secret war THE SECRET WAR

What the “War on Cash”
Is Doing To Your Income,
Savings, Life and Liberty,
And How To Survive It

(Third Revised Edition)


Craig R. Smith


Lowell Ponte


The Secret War

Craig R. Smith is Chairman and Founder of Swiss America Trading Corporation. He is a frequent guest with Neil Cavuto on Fox Business and Fox News, and on other business media.

Lowell Ponte is a former think tank futurist and former Reader's Digest Magazine Roving Editor whose work has appeared in the Wall Street Journal and elsewhere.

Books by Craig R. Smith:

Rediscovering Gold in the 21st Century: The Complete Guide to the Next Gold Rush
Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil (co-authored with Jerome R. Corsi)

Co-Authored by Craig R. Smith and Lowell Ponte:

Crashing the Dollar: How to Survive a Global Currency Collapse

The Uses of Inflation: Monetary Policy and Governance in the 21st Century

Re-Making Money: Ways to Restore America’s Optimistic Golden Age

The Inflation Deception: Six Ways Government Tricks Us…And Seven Ways to Stop It!

The Great Debasement: The 100-Year Dying of the Dollar and How to Get America’s Money Back

The Great Withdrawal: How the Progressives’ 100-Year Debasement of America and the Dollar Ends

Don’t Bank On It! The Unsafe World of 21st Century Banking

We Have Seen The Future And It Looks Like Baltimore: American Dream vs. Progressive Dream

Money, Morality & The Machine: Smith's Law in an Unethical, Over-Governed Age

Swiss America Trading Corporation
15018 North Tatum Blvd, Phoenix, AZ 85032


Copyright © 2019 by P2 Publishing. All rights reserved.


“Whenever destroyers appear among men,
they start by destroying money,
for money is men’s protection
and the base of a moral existence.
“Destroyers seize gold and leave
to its owners
a counterfeit pile of paper.

“This kills all objective standards

and delivers men into the arbitrary power

of an arbitrary setter of values.”

-- Ayn Rand

Atlas Shrugged

The government of the United States and many of its global allies are fighting a secret war – a war to destroy your right to own and use cash.

You need to know why this war is underway, how its battles are being intensified and fought, and what WMDs (Weapons of Mass Destruction) – call them Weapons of Cash Destruction – are being used to separate you forever from your tangible money.

You and your family are already on this battlefield, targets caught in this conflict, whether you know it or not. Wake up and you have the power to win; to take a few easy steps that can outsmart and defeat the forces that are trying to conquer you, confiscate your cash, and impose a new worldwide serfdom on humankind.

The United States is quickly going "cashless," with consumers buying most things from automobiles to hamburgers via bank loans and credit cards.  Americans carry more than a trillion dollars on "debt cards."  Banks, for the moment, still tolerate relatively small amounts of cash transactions; but they would prefer to move solely to "cashlessness" – in which more and more of what we need is not earned or saved, but borrowed on credit for high interest.

Visa and Mastercard in 2017 pocketed approximately $43 Billion in transaction charges for card use. [1] And a growing number of major merchants likewise want – and some demand – the security and ease of customers using only credit or debit cards, not cash or checks, for purchases.

Government, above all, has been pushing for the fast-arriving cashless society.  Cash and its transactions can be hidden and kept private; despite your bank being required to spy on you and report to the IRS any "unusual" financial activity.  Government wants every financial transaction you make to be taxable, trackable, hackable, blockable, and therefore usable as a tool to enrich and empower Big Brother. [2]

When a "cashless" government turns authoritarian, it can not only monitor and tax everything you buy, but also ban purchases – ranging from foods it deems unhealthful to guns it deems dangerous.  Without the approval of Big Brother, you can be denied the ability to buy what you want and need.  Purchasing or repairing once-legal firearms, for example, can instantly be made impossible by preventing your credit card from being able to pay for it.

This authoritarian “cashless society” forces people to depend on credit cards, and on renting things instead of owning them. It deems cash as something only outlaws use. Government then can control what people are permitted to buy by regulating and intimidating banks and credit card companies. This is already starting to happen in the United States in ways that circumvent and destroy our Constitutional rights.

How far can a power-hungry government go by using “cashlessness” to control its citizens? It can become more totalitarian than the dictatorships imagined by dystopian novelists George Orwell in Nineteen Eighty-Four and Aldous Huxley in Brave New World. This ominous power is already beginning to be enforced in one of the world’s most powerful countries.

Enter the Dragon

“The cashless economy is racing ahead in China,” writes journalist Donna Lu, “and its model could be the future for the rest of the world….The system has been described as dystopian in Western media.” [3]

Communist China’s totalitarian government is replacing paper money with no “money” at all, with a “cashless society.” And advanced nations around the world, from Sweden to the United Kingdom and the United States, are rushing to do likewise. This global “War on Cash,” now being fought on many battlefields with a variety of weapons, will decide the future of human freedom.

“Gold is money. Everything else is credit,” said banker J.P. Morgan in 1913. Gold needs nothing else to give it value, but paper money needs backing – usually from a government that makes it “legal tender” and, by printing excessive amounts, can shrink or destroy this fiat currency’s uncertain worth.

China’s “cashless society” will be based on financial credit combined with political credit. China’s state-imposed system of “social credit” (shehui xinyong), which could rule up to 1.3 billion of its citizens by 2020 or soon thereafter, will assign each person a score based on their loyalty to the state and Communist Party. Patriotism, hard work, “pro-social behavior” - such as being a blood donor and a good driver - and buying Chinese-made products while avoiding “materialism” will be rewarded. Those who do best will receive “green channel” benefits from the state.

But woe unto those who are overheard speaking ill of the government, try to look up forbidden topics on the Internet, smoke, drink, or get traffic tickets. When journalist Liu Hu recently tried to book a flight, CBS reported, he was told he was banned from flying because he was on the list of “untrustworthy people.” When ordered by a court to apologize for recent tweets, Liu did so – only to be told by the communist judge that his apology was “insincere.” [4]

“I can’t buy property,” Liu says. “My child can’t go to a private school. You feel controlled by the list all the time.” The ‘Social Credit’ system reportedly takes into account, “what books citizens read, what they buy, and how long they spend playing video games.” Bad social credit could eliminate your possibility of starting a business, staying in luxury hotels, and buying or renting property. Under limited testing of this surveillance program, people with bad social credit have already been blocked from booking more than 11 million airline flights and 4 million high-speed rail trips. Worse, bad social credit could deny you health care from government-licensed doctors or hospitals. This political power to extend or deny you credit is literally the power of life or death; because in a “cashless” society the only thing you have is credit.

Today in China, computer algorithms will track citizens online to decide if they are worthy of social credit. The goal of this, according to Martin Chorzempa at the Peterson Institute for International Economics, “is algorithmic governance” that can brand you an outlaw that other citizens risk their own safety by helping. [5]

One version of China’s system will automatically notify people via their smartphones if they are within five hundred yards of a “deadbeat” with bad credit who is to be shunned or “debt shamed.” [6] This, of course, also reminds citizens that a brutal Santa Claus government in Beijing is always watching and can reward or punish them.

Big Tech Merges With Big Brother

China is creating this near-total surveillance of citizens by combining government data with the private corporate data by using artificial intelligence (AI). Google, a typically left-of-center company, has helped China develop Dragonfly, an advanced AI program to spy on China’s citizenry. When it came to helping develop AI for the U.S. military’s Project Maven, however, Google reportedly decided that to help the U.S. was wrong, and quickly gave in to radical pressure to drop the project. [7]

At the 2019 World Economic Forum in Davos, Switzerland, radical billionaire George Soros called on President Donald Trump and other leaders to oppose China’s “social credit” use of AI, which he called a “mortal danger” that could “give Xi Jinping total control over the people.” It will, warned Soros, “subordinate the fate of the individual to the interests of the one-party state in ways unprecedented in history.” [8]

“I find the social credit system frightening and abhorrent,” said Soros. “What I find particularly disturbing is that the instruments of control developed by artificial intelligence give an inherent advantage to authoritarian regimes…. For open societies, they pose a mortal threat.” [9] Yet in America, the leftist politicians Soros supports are imitating the “cashless” authoritarian tactics of Communist China to destroy constitutional rights.

As Heritage Foundation scholar James Roberts writes, China’s dictator-for-life Xi Jinping is using Chinese companies such as telecommunications giant ZTE “to power his unprecedented and aggressive implementation of a ‘social credit’ system” to achieve “world domination by 2049 – 100 years after Mao proclaimed that goal.” ZTE has inked contracts to share its technologies and surveillance potential with North Korea, Iran, and – in a last minute effort to save Marxist dictator Nicolas Maduro – Venezuela. [10]

At Davos, George Soros also denounced Xi Jinping’s global Belt and Road initiative, which has lured poor third world nations into borrowing huge sums from China for Chinese-built projects such as railways. When these projects fail to produce promised economic benefits, China has demanded repayment in the form of national ports and airports. China has already used such neo-colonialist tactics to demand ports or airports that extend its military reach in Kenya, Zambia, Sri Lanka, and Pakistan. Its “cashless” credit control of individuals and small companies is akin to colonizing nations by debt. [11]

The world’s governments are rushing to banish cash, to create their own unnatural shortage of freedom by making legal only those transactions that can be tracked. Economic privacy will vanish in a “cashless society” because every purchase is carried out via a cell phone or computer – and is monitored by the government. The government will know what you buy, what you eat, and where you are at every moment of purchase….and will judge you accordingly.

