A CASHLESS SOCIETY AND GOLD

In order to enforce all the Legal Taxes and all the Policy Taxes that are currently crushing the middle class the government has figured that they need to track, record and then ultimately outlaw cash transactions.  If everything is electronic they can take out "their share" on a per transaction basis.  And then again at the end of the year.  And in between, if necessary,


So what's the remedy?

The major time tested remedy has always been GOLD.

Ah, you object,  "But gold isn't Money!"

Yes, that's a very fashionable objections.  But it is simple minded doggerel that rests on the misunderstanding of money..

What is Money?

Money, you say,  is simply a medium of exchange.  Everyone says so.

But what does that mean?

Anything and Everything can be a medium of exchange.

If I'm bigger and stronger than you and I want your car, my fist can be the medium of exchange.  I'll trade you a punch in the nose for your car.  What are you going to do about it?  Then my fist is money.  Or if I just have to threaten you and you turn it over, then my threat is money.  By your definition of money.

This is precisely why the Greeks and then the drafters of the Constitution in this country decided that only Gold can be money.  Because they were tired of a punch in the nose being money.  They knew money MUST BE A STORE OF VALUE.  That way nobody has power over your transactions.  You are the boss of your transactions.

This is the genius of the Greek conception of gold as money.  It is the basis for democracy - of the system of society wherein the Private Citizen has ultimate power over his own transactions.

And it is still so today.  More so than ever, because we are in a global economy. And if a government in one place decides to outlaw gold or tax it outrageously, there are always ways of trading it in another place.  Or another country.  It's not necessarily easy.  But it is well possible.

And it is the only form of money that provides any protection from the Punch In the Nose form of money currently being championed by dimwits thugs the world over.

QUANTITATIVE EASING IS A MASSIVE REGRESSIVE TAX ON SAVINGS OF THE HOUSEHOLD SECTOR

So, if we have a massive tax on consumption for the household sector, how come consumption remains robust in the United States?

Well, since everything produced in the country must be consumed or saved, we can either compensate the household sector in other ways - OR we can TAX the Savings which will force the Household sector to consume more of the measly earnings they are permitted to keep.

ENTER QUANTITATIVE EASING - the SAVINGS TAX

What is QE?  In short it is the practice of keeping real interest rates extremely low or negative.

In part it is the Government subsidizing the Banking Sector by purchasing unmarketable securities from the banking sector.  These securities on the open market would force rates ever higher to encourage investors to assume the risk of owning securities in danger of defaulting.

This hold rates artificially low.

In part it is the Government printing and buying its own bonds which subsidizes corporations, manufacturers, real estate developers and local Governments by keeping real interest rates negative - that is below the rate of inflation.

When one sector or group of sectors is subsidized another sector is penalized - or TAXED.  Which sector is the loser?  Depositors in Banks - or Savers - which is largely the Household sector.

So through Policy the Household sector - which is another name for the vast middle class is being subjected to massive Regressive Taxes both on the Consumption and on their Savings.

Ordinarily these massive regressive taxes would impel the Household Sector to A) leave the banking system.  B) leave the Corporate System.  and C) Enter into various entrepreneurial enteprises based on barter and cash transactions.

ENTER THE WAR ON CASH.

 THE ENDEMIC US CONSUMPTION TAX TARGETING THE HOUSEHOLD SECTOR


The chart above is usually interpreted as illustrative of the gap between US worker productivity and US worker compensation.

Another way of interpreting this chart is as the illustration of a massively regressive US Tax transferring wealth directly from the middle class to the top 1 percent.

How is that?

The gap the between the productivity and the compensation of US labor is exactly equal to a targeted CONSUMPTION TAX on the US household sector.

How is this a consumption tax?  Because as workers a forced to retain a declining share of what they produce - which is all that is meant when productivity growth outstrips wage growth - then the workers - who are synonymous with the Household Sector - have been stripped of their means of consumption - which is all that is meant by disposable income.

The fact that this Consumption Tax is imposed through Policy that favors The State and Corporations over the Household sector rather than by Tax Law is completely irrelevant.  Especially to the Household sector - the Workers - that comprise the vast middle class.

The fact that this trend has been going on for over 40 years proves that this Policy is both real and entrenched.

How does this benefit the 1 percent?  The ncreased output translates directly into Increased Dispoable Income for the employers of the Household Sector - which is to say The US Government and US Corporations.

But, unfortunately that's not the end of the sad story of the US war on the Middle Class.

NEXT CHAPTER:
QUANTITATIVE EASING IS A REGRESSIVE TAX ON HOUSEHOLD SECTOR SAVINGS

Volker Rule instituted in England

Britain's biggest banks to be forced to separate retail banks from investment arms

Bank of England fails to back down on ring-fence rules despite pressure from banking lobby

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The City's biggest banks must ring-fence their retail operations from riskier investment banks Photo: Getty Images

By Tim Wallace

9:35AM BST 15 Oct 2015

257 Comments

Britain's biggest banks will have to run their retail banking operations as independent banks, almost entirely separate from their investment banking and overseas operations, as the Bank of England made it clear that there will be no relaxation of the incoming ring-fencing rules.

