Letter: Economy will pay for vanishing cash

Economy will pay for vanishing cash

To the editor:

Last month we came to the conclusion that there aren't very many physical dollars circulating in the United States. With the only legal tender of the USA in cold storage in foreign countries and under mattresses and in safe deposit banks here in the states, we went on to understand that what people are spending is nothing more than credit, which, as we said, is another word for debt. Finally, we stated that the inevitable end of the great artificial credit cycle is upon us.

Now, only one month later, we can proclaim with certainty that the debt crisis has begun. High yield bonds, affectionately known as "junk bonds," are plunging in value. They include $500 billion in oil-related debt that U.S. fracking companies borrowed when crude oil was trading near $100 per barrel. Many are on their way to certain default.

Then there is the record number of subprime auto loans borrowed by dreamers who will lose their cars when they can no longer pay back these copy cat loans of the 2008 subprime housing fiasco.

But let us not forget the student loan crisis which has recently hit the $1.2 trillion dollar mark. Students have gone into desperate debt in order to get a so-called college education only to find no jobs waiting for them upon graduation. Those loans are heading for the waste basket.

Perhaps worst of all are emerging market bonds. These countries borrowed heavily in American dollars. Now that the U.S. dollar is temporarily up, they have little to no chance of paying off their ill conceived loans. And could U.S. retailers be waiting in the wings?

Cash — that's physical dollars — is disappearing. It is going into hiding because there are people in this world who understand that the central planners want a cashless society where every transaction can be traced and taxed. Already 93 percent of all financial transactions are digital. By achieving a cashless system, the government can also prevent a run on the banks should that crucial but shaky confidence in our funny money evaporate.

Banks only hold about 3 percent of your deposits in cash. The rest is "invested" in all kinds of potentially risky assets. Let's say you have a large $100,000 bank account and decide to withdraw $10,000 or more in cash. Good luck is all I can say. You are nothing more than an unsecured creditor of the bank. You will quickly come to see the difference between cash in a bank account and cash in your pocket.

And while the government/banking cartel's propaganda tells you to be happy, don't worry, the debt collapse will cause the greatest legal transfer of money in history.

Charles Steinhacker, Great Barrington


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