As we are about to show you, exactly the same pattern of social control in China is emerging in the United States and other countries rushing toward the “cashless society.” Governments have already begun to tell us not only how much of something we can afford – but what we can and cannot buy. [12]

If only gold is money, and paper currency is at best only quasi-money in which you can at least make private purchases, then the credit card world that is our “cashless” future is no money at all. You cannot count on paper currency, paper investments, or paper promises of a government-guaranteed retirement, and you definitely cannot trust plastic credit, which the government can erase instantly.

Welcome to the dawning new dark age of “cashless” economics, as devised by China. Ironically, China in the 7th Century A.D. invented paper money, later forcing its residents to exchange their silver and gold coins for this paper money that the government could easily print in any amount it wished. China even invented paper money with an expiration date, much like our paper money today whose value is constantly devalued by deliberate government-created inflation and overprinting.

Your ability to live in the dawning economy may depend entirely on the political whim of those who monitor your life and politics to determine how much credit they will permit you to have. Your future freedom may depend on having the courage to take important precautions now, as you will see.

Humankind will eventually rediscover the Framers' constitutional money.  We will return to the 5,000-year tradition of precious metal that needs no government or computer to give it value. 


Taking the World “Cashless”

In September 2017, Hurricane Maria devastated Puerto Rico. The tiny Caribbean island, already struggling with a $74 Billion debt, fell into darkness as the storm knocked out its electricity. Bank ATMs and credit card verification stopped working, leaving people unable to buy food and other necessities with their credit and welfare cards. Store security guards admitted only customers who could pay in cash. The Federal Reserve was forced to fly “a jet loaded with an undisclosed amount of cash” to the stricken island, Bloomberg News reported, to meet payrolls and help avert disaster as peoples’ money ran out. [13]

“In a cashless world, you’d better pray the power never goes out,” says Ryan McMaken of the Mises Institute. [14] If you thought Puerto Rico was bad, take a slightly different recent crystal ball glimpse of the future as it appeared in India:

Frantic customers shove their way into already-crowded shops. Many have fistfuls of cash they are desperate to trade for whatever their savings can buy.

Only minutes earlier, the government had made a surprise announcement – that two of the biggest paper currency notes would, within hours, become worthless.

In one shop panicked customers pay the equivalent of $2,800 for an ounce of gold, the ancient and reliable world money. In another, frenzied buyers reportedly are paying $2,294 an ounce for the precious yellow metal because the government money they had trusted was suddenly melting, losing its value minute by minute before their eyes. [15]

Could this scenario really happen? It already did, on November 8, 2016 in India. This was a glimpse of what our future might be as governments begin restricting and outlawing the use of cash.

This sudden action was to catch tax evaders who had large secret holdings of “black money” in cash, said Prime Minister Narendra Modi, head of India's ruling Hindu Party. His surprise decree forced them to exchange their corrupt money for new currency at a bank – and be thoroughly identified in the process. Their alternative was to watch their money lose its value if they did not want to explain to the government how they acquired so much while paying so little in taxes.

Modi called this “demonetisation” because it involved losing the traditional money of India that people could have saved for generations. In its place, people would be pushed to accept new “money” – bank accounts, credit cards, and other transactions that the government could monitor and potentially tax.

India had been the opposite of a “cashless” society. 96% of transactions there are done using cash, compared with only 8% of purchases in the U.S. and 3% in Sweden. And 86% of transactions in India have been done with the 500 and 1,000 Rupee currency notes – worth roughly $7.50 and $15 – that Modi banished and was partly replacing with new bills.

The decree imposing currency controls plunged the huge nation of 1.3 billion people into chaos. ATMs and banks stopped issuing the old money, but the replacement currency was too big to fit in ATMs and, by design, too little was available. 

Air Force airplanes and helicopters moved thousands of tons of new paper money to keep the country running, and a currency control strict limit of $60 per day in Rupees was imposed on how much most people could get from their bank. [16]

India's “demonetisation” was a large-scale test of what globalist Progressives call the “cashless society,” their ideological vision of the human future. Some believe it was done at the urging of the U.S. Agency for International Development (USAID) “Catalyst: Inclusive Cashless Payment Partnership” and related globalist activists. [17]

In a cashless world your transactions would be an open book, and government can track you or even turn off your ability to buy and sell via your computer, cell phone or credit card the Bible's Book of Revelation (13:17) describing only those with “the mark of the Beast” being able to buy or sell. [18]

Historically, gold money was replaced by unbacked paper fiat currency, through which you can be taxed simply by inflation; by government printing more money out of thin air. Soon you will have only electronic blips in a bank computer that can be changed into world government currency at the flip of a switch. Saving will become impossible, so your account will measure only your credit, debt and interest payments.

How close are we to such a future? Consider a few examples of how the government now confiscates cash:

*Denny Hastert became a prisoner of this War on Cash. The former Republican Speaker of the House was caught in a legal trap [19] used in this war. Hastert foolishly believed he was free to withdraw his own cash money from his own bank account without notifying the government. He was convicted of this once-innocent act that has become a crime. As a result, at age 74, Hastert in June 2016 was sentenced to serve 15 months in prison and pay a $250,000 penalty.

*Near Muskogee, Oklahoma, sheriff deputies pulled over Eh Wah, manager of a Christian rock band from Burma. In his car they found $53,249 cash in band earnings, CD and souvenir sales, personal money, and donations earmarked to go to a Christian church in Burma and a Christian orphanage in Thailand. The deputies took it all when they were dissatisfied with answers from Wah, for whom English is, at best, a second language. This put the burden of proof on him to show that the money was legal. [20]

*In Arlington, Virginia, Army Sergeant Jeff Cortazzo had been saving from his paychecks for his daughter’s education since around the time of the financial crisis in 2008. After several years, he decided to redeposit this cash in a bank but was afraid it might be taxed again, so the bank teller told him to make deposits of less than $10,000. After he took this advice, the government seized his $66,000 college fund. After a long and costly legal battle, it returned only $45,000. This innocent man who committed no crime lost $21,000. [21]

*Virginia State Police stopped Victor Luis Guzman for speeding, then confiscated $28,500 in his car. A Pentecostal Church secretary, he was carrying parishioners’ donations. The police refused to return this money until an attorney who served in the Justice Department’s Asset Forfeiture Office during the Reagan Administration took the case pro bono. [22]

*In Athens, Georgia Andrew Clyde, a Navy veteran, saw the government seize nearly a million dollars from the bank account of his small firearms store. His “crime” was having an insurance policy capped at $10,000, so he and his staff never carried that much in cash when going to the bank to make deposits. It cost Clyde more than $150,000 in legal and other expenses, plus a fine of $50,000 to get the rest of his money back. “I did not serve three combat tours in Iraq only to come home and be extorted” by my government, Clyde told a congressional hearing in February 2015. [23]

*In Fairmont, North Carolina, country store owner Lyndon McLellan saw the IRS seize $107,000 from his bank account. The IRS then offered to return half his money if he signed an agreement to let them keep the other half. He refused and, with growing publicity about his case on Fox News and elsewhere, the IRS finally returned his money without explanation. [24] During legal battles, McLellan noticed an affidavit from a state official. The Department of Justice has an Equitable Sharing Program that gives state and local law enforcement agencies a share of the proceeds of forfeiture opportunities they give to the Feds.

Today’s “Army” of Cash-Grabbers

The government now confiscates cash and other property from those who used to be regarded as law-abiding citizens, but who now have reason to fear merely carrying cash.

Welcome to the world of civil asset forfeiture, which in 2015 saw police confiscate more than $5 Billion from people. This was more than all the money stolen that year by burglars.

“The Civil Asset Forfeiture program has its roots in English law that American colonists rebelled against,” writes Fox News reporter Doug McKelway. “Their rebellion was ultimately codified in the Fourth Amendment, which reads, in part: ‘The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated…’”

“Despite that unambiguous language, civil asset forfeiture was revived in the 1930s Prohibition era against bootleggers,” McKelway continues. “It was revived again in the 1980s war on drugs and continues to this day.” [25]

In civil asset forfeiture, a police officer can confiscate a citizen's cash or other property; charge the money but not the citizen with criminal activity; and keep the money if that citizen is unable to prove that he or she legitimately owns the cash.

This process circumvents constitutional rights. You are not “innocent until proven guilty.” You are typically not even charged, so you have no right to a day in court. The burden of proof is on you to prove that your money or other property did not come from criminal activity.