As a result, regulators hope the high street lenders will be able to continue running the retail arms with no difficulties even if their investment banking arms get into trouble.

Basic services such as payments and bank account access should be able to continue even if the parent group collapses.

The new rules will apply to all of the big banks

Those ring-fenced units must hold bigger capital buffers to protect themselves against a downturn, and have their own independent IT, human resources, processing and risk teams.

However, in one minor concession, the retail banks will be able to pay dividends to their parents, as long as they tell the regulator first and show the payouts will not harm their resilience and stability.

• Former Barclays chairman: Bank ring-fence is redundant and should be scrapped
• We have better things to do than implement the ring-fence, says HSBC

The ring-fence rules apply to HSBC, Barclays, Royal Bank of Scotland, Lloyds Banking Group, Santander UK and the Co-operative Bank, as they all had core deposits of more than £25bn when this process began. Challenger banks which expect to grow to that size by 2019 also need to consider preparing for the changes.
Those banks' retail units will face their own stress tests as well as those applied to their parent group, under which the Bank of England's Prudential Regulation Authority checks to see how the bank will cope with tough economic conditions.
From 2019, each bank's retail banking arm must treat its investment banking operations as if it is an entirely unrelated company. That means for risk purposes, as well as capital buffers and even the financial terms of transactions, the retail arm cannot give other parts of the banking group any favourable treatment.
George Osborne, the Chancellor, said in July the Government would not back down on ring-fence rules
Cross-selling is still allowed, as long as it is carried out on commercial terms and the ring-fenced bank would be able to survive without those deals in place.
However, the changes are not costless.
The ring-fenced bank will have to hold more capital, as once the rest of the group is split off, the unit's risks become more concentrated. In addition, the retail bank had to hold more capital against its exposures to other parts of the group.

That is expected to amount to as much as £3.3bn extra capital. Next year the Financial Policy Committee will decide how much extra capital the retail arms should hold to cover their risk to the financial system, which could add another 3pc to those units' capital requirements.
In addition, the operational separation of the banking units is expected to cost roughly £200m per bank as a one-off cost, plus around £120m per year.
Analysts said the changes also present serious administrative challenges for banks.
“Ring-fenced banks will have to become autonomous from the rest of their groups in a whole host of ways – from needing their own risk management resources, to re-engineering their relationships with financial market infrastructures (including the Bank of England itself), and disentangling the complex financial connections between different parts of the group. The requisite investments in systems, data capabilities and compliance architecture will be considerable," said Deloitte's Clifford Smout.
“There is a lot of detail to digest here, and industry faces a challenge to incorporate all this new information into revised – and ‘near final’ – implementation plans for the regulators in just three months.”

IT's coming...

Sweden is becoming the world's first cashless society

By Duncan Geere World of tech 

Transactions are increasingly happening on smartphones

For decades, economists have been talking about 'cashless societies' - where all transactions are performed digitally. No country in the world has yet made that a reality, but a few are getting close, and the forerunner is Sweden.
Industrial technologists at Stockholm's KTH Royal Institute of Technology have just published a study that shows how fast cash is disappearing in Sweden. "Our use of cash is small, and it's decreasing rapidly," says Niklas Arvidsson, an author of the study.
Arvidsson's team calculated that there are just 80 billion Swedish crowns (about €8 bn) in circulation in the country's wallets and cash registers - down from 106 billion just six years beforehand. "And out of that amount, only somewhere between 40 and 60 percent is actually in regular circulation," he says.
Walking the streets of Sweden's second city, Gothenburg, it's almost impossible to find a shop that doesn't accept bank cards for payment, and most locals tend to carry no coins or notes on their person. Many also make use of an app called Swish, a collaboration between Swedish and Danish banks that permits fast, simple money transfers on smartphones.

Money Laundering and Terrorist Financing

Banks are also going down the same path - several branches have opened that won't accept cash. "At the offices which do handle banknotes and coins, the customer must explain where the cash comes from, according to the regulations aimed at money laundering and terrorist financing," says Arvidsson. Any suspicious cash transactions are reported to the police.
But there is concern, noted in the report, about those being left behind by the transition. Homeless people and undocumented immigrants, as well as the elderly, can struggle to access digital services through computers and smartphones. In a cashless society, vulnerable sectors of society will be increasingly reliant on Sweden's generous social security system.
Also, Arvidsson says it may be difficult to replicate Sweden's success internationally. "Swish is a brilliant idea, but to introduce it internationally is a challenge, not least because it takes a long time to change other countries' banking systems from scratch," he said. "But it is not impossible that a Swish-based banking revolution can also occur abroad."