Guest Post from Money Metals Exchange
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Mike Gleason (Money Metals Exchange): I wanted to ask you about a tweet you sent out earlier this month – and for people who want to follow you there, it’s @JamesGRickards – but in that tweet you wrote:
Just informed that Scotia Bank branch is now a gold buyer only. Will not sell to retail clients. Get it while you can. War on gold is here.
Expand on that here, Jim. What did you make of that move and why did you make those comments?
Jim Rickards: Sure. We have a war on cash. I think that’s pretty well known to the listeners, so we see it everywhere. India just abolished its two most popular forms of cash. They literally woke up one day and they said, I think it was the 2,000 rupee note and the 1,000 rupee note, if I’m not mistaken. I believe those are the right denominations. Not worth a whole lot by our standards, worth like $15 or whatever. But they were, by far the most popular and widely used, widely circulated bank notes in India. And the government just woke up and said they’re all illegal. They’re worthless. Just like that. Now what they said is, ‘Now you can take them down to the bank and you can hand them in, and we’ll give you digital credit in your account – oh by the way, the tax inspector’s going to be there asking you where you got the money.’ So obviously it was designed to flush out people suspected of tax evasion.
Although, in fact it turned out that there weren’t that many tax cheaters. They were just people who actually preferred money. They preferred cash and they were forced out of the system, forced into this digital system. And there were all kinds of negative repercussions of that. So, there’s a whole country that abolished the most popular forms of cash.
Sweden is very close to cashless. You go around the United States, you might have some, what we call in Philadelphia ‘walking around money.’ I can look in my wallet and there’s probably some 20s and maybe a couple 50s in there, but when you transact, you get paid digitally. You pay your bills with automatic debits. You transfer money with wire transfers. You use your debit card. You use your credit card, etc. You shop on Amazon, you pay with a debit or credit card, etc. maybe PayPal. And I do that. Everyone does that. I’m no different. I’m not exempt from or outside the system.
This post was published at Deviant Investor on July 4, 2017.