Texas police seized over $200,000 from the family of Lisa Olivia Leonard, although neither she nor her relatives were ever charged with any crime connected to the cash. The U.S. Supreme Court refused to consider her case, Leonard v. Texas, but Justice Clarence Thomas wrote of it: “This system – where police can seize property with limited judicial oversight and retain it for their own use – has led to egregious and well-chronicled abuses.” Because “the law enforcement entity responsible for seizing the property often keeps it, these entities have strong incentives to pursue forfeiture.” [26]

A national study reported by Fox News columnist Barnini Chakraborty “found 60 percent of the 1400 municipal and county agencies surveyed across the country relied on forfeiture profits as a ‘necessary’ part of their budget.” [27]

Civil asset forfeiture is a “‘gold mine’ that lets the government take ‘little goodies,’” is how former New Mexico city attorney Pete Connelly described the process to USA Today. [28]

The worst asset forfeiture law reigned briefly in the city of Helper, Utah, where individual lawmen could receive 25 percent of whatever money or assets they seized. All that an officer needed to confiscate someone's million-dollar house or luxury car might be to find a fragment of a marijuana cigarette on or in the property.

When the highway robber wears a badge, some victims are too poor to hire a lawyer and fight back. Other citizens despair of regaining their cash when they cannot prove the seized money came from their private savings, and the legal case would pit their word against a law enforcement officer’s.

Consider some other recent incidents:

*A law enforcement officer pulled over 81-year-old Nevada resident James Huff over a minor traffic violation. The officer asked Mr. Huff if he had any illegal substances “or large amounts of currency,” according to the Heritage Foundation. The officer seized $8,400 in cash, then “immediately presented Mr. Huff with a ‘Disclaimer of Ownership’ form, attempting to convince the octogenarian to sign away all legal interest in his money right there on the side of the road.”

“Huff refused, intending to challenge the seizure,” writes Jason Snead of the Foundation’s Daily Signal. “Six months later, the Apache County Attorney’s Office published a generic notice in a local paper that the office intended to forfeit ‘$8,400 in currency.’”

“The notice gave no specifics, so Huff and his lawyers did not know that the notice was for his money. As a consequence, he missed the deadline to file a claim, and a judge ruled that he had lost the opportunity to challenge the seizure. The money was ordered forfeited by default.” [29]

*Phil Parhamnovich was pulled over in Laramie County, Wyoming for improper lane use and not wearing a seatbelt. The state Highway Patrol officers then asked if he was carrying “a large amount of cash,” a weapon, or specific illegal drugs, according to the news webzine Vox. The officers seized and kept $91,800 that Parhamnovich had saved to buy a music studio. [30]

“We’re going to let you go as long as you sign this waiver,” the officers said. The waiver stated that the signer would “desire to give this property or currency, along with any and all interests and ownership that I may have in it, to the State of Wyoming Division of Criminal Investigation, to be used for narcotics law enforcement purposes. If the property or currency cannot be used for narcotics law enforcement purposes, I desire that the property or currency be disposed of as the Wyoming Division of Criminal Investigation sees fit, in accordance with law.”

As such waivers make clear, officers are now hunting for cash they can seize and are quick to ask people they have stopped to sign over the rights to their money without consulting a lawyer.

Frightened and unable to get an answer as to what the officers would do if he refused, Parhamnovich says he signed the waiver and was let go with only a $25 ticket for not using his seatbelt. He went through a prolonged fight he describes as “complete hell,” including a court hearing he says he was never notified about, trying to get his money back.

*Robert Miller of Illinois was pulled over for speeding in Wyoming, but faced no criminal charges. Police, however, seized $470,000 in cash, claiming it was somehow associated with drug trafficking. The state refused to return his money. [31]

Some small towns used to be “speed traps” that picked the pockets of motorists passing through. Thanks to asset forfeiture, some towns and states now are “cash traps” that squeeze thousands of dollars from people never charged with or convicted of any serious crime.

*Californian Tan Nguyen was pulled over for going 78 mph in a 75 mph zone by a deputy who, according to his dashcam video and audio, reportedly asked Nguyen, “How much money you got?”

Nothing illegal was found in the vehicle, but the deputy took $50,000 in cash and $10,000 in cashier’s checks. When Nguyen, who had won the money at a Nevada casino, questioned why his car was being searched, the deputy replied:

“Because I’m talking to you…well, no, I don’t have to explain that to you. I’m not going to explain that to you, but I am gonna put my drug dog on that (pointing to money). If my dog alerts, I’m seizing the money. You can try to get it back but you’re not…. You’ll burn it up in attorney fees before we give it back to you.”

(A drug-sniffing dog can also be trained to “alert” to subtle officer cues. The law has authorized the asset forfeiture of objects carrying detectable traces of cocaine or other illicit drugs, however small, which reportedly is the case with as much as 90 percent of U.S. currency notes in circulation. By this standard, up to 90 percent of the cash in your wallet can be “linked” to drug use and seized right now.) [32]

The deputy then offered Nguyen a deal: If he surrendered the cash, the deputy would let him keep the cashier’s checks and his car. If not, the deputy would seize it all, have the car towed away, and Nguyen “could walk,” be left alone on foot in a desolate stretch of desert. [33]

The Feds Expand Their “License to Steal” Your Cash

On July 19, 2017, then-Attorney General Jeff Sessions issued an order greatly expanding Federal-State-Local cooperation in forfeiting assets. He called the order “federal adoptions,” a program that allows state and local officers to seize cash or other property, then collect up to 80 percent of the proceeds by turning it over to the Federal Government to forfeit under federal law. [34]

“With care – we’ve gotta be careful – and professionalism, we plan to develop policies to increase forfeitures,” said Sessions. [35]

Reining in this power has 84 percent public support, as well as the bipartisan endorsement of the 2016 Democratic and Republican Party platforms, according to Nick Sibilla of the Institute For Justice. Attorney General Sessions’ move to enlarge forfeiture was opposed almost three to one by those in a Morning Consult/Politico survey, with only 19 percent supporting Sessions. [36]

“More than half the country has enacted civil forfeiture reform since 2014,” writes Sibilla, with eight states restricting or banning adoptive forfeitures. But in other states, improperly-seized assets can be made legal if transferred to the feds for forfeiture under federal law. By this means, wrote one USA Today columnist, “in adoptive forfeiture cases, agencies can bypass state protections for innocent property owners.” [37]

“The fact that Attorney General Sessions is going all-in on this really is offensive,” said Kentucky Republican Senator Rand Paul. But when the 2018 Omnibus spending measure arrived, it contained no language reforming civil asset forfeiture, a measure widely popular with the public but not necessarily popular with local law enforcement. Or perhaps lawmakers privately agreed with Sessions that such punishing “wealth redistribution” from the “bad guys” to the “good guys” might sometimes be abused, but that it should continue. [38]

You, too, are a casualty of this war if you have a bank account and do not know that your bank is required to spy on you. We are rushing into a future where merely possessing cash, tangible money, could soon be a crime.

Cashing In

The Fed was chartered to furnish an “elastic” currency. [39] Progressive politicians had been frustrated that the inelastic, hard money gold standard prevented them from printing endless quantities of dollars to expand the government. The Fed has “protected” our currency so well that today’s debased U.S. Dollar, no longer backed by anything, has roughly two pennies of the purchasing power of the 1913 dollar.

The Fed in little more than 100 years has become a central planner in the U.S. economy. Most Fed policymakers have been Keynesians, acolytes of the late British economist John Maynard Keynes. Booms and recessions in the business cycle could be leveled out, Keynes taught, if central banks injected stimulus money into a down economy and increased taxes during up times. (Later we shall discuss what today’s socialist Members of Congress prefer: Modern Monetary Theory, which looks Keynesian at first glance, but which advocates perpetual government stimulus spending and never-ending higher taxation.)

A dollar taxed from the rich and given (via government) to the poor should generate a “multiplier effect” of up to $1.50 or more worth of economic stimulation, Keynes believed, because the poor had to spend this money immediately, not save it. This is supposed to increase the “velocity” of dollars from one person to the next, thereby boosting prosperity. By this same logic, Keynes wrote of the “paradox of thrift,” that it is bad when people save money, because this slows its circulation in the economy.

Keynes’ theories have failed in the real world. His stimulus works only in primitive economies. In advanced societies, every dollar of stimulus spending produces only 29 cents or less of growth; a terrible investment of taxpayer money. But his ideas have made government bigger and more intrusive, and the economy more distorted.

Cashing Out in Wonderland

The Fed has largely used up its bag of such monetary tricks. Like an addictive drug, its injections of newly-minted money no longer stimulate. Its debt manipulations such as Quantitative Easing no longer work.

The Fed drove the interest rate at which government and the giant corporations can borrow to almost zero for President Barack Obama’s 8 years. Even the Fed’s economists know that in the long run this will destroy the economy for those needing interest income, such as elderly bank savers and lenders. The government, however, is totally addicted to borrowing at zero interest and lacks the revenue to cover its huge debts if interest rates rise.

