Warning: Central Banks Pushing for Financial Slavery

In the past people knew that the worlds leaders were.

They were Kings, Queens, Crown Princes, Presidents, Emperors, and Prime Ministers.

They lived (and still perform) in palaces, castles, as well as fancy homes.

But today, the titles of those running the planet have changed. Today, they have comparatively non-descript titles such as chairman and governor.

Todays world leaders are the chiefs of the worlds central banks. And based on recent comments from one of the worlds most effective central banks, they are set on achieving total world control.

If that sounds extreme, wait until here hear what they had to say…

This was in a speech given by Financial institution of England chief economist, Andrew Haldane, on 18 September:

One fascinating solution, then, would be to keep up with the principle of a government-backed currency, but have it issued in an digital rather than paper form. This could preserve the social convention of a state-issued unit of accounts and medium of trade, albeit with currency now held in digital rather than bodily wallets. But it would allow negative interest rates to be levied upon currency easily and quickly, so relaxing the ZLB constraint.

Like all central bank speeches, the aim is to confuse or hide the real message. But when you read it a couple of times, youll get the drift.

Well explain in clear language what hes saying in a moment. But first, heres the context.

For central bankers, this is better than inflation

One of the things that has annoyed central bankers is the fact that when interest rates are so reduced, there is no incentive for saving bed to keep money in the bank.

Thats especially so if savers are worried concerning the stability of the banking system.

If youre earning next to nothing on a financial institution deposit, why risk letting a bank look after your money? The folks in Greece realised this particular. Thats why they started pulling out cash and stashing it in fridges, medicine cabinets, and even vacuum cleaners!

Why is that a problem?

Its an issue because banks need to have a certain amount of capital on hand. This is usually in the form of deposits or financial debt issued by the bank, or government securities.

So if people pull away their savings from the bank, it affects the amount of capital the bank has on hand to cover the loans it has written.

The solution? Make it impossible for people to withdraw cash. And instead have the government issue money in electronic form, which must then be kept in a government-approved bank account.

To repeat Mr Haldanes comments:

This would preserve the social convention of a state-issued device of account and moderate of exchange, albeit along with currency now held in electronic rather than physical wallets. However it would allow negative interest rates to be levied on currency effortlessly and speedily, so calming the ZLB constraint.

Read the last phrase from the quote again: But it would allow negative interest rates to be levied on currency effortlessly and speedily.

Mr Haldane is saying that this would allow the central bank to confiscate money easily and speedily through savers. Because that is what main bankers mean by negative interest rates.

Hes also saying that plain seizure of savings by using unfavorable interest rates is a lot easier and faster than inflation. Inflation may take months or years to develop.

So, aside from assisting the banks, why else would a central bank want to do this?

Its confiscation by another name

One of the big frustrations for governments is that people arent spending enough cash.

They see that as the main cause of the current low levels of economic development. Thats why theyve told their central banks to print countless billions and trillions of dollars.

Its why in 2009 the Australian government sent cheques in the post, in order to get people to invest.

But when people are worried about the future, theyre less likely to spend. People are generally sensible. They want to set money aside, budget, and not end up being wasteful.

So, governments have gone additional into debt in order to counter this. Its why the Aussie government is now in debt to the tune of $391.4 billion.

Its why, according to the report from McKinsey & Co, government debt has grown faster than any other field. Global government debt is continuing to grow 9.3% each year from 07 to 2014. By contrast, household financial debt has only increased 2.8% each year.

Perhaps youre starting to get it. If the just form of money is electronic cash, its easy for the government to seize this through negative interest rates.

The only way the government cant seize your savings isif you dont have any savings. And you wont have any savings if you invest your money because youre afraid of the government taking it with negative interest rates.

The trend is clear. Weve cautioned for more than six years that the government was planning to grab private superannuation wealth. But weve also warned that regular cost savings were at threat as well.

A new form of financial captivity is fast approaching. Your employer will pay your wages into the bank (as it does now). However in the near future, itll be a race to spend your wages as quickly as possible before the federal government swipes it all.

If you think this is far-out and whacky, thats fine. Just remember that central bankers dont say things that will make them look silly amongst their peers. Mr Haldane has published these views simply because its an idea that governments and central bankers are thinking about right now.

You ignore this risk at the peril.

Cheers,

Kris

PS: This is all proportional to what Vern Gowdie calls the Great Credit score Contraction. After decades of fast money and low interest rates, Vern says the worlds economy (including Australia) is on the verge of a Long Bust. It has stressing implications for all Australians. Find out more here.