Could a “Greek-Style” Carry Tax on Cash Come to the US?
As we keep warning, India is not the “last stop” in the global financial elites’ war on cash.
Indeed, as ZeroHedge noted earlier today, officials are proposing a tax on cash withdrawals in Greece. They’re also proposing only permitting digital cash or cards for various transactions.
The claim behind this policy is that it would stop cash being used in the black market. This is similar to other claims that implementing a carry tax on physical cash or banning it altogether would stop money laundering or other illicit activities.
The REAL reason that ANYONE is even considering a cash ban or carry tax is because cash withdrawals represent a massive risk for insolvent financial institutions such as those in Greece.
When you deposit your capital in a bank, it is recorded as a liability on the bank’s balance sheet. Yes, your money is a liability for the bank.
Because at any point you could request your money back.
Technically, the bank should maintain certain liquidity and capital requirements to insure this would never be a problem. But if the bank has been making loans to anyone with a pulse for years as European banks did during the housing bubble, and if those same loans are technically now worthless, and if the authorities have been doing everything in their power to hide this fact, including implementing bail-ins, confiscating wealth, and even engaging in wealth taxes…
…then your decision to take your cash out of the bank might be the proverbial “straw that breaks the camel’s back.”
Enter the calls for a cash ban or carry tax on physical cash.
You see, if cash remains in electronic form, a banking system can simply shuffle it around without “losing capital.” Yes, the money technically leaves one bank and goes to another, but given that it does so in electronic form, the banks can BS their way through this via their Central Bank.
However, if someone takes their money out of a Greek bank in actual physical cash, first off the bank has to come up with the actual money and secondly that capital leaves the Greek banking system.
If the bank is already close to insolvent, this presents a huge problem.
Greece is the first country to push for a carry tax on physical cash. It won’t be the last. This policy has been floating around in Central Banking circles for years. The fact that it’s now being openly promoted only proves how desperate the elites are getting about the state of the financial system.
Watch, the moment things turn south in the US in a big way, similar proposals will start cropping up here too.
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Chief Market Strategist
Phoenix Capital Research