The Fed and other Progressive central banks around the world have an odd solution that brings us back to cash: let the interest rates fall below zero. Fall through the looking glass with Alice in Wonderland, many neo-Keynesians now promise, and somehow these even-steeper negative interest rates will cause amazing new economic stimulus.

“Like chemotherapy, negative interest rates are a harsh medicine,” writes Bloomberg Business reporter Peter Coy. “It’s disorienting when people are paid to borrow and charged to save.” [40] It only works when money becomes a drug that distorts reality. Only one thing stands in the way of this Central Bank miracle solution, writes Coy, and that thing is cash. “As long as paper money is available as an alternative for customers who want to withdraw their [bank] deposits, there’s a limit to how low central banks can push rates,” writes Coy.

“In the absence of paper money,” writes MoneyAndBanking, “central banks can reduce the nominal interest rate as far as they want… Very negative interest rates could help battle deep economic slumps like the Great Recession that began in 2007.” The biggest borrowers, the government and giant corporations, could have money at essentially no cost, paid for by interest that used to be paid to thrifty savers. But if people have the option to withdraw their bank savings in cash, millions will do so rather than earning no interest while paying a hefty fee to the bank. The cashless society makes us prisoners. Cash limits our bank’s ability to lower interest rates, because we are free to take our savings in cash and leave. [41]

The Hot War On Cold Cash

If people wish to withdraw their cash, why would the banks not just let them take their dollars and go? The answer is that doing so might unravel today’s economic grand illusion and bring the whole game crashing down.

Total cash in the U.S. financial system is in the neighborhood of $1.36 Trillion. Americans also hold perhaps up to $10 Trillion worth of “money” in accounts in banks and other niches of the financial system.

The nightmare here is that market equities, bonds, mortgages, commercial paper and other wealth based on debt, and derivatives, add up to roughly $337 Trillion. If even a tiny panic or “run” on the system drove people into trying to cash out even 1% of these holdings, notes one research firm, these institutions would not have the physical cash to do so. [42]

This is what made the 2008-2009 crash so dangerous. Many people rushed to convert paper holdings to paper cash, which almost crashed the system and the dollar. The “War on Cash” is happening because cash has become intolerably dangerous to the giant money mirage built mostly out of debt paper. See the paper moon? See the cardboard sea? It’s all make-believe, Alice. It's faith-based economics, magic that works only as long as people believe the illusion.

Our unbacked fiat currency itself is also an illusion. Do not be surprised when the International Monetary Fund (IMF) takes away the U.S. Dollar’s monopoly as the Global Reserve Currency and gives the Chinese Yuan a share of that once-exclusive status. You will not want to be wholly invested in dollars or dollar-denominated stocks, etc., if or when that day comes – unless you have diversified a portion of your savings into gold.

Imagine a run on banks and digital funds, with millions of panicked people demanding dollars instead of the investment paper they already have. Cash could crash the whole system. This, say Progressive globalists, is why cash ultimately must be killed. People must stop believing that they have the choice to flee into cash. That option must soon be diverted, thwarted, blocked and ultimately eliminated forever.

Stigmatizing Cash

The United States Government is fighting against cash on many fronts, including its apprehension of former Republican Speaker of the House Hastert. Since 1970 the government has required banks to report any cash withdrawal or deposit of $10,000 or more.

In recent years a secondary crime was created called “structuring,” which means withdrawing or depositing some amount less than $10,000 with the intent of avoiding the transaction being reported to the government. As we noted in a research paper, this is almost Orwellian, the sort of thought crime one finds in George Orwell’s dystopian novel 1984. Hastert was indicted for “structuring,” for the crime of withdrawing less than the amount that must be reported to the government. [43]

Your bank is required to report to the government any financial behavior on your part it deems “suspicious” or “unusual.” If you withdraw $500 over several weeks for big weekend yard sales, your bank might report this as “unusual,” flagging you for government surveillance. Withdrawals and deposits in cash – and especially in $100 bills – will arouse more suspicion than doing your banking by check, credit card or electronic transfer. The aim is to make cash too troublesome to carry for large purchases, and to make government financial control absolute. [44]

Between 18% and 19% of total reportable income in the United States is effectively off the books, hidden from the government, according to a study by Edgar Feige of the University of Wisconsin-Madison and Richard Cebula of Jacksonville University in Florida. [45]

This income – from drugs, prostitution, private gambling, home repairs, and a thousand other things paid in cash – could, Feige and Cebula estimate, have harvested half a trillion dollars in tax revenue for the government.

Cash makes it easy for criminals to thrive in an economic underworld of untraceable illicit transactions. A cashless society, say advocates, would drag this underworld out of the shadows and into disinfecting sunlight. In a cashless society, they say, crime would not pay as well as it does today.

“Do you see what is happening?” wrote libertarian journalist Lew Rockwell. “Simply using cash is enough to get you branded as a potential criminal these days.” [46]

Cash and Carry Tax

In a future cashless society, as we have written, everything will be “hackable, trackable and taxable.” [47] If a government official wishes, he can know within seconds your whereabouts and everything you have recently bought or sold. 

Cash will eventually be outlawed or restricted, with capital controls already coming down hard in Sweden, Denmark, France, Greece, and many other places. Eventually those caught carrying more than a pittance in cash might be subject to its forfeiture...or even to imprisonment for committing “CashCrime.”

Cash can be killed or made impractical in other ways, too. In 1999, another version of such a “Carry Tax” on cash was set forth by Marvin Goodfriend, a Senior Vice President of the Federal Reserve Bank of Richmond, Virginia. Such a feasible tax, he wrote, “would serve as a powerful deterrent to hoarding currency.” [48]

Goodfriend understood full well that our money already has a time-bomb tax ticking away inside it and lowering its value. That tax is the inflation deliberately created by the Federal Reserve by printing money in excess of our nation’s productivity. This debases the money you earn and save.

Today the Federal Reserve punishes savers with “financial repression,” the economist term for deliberately holding the rate of interest banks pay depositors below the real rate of inflation. This guarantees that savers in America today lose part of the value of their savings every day they keep their cash in the bank. This benefits banks and government, but not savers. Rates are going up, says the Fed, but real inflation may already be 10%.

Most investors now painfully understand that the Fed has been punishing nearly every traditional safe haven for savers – who are now losing value by having a savings account and keeping their money in inflating dollars.

Most now recognize that Americans are being systematically herded, like sheep, into higher-risk investments full of moral hazard – especially the stock market and wildly volatile cryptocurrencies.

Perhaps everything is going through Alice’s looking glass and being reversed. We used to save, but saving is now by design a path to financial punishment. The new game appears to be to get us away from cash and into the equivalent of casino chips. Credit cards are casino chips that trick us into more spending and debt.

And we, whose ancestors knew the value of saving, are now expected via student loans and other offerings, to spend our lives not accumulating cash but accumulating credit, which we convert into debt. Your Social Security number is now your ear tag in this herd of sheep. Welcome to the new “cashless” feudalism that Nobel Laureate Friedrich Hayek warned was at the end of our road to serfdom.

Hayek wanted us to have the right to use whatever currency, cash or money we wish – to end the dollar monopoly and make these denationalized moneys compete. [49] President Trump could make America great again and rein in government power by restoring Constitutional cash, a dollar backed as it originally was by gold. Restoring the gold standard today, of course, might push gold's value above $5,000 an ounce. [50]

We could also restore our own gold standard by investing in gold, recognized as global money for thousands of years. We need to understand that the Secret War on Cash is actually a war against all of us....against our prosperity, freedom and independence.

Cash “is at the heart of how we choose to organize society,” the economics website acknowledged. [51]

“Cash is a vehicle for freedom….[that] can liberate people,” wrote MoneyAndBanking, freeing them from oppressive governments. It can turn individuals from serfs into sovereigns, able to reassert control over their own lives.

“Cash is unique among payment instruments in that anyone can transact any time, any place, with no third parties. With this freedom comes strong privacy protection….” concluded a study by the Fletcher School at Tufts University. “This freedom creates a parallel economy outside the banking system.” [52] (Our Emphasis)

And the “cashless” banking system has become key to creating all-pervasive, all-controlling global government surveillance and power over each of us.

This is why governments are so eager to impose a “cashless” society before their citizens understand the vast increase in government power, and loss of individual freedom, that come when cash goes away.

Look at the case and evidence in this study, and decide for yourself whether America should “cash out” or “cash in” our future. Recognize that for this brief moment in history, you still have the power to save at least your own family, and perhaps America, if you act decisively.

Outlawing Cash

Experts estimate that the average American inadvertently commits three felonies a day. [53] Odds are that if the government wished, you could be convicted of a crime.

