax oland, houses, cars, boats, incomes, and more.  

    But these are selective taxes.  Only public opinion keeps government from taxing one's other assets....household furnishings, valuables...including cash...and other asset accumulations. 

    If this Australian measure moves forward there will surely be a considerable uptick in cash withdrawals from banks.  

   Outliving One's Resources.

   We went to a party Saturday evening and had the pleasure of chatting with a longtime acquaintance who is presently in his 100th year.  Although now confined to a wheel chair his mind is perking along on all cylinders.  (Woodrow Wilson was president when he was born.

  Another friend at the party will celebrate her 93rd birthday anniversary this month.  She admitted that she once lied about her age but now that she is a nanogenarian she has  begun to brag about it.  

   The numbers of people in their 80s, 90s, and even 100s is growing fast. Long life can be a blessing, but it has its downsides.  The number of oldsters suffering dementia and Alzheimers disease is only one of the problems.  Another is that old bugaboo....finances.  We receive quite regularly solicitation letters from senior citizen residence centers asking for support of a fund for residents who have "outlived their resources." 

   What a shattering predicament!  "Outliving one's resources."  

    But saving for a long retirement is not easy.  It isn't even fashionable.  Recent survey data show that more than one in four Americans save no money for emergencies. One in five have enough to cover expenses up to three months up to three months,

    It's hard to guess where society is headed, but if working Americans are not saving for rainy days and retirement, and senior citizens are living longer and running out of financial resources. it's clear a serious social problem looms on the horizon. 


   "The War on Cash reflects the desperation of governments. They want to squeeze every last penny out of their citizens. And they are at wits’ end on how to cure the stagnation of the global economy that began in the 2008 financial crisis. So it really says that they are bankrupt, both literally, in the sense that they can’t pay what they’ve promised, and intellectually."  ~Joe Salerno

  There's growing interest in this subject all over the world.  Increasing government prohibitions on the use of cash make many people nervous.  Others don't care.  "I have nothing to hide" is their mantra.  

   The general feeling seems to be that 1/ It's dangerous to have much cash in one's possession.  2/ Money ought to be in a bank or in investments that yield some profit.  3/  Credit/debit cards and other electronic means of making purchases is safer than carrying cash.  

    The cash question is back in the headlines after a couple of major U.S. banks recently informed their safe deposit box holders they cannot keep cash and gold bullion in their boxes.  Cash payment of credit card debt, mortgages, car loans, etc. is being discouraged as well

    For a free-market report on the War on Cash we recommend: Transparently Totalitarian


    Kudos to the Wall Street Journal for its report on the dilemma facing the Federal Reserve. 

  "The economy probably will rebound from the first quarter, and inflation will probably see a bit of a pickup, which probably will allow the Federal Reserve to raise rates before the year is up.  That is too many probabilities to have much certainty on where the Fed is actually headed."  

   The Fed once expected to raise rates in early 2015.  That was bumped to June.  Now the guessing is the increase won't come until September...or later.  The first quarter Gross Domestic Product (GDP) was a puny 0.2 percent on an annualized basis.  The economy cannot seem to shake off its post recession slump.


 

  Negative interest rates put world on course for biggest mass default in history.

More than €2 trillion-worth of eurozone government bonds trade on a negative interest rate.
It's a bubble that is bound to end badly.

   The headlines above look to be typical journalistic hype.  Certainly, the prospect of a massive default in the global financial structure should not expected to supercede the bombast in Baltimore, the gay marriage question before the Supreme Court, or the horror in Nepal. But it's out there, getting more threatening by the day. 

  HOWEVER, financial bubbles aren't really "news" until they pop.  RISING DEBT 


The Clinton Campaign is Foundering

    "She’s been going politically bankrupt for a long time, and now faces the prospect of sudden collapse. If she’s got a winning defense, she better be quick about it. The ghosts of scandals past are gaining on her and time is not on her side." ~N. Y. Post < Columnist Michael Goodwin brings no joy to the Clinton Clan today, but what will be will be.  The possibility of a return of Hillary Clinton seems increasingly remote.

"Nearly one third of people who have some sort of savings plan
have amassed less than $1,000 for retirement."

    "Many say that the average person needs to save one million dollars for retirement, but a  recent piece by David Marotta, president of Marotta Wealth Management in Charlottesville, VA, noted that a 20-year-old in 2015 may have to amass up to $7 million to retire comfortably."  Americans' Pitiful Savings < Good guess by Mr. Marotta, but since no one on earth knows what a dollar will be 40 or 50 years hence it's only a wild guess. 

