The cancerous virus of freedom-destroying worldwide cash-bans - in the name of fighting terrorism - has reached Taiwan this week. With the aim of 'preventing money-laundering', Taiwan may ban cash purchases of properties and luxury goods, Taipei-based Economic Daily News reports, citing unidentified official at Ministry of Justice.
As we previously noted, the War on Cash is not merely continuing, it is intensifying.
It began in the West, with relatively minor infringements on our right to use the currency of our own nation. The War has now shifted to India, been radically ratcheted up, and inflicted upon a population of 1.2 billion people, where 68% of transactions were conducted with cash. And now, as The Economic Daily News reports (via Google Translate), to Taiwan...
With the goal of strengthening the prevention and control of money laundering, Taiwan's Ministry of Justice plans to promote large-scale transactions without cash. The first wave may lock real estate, luxury cars and jewelry transactions.
According to the provisions of the money-laundering control law, which currently controls the use cash payment tools, The Ministry of Justice to discuss the plan with other regulators in the second half of the year.
Once finalized, the sale of real estate, cars, and jewelry will not be possible using cash; only non-cash payment tools, such as credit cards, financial cards, checks, electronic payments or remittances.
Current regulations require the keeping of records and reporting of any transcations over 500,000 Yuan (around $72,000), with no limit on the amount of cash that can be used.
As to whether a lower threshold will be set, it is unclear; but from indications, for the sale of real estate, luxury cars or jewelry the threshold will be zero - and only non-cash allowed.
Officials said that in addition to changes in the concept of the majority of normal business people should not be affected, but for some with bad credit, who can not apply for a credit card or bank account, it admitted the new law may cause inconvenience.
Of course, the excuse for all this cah ban is simple -
The Ministry of Justice internal data show that the criminal group's asset allocation is especially heavy in gold, diamonds, and real estate. Real estate transactions are considered to high-risk money laundering transactions.
As we noted previously, on the face of it, this 'war on cash' smacks of conspiracy theory, yet certainly, all governments would benefit from this control and would be likely to get on board. In fact, it might prove to be the only way out of their present economic problems.
So, how would it play out? Here’s roughly how I saw Phase I:
- Link the free movement of cash to terrorism (Create a consciousness that any movement of large sums suggests criminal activity.);
- Establish upper limits on the amount of money that can be moved without reporting to some government investigatory agency;
- Periodically lower those limits;
- Accustom people to making all purchases, however small or large, through a bank card;
- Create a consciousness that the mere possession of cash is suspect, since it’s no longer “necessary”.
When I first wrote on the subject, there was considerable criticism as to the possibility that such a programme would ever be attempted, let alone succeed. And, granted, it was so Orwellian that it was understandably seen as a crackpot idea. But since that time, the programme has been developing extremely rapidly. In the last six months alone, it has become so visible that it has even garnered a name - “the War on Cash”.
References in the media have been made that terrorist groups fund their attacks with cash. Dozens of countries have placed limits on the maximum amount of money that can be moved without reporting. Some, notably France, have already begun lowering their limits. Banks in some countries, notably Sweden, are already treating all cash transactions as suspicious. The previously theoretical Phase I is now well under way.
It would appear Taiwan is joining the rest of the world in this war on cash. There are three major players involved in the war on cash:
1. The Initiators
Who? Governments, central banks.
Why? The elimination of cash will make it easier to track all types of transactions – including those made by criminals.
2. The Enemy
Who? Criminals, terrorists
Why? Large denominations of bank notes make illegal transactions easier to perform, and increase anonymity.
3. The Crossfire
Who? Citizens
Why? The coercive elimination of physical cash will have potential repercussions on the economy and social liberties.
The shots fired by governments to fight its war on cash may have several unintended casualties:
1. Privacy
- Cashless transactions would always include some intermediary or third-party.
- Increased government access to personal transactions and records.
- Certain types of transactions (gambling, etc.) could be barred or frozen by governments.
- Decentralized cryptocurrency could be an alternative for such transactions
2. Savings
- Savers could no longer have the individual freedom to store wealth “outside” of the system.
- Eliminating cash makes negative interest rates (NIRP) a feasible option for policymakers.
- A cashless society also means all savers would be “on the hook” for bank bail-in scenarios.
- Savers would have limited abilities to react to extreme monetary events like deflation or inflation.
3. Human Rights
- Rapid demonetization has violated people’s rights to life and food.
- In India, removing the 500 and 1,000 rupee notes has caused multiple human tragedies, including patients being denied treatment and people not being able to afford food.
- Demonetization also hurts people and small businesses that make their livelihoods in the informal sectors of the economy.
4. Cybersecurity
- With all wealth stored digitally, the potential risk and impact of cybercrime increases.
- Hacking or identity theft could destroy people’s entire life savings.
- The cost of online data breaches is already expected to reach $2.1 trillion by 2019, according to Juniper Research.
This issue has expanded more quickly than we’d anticipated. Clearly, the governments that are forcing it into being are running out of time. There can only be one reason why they’d rush a programme that normally would be given more time for people to accept, and that’s that they see a crash coming before they can get Phase II of the programme underway.