The United States Government since 1970 has required banks to report any cash withdrawal or deposit of $10,000 or more, and now to report if you withdraw or deposit some amount less than $10,000 with the intent of avoiding the transaction being reported. Are bankers psychologists trained to identify your intent? As we noted, this law in a sense makes people criminals for violating an Orwellian “thought crime.”[54]

“Federal regulations require banks to file ‘Suspicious Activity Reports’ or SARs on their customers,” writes Kevin Dowd, a Professor of Finance and Economics at Durham University in the United Kingdom and Adjunct Scholar at the Cato Institute. “Banks have minimum SAR quotas that they need to submit to the government: if they don’t file enough, they can be fined and their executives and directors can be jailed for non-compliance. There is no penalty if bankers claim that a transaction is suspicious when it turns out not to be – and hence no disincentive to file false reports – and banks are not even allowed to inform suspects that they are under investigation.” [55]

In late 2017, Bank of America and Wells Fargo followed JPMorgan Chase in banning cash deposits into other peoples’ accounts, as one customer was shocked to learn when he was unable to deposit $50 in cash into his child’s account. For two years prior to this new rule, Bank of America required a government-issued ID from those making such cash deposits. The banks, according to San Francisco Business Times reporter Mark Calvey, are responding to “security concerns” such as money-laundering. Fear of regulatory pressure and penalties, however, may have prompted these major banks to impose an ever-tighter stranglehold on customer use of cash. [56]

If you think it is getting harder to put cash into the bank, as we explored in our book Don’t Bank On It! The Unsafe World of 21st Century Banking, try taking out cash that you believe is yours – but that government now regards as an asset of the bank’s. Odds are that your bank will resist and delay your request to make any sizeable cash withdrawal from your account. This is partly because banks nowadays often have little cash on hand, and partly because of the government paperwork your withdrawal requires the bank to complete. Even innocent cash transactions at a bank can now land citizens in a world of hurt. [57]

Terry Dehko awoke one January morning to discover that the IRS had seized the entire $35,000 bank account of his small Michigan grocery store. Dehko’s “crime,” he learned, was that he could only get insurance that would cover $10,000 or less of cash losses, so he had employees make frequent cash deposits of less than $10,000 at the local bank across the street to be safe from robbers. As the law requires, that bank flagged his deposits for the IRS with a “Suspicious Activity Report,” on his business.

Dehko and his children had run their little market for 35 years and faithfully reported and paid taxes on their income. Audits showed no tax law violations.

Nevertheless, the IRS saw these multiple deposits of just under $10,000 as “structuring.” It seized his operating capital and filed a typical asset forfeiture case not against him, but against the cash accused of involvement in lawbreaking: United States of America v. $35,651.11 was the official legal case name. [58]

The “Cashless” Future

Sweden had been enthusiastic about becoming the world's first entirely "cashless" society.  By 2018, however, the Swedes became frightened at the power this gives government – not only their own, but Russia's should it launch an invasion by hacking, scrambling, or shutting off Sweden's computer networks as it did Ukraine's, leaving Swedes helpless, without access to either cash or credit. [59]

In India, where 1.3 billion people made 96 percent of their transactions in cash, the government’s surprise announcement on November 8, 2016, hit like a thunderbolt. It meant that those with no proof of where their cash came from were unable to exchange it for the new currency; in effect, their untaxed, undeclared cash would within hours become unconvertible and hence forfeited.

This “demonetization” caught millions who held fortunes in “black money.” They ran to the precious metal stores, reportedly bidding up the price of gold to as much as $2,800 an ounce in paper currency that to them would become worthless at Midnight. It was a shock treatment designed to force India into compliance with the cashless society. [60]

The European Central Bank is eliminating the 500 Euro bill. Australia is aiming to dump its $100 bill. Leftist Venezuela purged its largest-denomination 100-Bolivar bill, inflation-shriveled to a value of less than the cost of printing it. The multinational company Apple wants to kill cash, perhaps because its cell phones would then for millions of customers take the place of cash in making purchases. [61]

American economist Larry Summers has joined other globalist Progressives barking to abandon the $100 bill. Nobel Laureate Joseph Stiglitz wants to bury all U.S. currency, from the $100 to the $1 bill. Economist Kenneth Rogoff wrote a book titled The Curse of Cash. Their aim is to make cash too risky and troublesome to carry for large purchases, and to make government financial control absolute.

United States currency once had $500, $1,000, $5,000 and $10,000 bills, all of which were terminated in 1969. President Richard Nixon, who severed the dollar's last convertibility to gold in 1971, purged the $5,000 bill explicitly because “criminals” found its use convenient.

The U.S. Dollar is the world’s reserve currency. Approximately $580 Billion in American cash – 65 percent of all paper dollars – is used outside the U.S. This includes up to 75 percent of all $100 bills, 55 percent of $50 bills, and 60 percent of $20 bills – mostly in Latin America and the former Soviet Union. Seven countries have adopted our dollar as currency – and 89 others keep their currency “in a tight trading range relative to the dollar,” according to Kimberly Amadeo of The Balance. [62] As America goes cashless, the impact will be felt around the world.

Will Our Future Be “Encryptoed”?

Some have sought privacy and prosperity not in the dollar but in new cryptocurrencies such as Bitcoin. Cryptocurrencies – from the same root word for “secret” as encryption codes and burial crypts – rose from an obscure idea to become a market where these digital entities sold for less than 25 cents apiece, then to a speculative fad and frenzy that saw this two-bit money-substitute soar to an astonishing $19,000 apiece before plunging in value. Financial analysts compared it to the tulip mania of the Netherlands in the early 1600s, where before the hypnotic spell was broken, people were frantically paying the cost of a house for a single tulip bulb.

The impulse driving buyers to Bitcoin is not entirely irrational. Most of us sense that something is fatally wrong with the paper dollar, that its political overvaluation is insane, unreliable, and doomed to collapse. Most of us understand that the cashless society with its political control and government surveillance would take us quickly down a road to serfdom and to the end of our rights as Americans. Our distrust of paper money and “cashlessness” is healthy.

Bitcoin and other cryptocurrencies also appeal to an unhealthy get-rich-quick fantasy that in many people’s minds replaces hard work and prudent risk-taking with high-risk gambling and luck as primary values. Bitcoin may have already had its meteoric rise and fall, speculators say, but other cryptocurrencies might yet offer an almost free ride to enormous wealth.

This kind of thinking is like betting your retirement money on the nearest state lottery, which celebrates a handful of people who guess the winning numbers – but never mentions the millions of losers whose luck fails and rent money is wasted on a pipedream. The Lotteries tell you how rich you would be if you had picked the correct handful or so of numbers in the right order; they do not tell that the odds of doing this are a tiny fraction of your chance of being struck by lightning on a sunny day. To government, Lotteries are its tax on stupid people.

Your “lucky” number for cryptocurrencies today is roughly 1,564, with a purported combined “value” of over $300 Billion. That is the number of “cryptos” from which customers can now choose.

Just as companies have IPOs, Initial Public Offerings of stock, so cryptocurrencies have ICOs, Initial Coin Offerings, of their proto-products to raise working capital, with more coming all the time. Early 2017, for example, saw 902 ICOs, 418 of which quickly failed, suggesting that many were outright scams. [63]

But will even one of these new cryptocurrencies repeat Bitcoin’s magic – leaping from a cost of mere pennies to a peak price around $20,000 apiece? Not likely. By the time a cryptocurrency demonstrates any market success, it is probably no longer a bargain…and in any event will be risky and volatile.

“Bitcoin is the greatest scam in history,” wrote Bill Harris, founding CEO of PayPal, in April 2018. “It’s a colossal pump-and-dump scheme, the likes of which the world has never seen.” He notes that Bitcoins are accepted almost nowhere, and some cryptocurrencies nowhere at all. Their value can swing by 10 percent or more in a single day, making them “useless as a means of payment….and undesirable as a store of value.” Bitcoin, like the dollar, has “no intrinsic value,” wrote Harris. “It only has value if people think other people will buy it for a higher price – the Greater Fool theory.” [64]

Cryptocurrency trading exchanges are, Harris wrote, “far less reliable and trustworthy than ordinary banks and brokers.” Their history is a cautionary tale, from Mt. Gox in Japan, whose 24,000 customers in 2014 were defrauded of $460 Million; to NiceHash, looted by hackers of $75 Million in 2017; to Coincheck, hacked and robbed of at least $534 Million in 2018. [73] Even when working normally, most exchanges are slow, can charge high fees, and are far quicker turning your money into Bitcoins than your Bitcoins into money. [65]

Here are a few points to consider: Bitcoin’s mysterious origin may be the U.S. Government itself. [66] Nearly half of all Bitcoins may be “owned” by only 1,000 people, who can manipulate the market. [67] The Internal Revenue Service is already beginning to tax it, and MIT’s Technology Review reported in April 2018 that tracking cryptocurrency criminals is much easier than people used to think possible. [68] In April 2018, MIT’s Technology Review suggested three ways to destroy Bitcoin. [69]

Will cryptocurrencies survive? Probably, because central banks, governments, and their crony investors are considering ways to issue their own versions resembling Bitcoin. [70] Arizona has begun the legal process to let residents pay taxes in crypto. So has Ohio. [71] These coming cryptocurrencies will be entirely trackable, taxable, and blockable, and might function like a hybrid between a government bond and a credit card. Is Bitcoin opening the way to escape from government-controlled “cashlessness,” or is it a cunning trap luring the sheep to precisely where government wants them to go? As Stevie Wonder’s song “Superstition” warns: “When you believe in things that you don’t understand, then you suffer.”

