You can follow me on Twitter. I'm usually sharing links and opinions daily (@BullionBaron). You can also CLICK HERE to signup for free email updates.
I had a chuckle at a post on Zero Hedge this morning which listed some of the reasons you might be considered a conspiracy theorist:
You Know You Are A Conspiracy Theorist If...
One of those things you read and laugh because there is truth to it (Government or regular people probably think you are a conspiracy nut for such thoughts or actions) at the same time that it is absurd that such thoughts or actions should be considered conspiratorial.
Then later in the day I was linked to an article where a former Reserve Bank Official is suggesting the removal of $50 & $100 notes from circulation in order to curb pensioners, criminals and tax evaders from hoarding the notes (article is trimmed, click here to read in entirety):
ELDERLY Australians committing welfare fraud on a massive scale are behind the extraordinarily high number of $100 notes in circulation, a former senior Reserve Bank official says.
Yesterday the Herald revealed there are now 10 $100 notes in circulation for each Australian, far more than the more commonly seen $20 notes.
One popular explanation is that they are used for illegal transactions as part of the cash economy, something the former Reserve official, Peter Mair, rejects as a "furphy".
In a letter to the Reserve Bank governor, Glenn Stevens, dated July 4, Mr Mair laid the blame squarely on elderly people wanting to get the pension and hiding their income in cash to ensure they qualified for the means-tested benefit.
"The bank is basically facilitating a tax avoidance scheme by issuing high denomination notes," he told the Herald. "They are not needed for day-to-day transaction purposes, or even as reasonable stores of value."
Mr Mair said the return for an Australian close to getting the pension who held $10,000 in cash, rather than declaring it, was "enormous".
"If putting it under the bed or in a cupboard means you qualify for the pensioner card, you get discounted council rates, discounted car registration, discounted phone rental - in percentage terms the return is enormous," he said.
His letter to the governor proposes phasing out the $100 and $50 denominations.
"Cards and the internet have delivered a body blow to high-denomination bank notes. They are redundant," he said. "There is no longer any point in issuing them except to facilitate tax dodging.
The authorities would announce that from, say, June 2015 every $100 and $50 note could be redeemed but no new notes would be issued. After June 2017 every note could only be redeemed at an annual discount of 10 per cent. It would mean that after two years, each $100 note could only be redeemed for $80, and so on."
The letter acknowledges the proposal would be contentious and says it should not be done "in any way precipitously", but as payments become more electronic it will become inevitable.
"What would remain in circulation are coins and a modestly expanded issue of currency notes in the $10 and $20 denominations. There is every reason to expect that a national currency issue of this character would soon be adequate." SMH
The Australian $100 note was introduced in 1984. If we use the RBA Inflation Calculator (Link) we can measure that $100 in 1984 would buy a basket of goods valued at $270 in 2011 Dollars. By the time we were to phase out the $100 bill in 2017 it would purchase less than a third of the equivalent 1984 basket of goods (with an inflation rate of 3% between now and then).
Granted we use a lot more electronic transactions today than in 1984 (EFTPOS didn't become widely adopted until the early to mid 90s), however it shouldn't be assumed that those preferring to go about their business with cash are doing so unlawfully. Some just prefer the privacy or convenience that comes with using cash.
Another recent concern is the push for surveillance of citizens via having their internet & telecommunication services monitored:
AUSTRALIA'S security and law enforcement agencies are world leaders in telecommunications interception and data access and like most successful industries, they want more. Federal Attorney-General Nicola Roxon is canvassing a further expansion of surveillance powers, most controversially a requirement that telecommunications and internet service providers retain at least two years of data for access by government agencies. The Age
Based on the way Australia is heading with new legislation requesting ISPs keep 2 years internet history logs and the suggestion that we remove $50 & $100 bills from circulation I thought it would be worth coming up with a localised checklist... hence:
You know you are a pension cheat, criminal or tax evader if...
- You put some cash aside every week and keep it in your house to give out to the grand kids at Christmas time (my Nana did this).
- You are old enough to remember past bank collapses, understand not to take the system for granted and keep your savings in cash to protect yourself in the high risk environment that we face today.
- You prefer $100 notes over $50s as you can hold more $ in your wallet with fewer notes.
- You like keeping any note larger than $20 in your wallet because keeping the number of $20's required to get through your week in your wallet would put your back out every time you sat down.
- You prefer to draw out cash on an irregular basis to use for daily transactions in order to avoid bank transaction fees.
- You find it easier/more convenient to manage a budget when you can quickly check your remaining balance by opening your wallet or purse, rather than having to make a phone call or access the internet.
- You prefer to use cash in order to maintain a reasonable level of privacy when it comes to your personal spending.
- You hold onto some cash in the event of another global financial crisis where some types of accounts may be frozen in order to prevent a bank run.
- You hold some cash outside of the banking system given the increasing frequency of bank network outages which take down ATM and EFTPOS services.
- You use "non-conventional" methods of preserving your purchasing power (such as using cash to purchase and store bullion).
- You prefer to keep what little money you have in cash to avoid an increasing number of electronic fraud transactions which banks can take significant lengths of time to resolve (4-6 weeks).
- You prefer to save in a form of money (Gold/Silver) which has been in use for thousands of years rather than one which has been around for less than half a century.
- You have a joint savings account with your partner and want to buy them a large gift with cash to avoid them finding out about it.
- You ask to withdraw a large amount of cash in order to purchase a vehicle as the current owner doesn't want to take a cheque.
- You refuse to provide a private business with your ID in order to secure a purchase of bullion (who wants a business to have your address where they suspect you might store the purchase).
- You run a small business and need to keep a cash float on hand to operate smoothly.
- You don't do anything illegal, but would prefer to keep your transactional or internet browsing history private anyway, it's none of the Governments business.
- You aren't doing anything illegal online, but you might still be prejudiced against for your activities anyway (e.g. organising anti-Government rally).
- You are pretty sure that there is a greater chance of someone doing something illegal with your information in the department gathering the data than of doing something illegal yourself so would rather keep your data private.
- You would prefer not to have a Government whose representatives have been known to lie, cheat, steal, spend wastefully, look up inappropriate websites & act like clowns in general to have even greater control over your life than they already do.
I could probably come up with a trillion more (remember the good old days when it was enough to exaggerate with the word million?), but there are only so many hours in the day. If you can think of some good ones drop them below in the comments and I will add them to the post.
BB.
