If commentary published tonight in the London Telegraph is any indication,
gold bugs may not be quite as paranoid as their stereotype.
The commentary, written by Jim Leaviss of M&G Investments in London,
argues that governments could stop the boom and bust of the business cycle if
only cash was eliminated and replaced by electronic money. Leaviss says a
step toward such a change is already under consideration in Denmark.
Leaviss writes: "Once all money exists only in bank accounts --
monitored or even directly controlled by the government -- the authorities
will be able to encourage us to spend more when the economy slows or spend
less when it is overheating. ... In this futuristic world, all payments are
made by contactless card, mobile phone apps, or other electronic means, while
notes and coins are abolished. Your current account will no longer be held
with a bank, but with the government or the central bank. ..."
When government wanted people to save, Leaviss writes, it could impose a
tax on bank account transactions, and when government wanted people to spend,
it could impose negative interest rates, as some governments already have
done.
"At the moment it's easy for individuals to avoid seeing their money
eroded this way," Leaviss notes. "They can simply hold banknotes,
stored either in a safe or under the proverbial mattress." (He could
have added gold.) "But if notes and coins were abolished and the only
way to hold money was through a government-controlled bank, there would be no
escape."
Yes, no escape at all. Everyone's financial transactions would be recorded
and monitored, everyone's finances would be vulnerable to government cutoff
at any time, and liberty and privacy would be abolished.
That government must never have such power has been the principle
underlying the political development of the English-speaking peoples for
hundreds of years, from Runnymede by the Thames to Independence Hall in
Philadelphia. Yet now nostalgia for the Soviet Politburo and the Nazi Gestapo
is being celebrated in what is supposedly the United Kingdom's leading
Conservative newspaper. God save the queen -- and the rest of us too.
Leaviss' commentary is headlined "How to End Boom and Bust: Make Cash
Illegal" and it's posted at the Telegraph's Internet site here:
http://www.telegraph.co.uk/finance/personalfi...1602399/Ban-...