The Power Brokers of Cashlessness

As of 2019, Americans carry more than a trillion dollars of debt on credit cards, often at double-digit rates of interest.  More than one in five of us now have more high-interest credit-card debt than savings. [72] A CareerBuilder survey found that 78 percent of American workers - nearly 4 out of 5 - are currently living paycheck to paycheck. [73] And as the 2019 Federal Government partial shutdown showed, among those living on the high-debt, high-risk cliff edge of destitution were large numbers of government workers whose income in wages plus benefits is roughly $126,000 per year; many apparently believe that they can be as addicted to high spending and reckless debt as politicians.

The 2018 Federal Reserve Board’s Economic Well-Being Report found that 40 percent of American households do not have enough money to pay for an unexpected $400 expense, and 61 percent lack the cash to cover a $1,000 emergency, such as a hospital emergency room visit or urgent car repair. [74] Other recent research found that 39 percent of Americans are already “cashless,” having nothing in their savings. [75]

America’s politicians are beginning to imitate China’s methods of controlling citizens in a “cashless” society. In early 2018, liberal Democrat and New York State Comptroller Thomas J. DiNapoli, who controls where the state invests its $209.1 Billion pension fund, sent out a letter.  It went to institutions that control our credit cards and borrowing – Visa, MasterCard, JPMorgan Chase, Bank of America, Wells Fargo, American Express, Discover Financial Services, and others.

DiNapoli's message was about as subtle as a guy wearing a pinstripe suit, black shirt, and white tie saying: "You gotta nice place here. Too bad if anything happened to it. But maybe I can provide you some, er, protection if you cooperate."

DiNapoli suggested that these companies should consider whether gun transactions should be classified with restricted high-risk purchases like pornography, illicit drugs, and cryptocurrencies. “If gun violence continues unabated in society,” he wrote, “public outcry...may grow and create significant financial risk for the company.”

DiNapoli suggested that these companies look into implementing ways to block all credit card purchases of firearms, ammunition, and gun accessories. The implied threat was clear: stop extending credit to gun and ammunition buyers, or risk having New York State investment money taken away from your bank or credit company, because the Left wants to ban guns. [76]

The Federal Government has already tried such intimidation, as we explained in our book Don't Bank On It! The Unsafe World of 21st Century Banking. President Barack Obama implemented “Operation Choke Point,” which threatened big regulatory problems for financial institutions that did not withhold banking and credit services from firearms and ammunition-sellers, among others.  Such sellers were to be cut off even if they had never been found guilty of any criminal wrongdoing. [77]

This was the naked weaponization of regulatory power to injure or kill ideological targets. Consumer Research analyst Beau Brunson noted that Operation Choke Point “used reputational risk as a tool for bank coercion.” Now so does DiNapoli. With “cashlessness,” when customers have no other way to buy, such “nuclear warfare” can destroy businesses and products.

In August 2017, President Donald Trump halted Operation Choke Point, but as The Hill observed, “a program terminated unilaterally can be resumed unilaterally.” On the day Progressive Democrats regain power, this is one of ten thousand kinds of authoritarian force they immediately will put back into law.

In a "cashless society," government can not only monitor and tax everything you buy, but also ban specific purchases – ranging from foods it deems unhealthful to guns it deems dangerous. It can destroy the ability of targeted companies and even whole industries to sell to customers.

  All credit will become politicized and ideological by government. Soon the nanny statist Progressives will be able to use “cashlessness” to dictate everything you can buy or donate to…for your own and society’s good, as they define it. Big Brother could never have such power if Americans privately were able to use cash.

Like the power to tax, the Progressive power to regulate is the power to kill. At a certain point, “private” banks are so regulated that they become like utility companies whose “profit” is guaranteed but whose policies are almost entirely dictated by government bureaucrats. For all intents and purposes, the government will “own” the banks – or, as cynics say, the banks will “own” the government, as we discussed in Money, Morality & The Machine. The bottom line is that the government will control all credit and banking, just as Karl Marx and Friedrich Engels proposed in 1848 in The Communist Manifesto.

We have good reason to distrust government paper money, an unreliable store of value that our politicians debase by at least 2 percent each year through deliberate inflation. The dollars you save will have at least 20 percent less purchasing power each decade, and over a 40-year working lifetime will lose roughly 80 percent of their value. This politicized “cash” comes with built-in obsolescence, and its value can be destroyed anytime the government decides to print or digitally create tens of trillions more dollars out of thin air.

Modern Monetary Theory

Once upon a time, when America was a nation of free enterprise, the money was honest and flowed voluntarily to those businesses that offered the best products and services for the price. This made an innovative, independent, and prosperous nation. Elections were contests between two centrist, pro-capitalist political parties that cooperated to make America succeed.

Then, a bit more than 100 years ago, our politics began to be polarized by Progressives; collectivists who are essentially socialist and bent on re-engineering our society and human nature itself. When in office they took money coercively via high taxes and oppressive regulations. Their aim was to “redistribute the wealth” not based on merit, but by giving it to their cronies and voters. This has increasingly made America like the unfair lands our ancestors left in search of freedom and opportunity in America.

These Progressives have turned America into a land with a pro-enterprise party and an anti-capitalist socialist party. This has turned every election into a game of Russian roulette, making investors reluctant to build new companies or hire people because if the socialists win they could confiscate investor property.

The best known of the self-described socialists who have hijacked the Democratic Party is Alexandria Ocasio-Cortez, who says she favors “Modern Monetary Theory” (MMT). Few had heard of it, but we clearly saw where Progressivism was headed and devoted an entire chapter of our book The Great Debasement to MMT. [78]

Modern Monetary Theory assumes that all currency is always the property of the government, which may permit you to use it with the understanding that government can always reclaim its money via taxation, inflation, or outright seizure. The government, which can never go bankrupt, can print as much money or create as much credit out of thin air as it needs or wants, thereby creating prosperity and solving all financial problems.

New Congresswoman Ocasio-Cortez thus believes that government can pay for never-ending government programs to provide healthcare, college education, and other benefits for all – because government can print all the money needed to pay for hundreds of trillions of dollars in such social programs. Deficits, according to MMT, are not a curse but a blessing.

Our nation has not one coin of the realm but two. One is the coin of money, and Ocasio-Cortez calls those who earn much of it wealthy. But to the productive, money is capital, green energy that can be invested to create things. This socialist congresswoman nevertheless wants to use force to confiscate and redistribute what these producers have earned. This is easily done since the government enacted Progressive taxation and regulation which can be targeted on individuals.

The second coin of the realm is power, the coin in which Ms. Ocasio-Cortez is wealthy. Power is not taxed, but it can command everything and more than money can. As the Soviets showed, Communist leaders live “cashlessly,” but they live in seacoast villas, are driven by chauffeurs, and have every material wish fulfilled. In her first stint as House Speaker, Nancy Pelosi kept standby pilots and an Air Force corporate jet at her beck and call, stuffed with the most expensive caviar, wines, and other costly delicacies at taxpayer expense.

In Ms. Ocasio-Cortez’s socialism, all are equal but, as George Orwell said, some are more equal than others. Note that she advocates redistributing other people’s wealth…but she never proposes redistributing government power back to the people that government was supposed to serve. Instead, she wants all power and wealth transferred to the government, led by people like her. We know where this path leads: to an impoverished, dictatorial society with an all-powerful ruling class whose citizen-serfs are moneyless and in ever-deepening debt.

You have a far better alternative – real cash, as the Framers of America’s Constitution specified: cash that was precious metal, silver and gold. Only Mother Nature produces this kind of “cash,” and in very small quantities, so politicians cannot debase it. Our Framers wanted a future in which government remained small, and individual Americans would forever be independent and free to grow as big as they are able.

You can win the War Against Cash by converting a portion of your debased government money into the real secure store of value and independence our Framers specified. They wanted us to have constitutional cash with a proven 5,000-year track record of security, liquidity, and privacy that requires no government or computer to give it value. You will not only defeat the Progressive scheme to impose serfdom, but also turn honest money into a new American Revolution for your family’s and nation’s independence and liberty.


[1] Sidney Fussell, “Who Wins When Cash Is No Longer King? It Won’t Be the Poor,” The Atlantic, December 21, 2018.

[2] Sarah Jeong, “How a Cashless Society Could Embolden Big Brother,” The Atlantic, April 8, 2016.

[3] Donna Lu, “Scan Here to Pay,” New Scientist, January 12, 2019.

[4] Ben Tracy, “China Assigns Every Citizen A ‘Social Credit Score’ to Identify Who Is and Isn’t Trustworthy,” CBS New York, April 24, 2018.

[5] Paul Mozur, “Inside China’s Dystopian Dreams: A.I., Shame and Lots of Cameras,” New York Times, July 8, 2018.

