QUESTION:
Mr Armstrong, thank you for all that you are doing. I was hoping to get your view on the Indian government banning large denomination bills. What do you think is the reason and why such a small window of time to get them turned in?
PB
ANSWER: Unfortunately, the theory is that cash prevents governments from maintaining negative interest rates. They want to “tax” the mere possession of money. Eliminate cash, and then they think they can stimulate the economy without creating inflation and they will be in total control. They view that the reason Marxist/Keynesian philosophy failed is because of cash. People can hoard money and thus exit the system. They cannot stop that unless they eliminate money.
This is what the NEW AGE of economics is all about. They next level of taxing you for merely having money. Indian Prime Minister Narendra Modi has announced that the 500 ($7.60) and 1,000 rupee banknotes will be withdrawn from the financial system overnight. This is all about taxes.
Everyone should pay attention here. Governments can simply cancel a currency overnight. The ECB wants to eliminate the 500 euro note and Larry Summers is arguing to end the $100 bill in the USA. These people want to tax everything and see that interest rates can be negative forever if they get rid of cash. They are totally insane.
