In recent years, I’ve been predicting that the governments, particularly those of the E.U. and the U.S., will seek to eliminate paper currency. The objective will be to make monetary transactions between private parties as difficult as they can, by requiring that all transactions take place through financial institutions. If they can do this, they will effectively make a run on banks impossible in the future as the banks will simply shut off the money tap, as the Greek banks did. This power will additionally make negative interest rates and confiscations more possible.
A few years ago, this forecast was seen by most as poppycock, but the prelude has now begun, with most of the world’s banks disallowing large transfers and some lowering these amounts over time. Many governments are aiding the effort, requiring reporting on some transfers.
At some point, governments and banks will seek to eliminate paper currency, completing the encirclement of private party monetary transfer. From that point on, it would be illegal for any transfer of money to be undertaken except through a financial institution (most probably through the use of a plastic card or smartphone).
This post was published at International Man
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