[6] Amelia Heathman, “This Chinese App Tells You If You’re Within 500 Metres of Someone in Debt: The App Is Part of China’s Vision for a Social Credit System by 2020,” U.K. Evening Standard, January 23, 2019; Tyler Durden, “China Starts ‘Debt Shaming’: New App Warns Users If They Are Walking Near Someone in Debt,” ZeroHedge, January 22, 2019.

[7] David Samuels, “Is Big Tech Merging with Big Brother? Kinda Looks Like It,” Wired Magazine, January 23, 2019; Yuval Noah Harari, “Why Technology Favors Tyranny,” The Atlantic, October 2018 issue.

[8] Tom Simonite, “The ‘Mortal Danger’ of China’s Push Into AI,” Wired Magazine, January 24, 2019; “Soros Calls China’s Xi ‘Most Dangerous’ Foe of Free Societies,” France24, January 24, 2019; “Soros Warns China Uses Algos to Find Threats to One-Party Rule,”, January 25, 2019.

[9] Ibid.

[10] James Roberts, “Opinion: As Maduro’s Grip On Venezuela Slips, China’s ZTE Helps Him Cling to Power,” ZeroHedge, January 27, 2019.

[11] Tanner Greer, “One Belt, One Road, One Big Mistake,” Foreign Policy, December 6, 2018; “China Rules: How China Became a Superpower,” New York Times, November 18, 2018; James Griffiths, “Are the Wheels Coming Off China’s Belt and Road Megaproject?” CNN, December 31, 2018; Maria Abi-Habib, “China’s ‘Belt and Road’ Plan in Pakistan Takes a Military Turn,” New York Times, December 19, 2018; Tyler Durden, “How China Colonized An Entire Continent Without Firing a Single Shot,” ZeroHedge, January 5, 2019; Ben Mauk, “Can China Turn the Middle of Nowhere Into the Center of the World Economy?” New York Times Magazine, January 30, 2019.

[12] Conor Friedersdorf, “The Hubris of Trying to Eliminate Cash,” The Atlantic, June 6, 2014.

[13] Jonathan Levin, “New York Fed President Sent Puerto Rico a Jet Filled With Cash,” Bloomberg, October 9, 2017. URL:

[14] Ryan McMaken, “In A Cashless World, You’d Better Pray The Power Never Goes Out,” ZeroHedge, October 11, 2017. URL:

[15] Jayant Bhandari, “Scenes of Panic In India As Gold Price Skyrockets After Currency Ban,” ZeroHedge, November 16, 2016. Page 11. URL:; Jayant Bhandari, “Gold Price Skyrockets in India after Currency Ban,”, November 9, 2016. Page 2. URL:

[16] Tyler Durden, “India Uses Helicopters, Air Force Planes To Deliver Freshly Printed Cash,” ZeroHedge, November 21, 2016. URL:

[17] Norbert Haering, “A Well-Kept Open Secret: Washington Is Behind India's Brutal Experiment of Abolishing Most Cash,” ZeroHedge, January 12, 2017. URL:

[18] Craig R. Smith and Lowell Ponte, The Great Debasement: The 100-Year Dying of the Dollar and How to Get America’s Money Back. Phoenix: Idea Factory Press, 2012. Page 222.

[19] Craig R. Smith & Lowell Ponte, “How Hastert’s Secret Sex Scandal Touches You: Your Bank Spies On You, Too, For the Government,” Western Journalism, June 1, 2015. URL:

[20] Christopher Ingraham, “How Police Took $53,000 From A Christian Band, an Orphanage and a Church,” Washington Post, April 25, 2016. URL:

[21] Shaila Dewan, “Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required,” New York Times, October 25, 2014.

[22] Nick Sibilla, “Cops Use Traffic Stops To Seize Millions From Drivers Never Charged With A Crime,” Forbes, March 12, 2014; Sarah Stillman, “Taken,” New Yorker, August 12, 2013.

[23] ”Small Business Owners Forced to Battle IRS Over Seized Bank Accounts,” Fox News, February 11, 2015.

[24] Melissa Quinn, “The IRS Seized $107,000 From This North Carolina Man’s Bank,” Daily Signal (Heritage Foundation), May 11, 2015.

[25] Doug McKelway, “Has Asset Forfeiture Gone Too Far? Truck Seizure Case Sparks Outrage, A Call for Change,” Fox News, September 20, 2017.

[26] Damon Root, “Clarence Thomas Attacks Civil Asset Forfeiture, Lower Court Follows His Lead,” Reason Magazine, June 21, 2017; Edgar Walters and Jolie McCullough, “Texas Police Made More Than $50 Million in 2017 from Seizing People’s Property. Bit Everyone Was Guilty of a Crime,” Texas Tribune, December 7, 2018.

[27] Barnini Chakraborty, “Despite Promises to Cut Back, Fed and State Governments Press Asset Forfeitures,” Fox News, January 30, 2018.

[28] Sheldon Gilbert, “Asset Forfeiture: Rap Albums and Hard-Earned Cash Are the Government’s ‘Little Goodies’,” USA Today, March 13, 2018.

[29] Jason Snead, “4 Startling Forfeiture Abuse Stories,” The Daily Signal/Heritage Foundation, September 29, 2015.

[30] German Lopez, “’It’s Been Complete Hell’: How Police Used a Traffic Stop to Take $91,800 From An Innocent Man,” Vox, March 20, 2018.

[31] Ibid.

[32] Craig R. Smith and Lowell Ponte, The Great Debasement: The 100-Year Dying of the Dollar and How to Get America’s Money Back. Phoenix: Idea Factory Press, 2012. Page 219.

[33] Glen Meek, “I-Team: I-80 Cash Seizures By Sheriff’s Office Raises Questions,” 8 News, June 24, 2015; John Kerr, “When the Highway Robber Wears a Badge: Civil Forfeiture Allows Law Enforcement to Steal from Innocent Americans,” Washington Times, August 15, 2014.

[34] C.J. Ciaramella, “Justice Department Rolls Out New Policy to Seize More Money Under Asset Forfeiture,” Reason Magazine, July 19, 2017; Deborah Connor, “Policy Directive 17-1,” Washington, D.C.: U.S. Department of Justice. URL:

[35] Barnini Chakraborty, “Despite Promises to Cut Back, Fed and State Governments Press Asset Forfeitures,” Fox News, January 30, 2018.

[36] Nick Sibilla, “Congress Killed Efforts to Undo Sessions’s Civil Forfeiture Expansion, Despite Unanimous House Votes,” Forbes, April 2, 2018.

[37] Sheldon Gilbert, “Asset Forfeiture: Rap Albums and Hard-Earned Cash Are the Government’s ‘Little Goodies’,” USA Today, March 13, 2018.

[38] Barnini Chakraborty, “Despite Promises to Cut Back, Fed and State Governments Press Asset Forfeitures,” Fox News, January 30, 2018.

[39] Craig R. Smith and Lowell Ponte, Don’t Bank On It! The Unsafe World of 21st Century Banking. Phoenix: Idea Factory Press, 2014. Pages 83-95.

[40] Peter Coy, “The Death of Cash,” Bloomberg Business, April 23, 2015. URL:

[41] “Has Paper Money Outlived Its Purpose?”, August 4, 2014. URL:

[42] The $1.47 Trillion estimate of U.S. currency in circulation is as of February 22, 2017. Board of Governors of the Federal Reserve System, ”How Much U.S. Currency is in Circulation?” Current FAQs. URL:

[43] “Why Central Banks HATE Cash and Will Begin to Tax It Shortly,” Zerohedge, May 18, 2015. URL:

[44] David Crouch, “’Being Cash-Free Puts Us at Risk of Attack’: Swedes Turn Against Cashlessness,” U.K. Guardian, April 3, 2018; Maddy Savage, “The Swedes Rebelling Against a Cashless Society,” BBC News, April 6, 2018.

[45] “Why Central Banks HATE Cash and Will Begin to Tax It Shortly,” Zerohedge, May 18, 2015. URL:

[46] Craig R. Smith and Lowell Ponte, The Great Debasement: The 100-Year Dying of the Dollar and How to Get America’s Money Back. Phoenix: Idea Factory Press, 2012. Page 219.

[47] Josh Barro, “When It’s a Crime to Withdraw Money From Your Bank,” New York Times, June 5, 2015. URL:; Conor Friedersdorf, “Why Is It a Crime to Evade Government Scrutiny?” The Atlantic, June 2, 2015. URL:

[48] Marvin Goodfriend, “Overcoming the Zero Bound on Interest Rate Policy.” Richmond, Virginia: The Federal Reserve Bank of Richmond, August 2000. Pages 12-15. URL:; see also Declan McCullagh, “Cash and the ‘Carry Tax’,” Wired Magazine, October 27, 1999. URL:

[49] Craig R. Smith and Lowell Ponte, The Inflation Deception: Six Ways Government Tricks Us…And Seven Ways to Stop It! Phoenix: Idea Factory Press, 2011. Pages 216-218.