     Had the dollar was defined and redeemable in some tangible non-perishable substance like periwinkles or gold,  a better guess could be made about its future value. 


The End Times may be near.
But we don't think so.  

   The world buzzes with plenty of tales of financial collapse, horrid war destruction, and conflict galore.  Especially irritating are the long essays warning that "the end is nigh" but rare is the writer who offers any solution other than "vote the rascals out."

 

    Brandon Smith paints an unlovely picture of the challenges afoot in the world.

              "The most difficult reality of all is the reality that economic implosion is only the end of one struggle and the beginning of a new struggle. Our responsibility will not only be to fight against the machinations of elitists, but also to convince the world that the way of independence and freedom is more useful and preferable than the way of collectivist peasantry. Collapse is already upon us; now we must decide who will determine what happens next."

           What makes Mr. Smith's lengthy essay stand out is the specific recommendations he makes to the liberty-inclined reader.  It's not for the faint of heart. But it will appeal to the individual who suspects there's an economic train wreck ahead and they ought to do something to prepare for it.  Imploding Economy


VICE AND CRIME
Revisiting prohibition.

   "Probably, most people who currently agree that pot ought to be decriminalized (if not outright legalized) are not yet ready to extrapolate the principle to other arbitrarily illegal'drugs.' But – and here is the beauty of it – consciously or not, they have accepted, implicitly at least, that merely to ingest a substance, produce a substance, sell a substance – while perhaps a vice – is not a crime."  ~Eric Peters

  Our own descendants are surely bored with our well-worn remark "When I was born beverage alcohol was illegal and marijuana wasn't."  They probably classify that with old codgers' tales of walking to school in the snow. . . barefoot. 

     The Radical Independent Party (RIP) platform of 1994 said this about vice and crime:

Vice and Crime

The Radical Independent Party believes a distinction should be made between vice and crime, with perpetrators of crime hauled off to jail and kept there until they mend their ways. Vice, however, is another matter. Vice is harming oneself. Crime is harming the property or person of another. Vice (drug use) is filling the jails faster than they can be built making the United States first in the world in incarcerations per capita. (Russia, formerly #1 has slipped to #2.) The U.S. presently keeps many convicts in prison longer for vice (drug use/trafficking) than for murder!

     Recognizing the distinct difference between vice and crime would be a giant step toward social sanity.  It examines, however, the hypocrisy of throwing someone in jail for smoking the dried leaf of the cannabis plant while permitting smoking the dried leaf of the tobacco plant.  Both are vices.  One was made unlawful in 1937 while the other was widely (and lawfully) advertised to increase its sales.  

     Mr, Peter's column on the vice vs, crime issue is interesting.  Read it here

     Yes, we've heard the argument that "permitting" vice among adults may lead to injury to an individual and the resulting incapacity is injurious to society as a whole, therefore....

      Would society not benefit if overeating junk food, drinking excessive alcohol, and other damaging habits be made unlawful?  Certainly.  But the masses would not go along with it.  That's the point of Eric Peter's commentary. 


A Tax on Currency.
Or, maybe, do away with it altogether.

   We are quickly approaching a point in the development of modern society in which pocket currency is not needed, except for small transactions.  Talk of a "cashless society" arises from time to time, but Citi’s Willem Buiter trots the idea out once again and it may soon make its way onstage for full debate.  

    What'll it be?

*Abolish currency.

*Tax currency.

*Remove the fixed exchange rate between currency and central bank reserves/deposits.

 There will be a lot of resistance to going "cashless" and the nagging legal distinction between metal coins and paper Federal Reserve notes must be cleared up.  It could also lead to a hot debate about the trustworthiness of all digital media of exchange.  But a thorough public discussion of the topic might finally lead, at long last, to the answer to the question:  "What is a dollar?"  

  Dr. Gary North comments - - "Abolish Currency!"




   Crazy College Costs
A train wreck ahead for higher education.

   "In its most recent survey of college pricing, the College Board reports that the average fees for a 4-year, public state college – which includes tuition, room and board – was $18,943 for the 2014-15 academic year. For a public, out-of-state college, the price escalated to $32,763, and for private college? A whopping $42,419 – for the privilege of sitting in a building belonging to an institution with lofty name recognition.

   "To put that in perspective, the U.S. Census Bureau reported that in September 2014, the median, pre-tax household income was $51,939."  COLLEGE COSTS