[50] Craig R. Smith and Lowell Ponte, “Bracing for a Trump vs. Fed Money Crisis: It's Time to Grab Your Wallet,” Pontificationblog, March 13, 2017. URL:; Ralph Benko, “President Trump: Replace The Dollar With Gold As The Global Currency to Make America Great Again,” Forbes, February 25, 2017. URL:; John D. Mueller, “Trump's Real Trade Problem Is Money,” Wall Street Journal, January 25, 2017. URL: or; Nathan Lewis, “Limited Convertibility: Something New For A 21st Century Gold Standard,” Forbes, March 8, 2017. URL:

[51] “Has Paper Money Outlived Its Purpose?”, August 4, 2014. URL:

[52] “Cost of Cash,” Fletcher School, Tufts University. URL:

[53] Harvey A. Silverglate and Alan M. Dershowitz, Three Felonies a Day: How the Feds Target the Innocent. New York: Encounter Books, 2011.

[54] Josh Barro, “When It’s a Crime to Withdraw Money From Your Bank,” New York Times, June 5, 2015. URL:; Conor Friedersdorf, “Why Is It a Crime to Evade Government Scrutiny?” The Atlantic, June 2, 2015. URL:

[55] Kevin Dowd, “Killing the Cash Cow” (Briefing Paper), Adam Smith Institute (London). URL:; Kevin Dowd, “The War on Cash Is Even Worse Than It Seems,” Mises Institute, July 13, 2018.

[56] Mark Calvey, “Big Banks Ban Cash Deposits Into Others’ Accounts,” Bizwomen, November 28, 2017. URL:; Lee Boyce, “Why Won’t Nationwide Building Society Let Us Put Cash Into Our Grandchildren’s Savings Accounts?” ThisIsMoney, April 30, 2018.

[57] Craig R. Smith and Lowell Ponte, Don’t Bank On It! The Unsafe World of 21st Century Banking. Phoenix: Idea Factory Press, 2014.

[58] Terry Dehko, “Bullied by the IRS,” Washington Times, September 26, 2013; Radley Balko, “The Federal ‘Structuring’ Laws Are Smurfin’ Ridiculous,” Washington Post, March 24, 2014.

[59] David Crouch, “’Being Cash-Free Puts Us at Risk of Attack’: Swedes Turn Against Cashlessness,” U.K. Guardian, April 3, 2018; Maddy Savage, “The Swedes Rebelling Against a Cashless Society,” BBC News, April 6, 2018.

[60] Jayant Bhandari, “Scenes of Panic In India As Gold Price Skyrockets After Currency Ban,” ZeroHedge, November 16, 2016. Page 11. URL:; Jayant Bhandari, “Gold Price Skyrockets in India after Currency Ban,”, November 9, 2016. Page 2. URL:; Tyler Durden, “India Uses Helicopters, Air Force Planes To Deliver Freshly Printed Cash,” ZeroHedge, November 21, 2016. URL:; Norbert Haering, “A Well-Kept Open Secret: Washington Is Behind India's Brutal Experiment of Abolishing Most Cash,” ZeroHedge, January 12, 2017. URL:

[61] Don Feisinger, “Apple's Next Goal Is Killing Paper Money Once and For All,” Fortune, October 17, 2016. URL:

[62] Kimberly Amadeo, “Why the Dollar Is the Global Currency,”, February 19, 2018.

[63] Bill Harris, “Bitcoin Is The Greatest Scam in History,” Recode, April 24, 2018.

[64] Ibid.

[65] Samuel Gibbs, “Head of Mt Gox Bitcoin Exchange on Trial for Embezzlement and Loss of Millions,” The Guardian, July 11, 2017; Robert McMillan, “The Inside Story of Mt. Gox, Bitcoin’s $460 Million Disaster,” Wired, March 3, 2014; Steven Perlberg, “The Statements from People Who Lost Their Money on Mt. Gox Are Seriously Sad,” Business Insider, March 4, 2014; Alexandra Harnewy and Steve Stecklow, “Mountain of Trouble: Twice Burned – How Mt. Gox’s Bitcoin Customers Could Lose Again,” Reuters, November 16, 2017; Rishi Iyengar, “More Than $70 Million Stolen in Bitcoin Hack,” CNN Tech, December 8, 2017; Reuters, “Japan Seeks to Clean Up Cryptocurrency Markets After $530 Million Coincheck Heist,” Fortune, January 29, 2018.

[66] Kate Beioley and James Pickford, “Bitcoin Investors Struggle to Cash Out New Fortunes,” Financial Times, January 12, 2018; Rich Newman, “Here’s a Big Bitcoin Problem I Just Discovered,” Yahoo Finance, December 7, 2017; Kate Beioley, “Investors Face Barriers Trying to Turn Bitcoin Profits Into Pounds,” Financial Times, January 16, 2018.

[67] Sophie Bearman, “Bitcoin’s Creator May Be Worth $6 Billion – But People Still Don’t know Who It Is,” CNBC, October 27, 2017; Taryn Tarrant-Cornish, “Bitcoin ‘Created As Dollar 2.0 by US Government to Fund Secret CIA and MI5 Missions’,” U.K. Sunday Express, January 20, 2018.

[68] Olga Kharif, “The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market,” Bloomberg, December 8, 2017.

[69] Jen Wieczner, “Bitcoin Investors Aren’t Paying Their Cryptocurrency Taxes,” Fortune, February 13, 2018; Douglas Heaven, “Sitting With the Cyber-Sleuths Who Track Cryptocurrency Criminals, MIT Technology Review, April 19, 2018; Molly Jane Zuckerman, “MIT Comes Up With Three Ways to Destroy Bitcoin,” CoinTelegraph, April 24, 2018.

[70] Mike Orcutt, “Governments Are Testing Their Own Cryptocurrencies,” MIT Technology Review, September 25, 2017.

[71] Marie Huillet, “Bill Allowing Residents to Pay Taxes in Crypto Passes Arizona House Committee,” CoinTelegraph, April 23, 2018; Yogita Khatri, “Ohio Becomes First U.S. State to Allow Taxes to be Paid in Bitcoin,” Coindesk, November 26, 2018.

[72] Maria LaMagna, “1 in 5 Americans Have More Credit-Card Debt Than Savings,” MarketWatch, February 22, 2018.

[73] Michael Snyder, “78% of Americans Live Paycheck to Paycheck (Including Many Government Workers Affected By The Shutdown),” ZeroHedge, January 10, 2019; Danielle Paquette, “’I See No Way Out’: Living Paycheck to Paycheck Is Disturbingly Common,” Washington Post, December 28, 2018.

[74] Nicole Lyn Pesce, “Why 4 in 10 Adults Can’t Cover a $400 Emergency Expense,” MarketWatch, May 22, 2018.

[75] Ibid.

[76] Lowell Ponte, “How a 'Cashless' America Could Become 'Gunless’,” American Thinker, April 12, 2018. URL:; Maria LaMagna, “Could Credit-Card Companies Ban Gun Sales?” MarketWatch, March 3, 2018; Andrew Ross Sorkin, “How Banks Could Control Gun Sales If Washington Won’t,” New York Times, February 19, 2018; Glenn Blain, “State Urges Banks, Insurers to Stop Doing Business with Gun Industry,” New York Daily News, April 18, 2018. See also Mark Hendrickson, “Farewell to Cash,” Forbes, May 28, 2015; Kevin Dowd, “Killing the Cash Cow” (Briefing Paper), Adam Smith Institute (London). URL:; Kevin Dowd, “The War on Cash Is Even Worse Than It Seems,” Mises Institute, July 13, 2018; James Setterlund, “Get Ready for a Financial Assault on the Second Amendment,” National Review, January 10, 2019.

[77] Craig R. Smith and Lowell Ponte, Don’t Bank On It! The Unsafe World of 21st Century Banking. Phoenix: Idea Factory Press, 2014. Pages 156-159.

[78] Craig R. Smith and Lowell Ponte, The Great Debasement: The 100-Year Dying of the Dollar and How to Get America’s Money Back. Phoenix: Idea Factory Press, 2012. Pages 101-129, “The Age of ‘Modern Money’.” See also Mark Jeftovic, “The Disturbing Rise of Modern Monetary Theory (MMT),” ZeroHedge, January 21, 2019; Karl Smith, “The Uses and Abuses of Modern Monetary Theory,” National Review, January 11, 2019; Bob Murphy, “Bob Murphy Exposes the Upside-Down World of MMT,” ZeroHedge, January 25, 2019; Josh Barro, “Modern Monetary Theory Doesn’t Make Single-Payer Health Care Any Easier,” Intelligencer, January 9, 2019; Michael Strain, “’Modern Monetary Theory’ Is A Joke That’s Not Funny,” Bloomberg, January 19, 2019; Eliza Reiman, “Alexandria Ocasio-Cortez Says the Theory that Deficit Spending Is Good for the Economy Should ‘Absolutely’ Be Part of the Conversation,” Business Insider, January 7, 2019; Ben Hunt, “Modern Monetary Theory (Or, How I Learned to Stop Worrying & Love The National Debt),” ZeroHedge, January 18, 2019.

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