A World Without Cash
Imagine a world without paper money. Virtually all transactions are electronic—and recorded in searchable databases. Governments say everyone must have a bank account and use the system. It is supposedly an effort to make people safer by allowing officials to detect suspicious behavior. Agents are able to comb through decades of financial activity to identify questionable spending patterns. Authorities say they will stop terrorists and criminals. It is a world without anonymity.
Is your first response, “What a wonderful world that would be”?
That world is coming—and sooner than you think. Europe is leading the way.
In February, German Chancellor Angela Merkel’s coalition partners in the Social Democratic Party proposed abolishing the €500 note and introducing a €5,000 (us$5,600) limit on cash transactions. It is part of a plan to cut off terrorist financing in Europe. Banning the bills will supposedly help tighten security.
German Deputy Finance Minister Michael Meister told Deutsche Welle that Germany would push these reforms at the European level. “Since money laundering and terrorism financing are cross-border threats,” it makes sense to adopt a European Union-wide “solution,” he said. But “if a European solution isn’t possible, Germany will move ahead on its own” (February 3; emphasis added throughout).
The €500 note may be a favorite among criminals, but it is also popular among another large group of individuals: law-abiding citizens who don’t trust the banks or the government. For these people, physical money represents freedom: freedom to hold cash outside the banking system; freedom to conduct business privately; and freedom from government surveillance and overreach.
The curtailment of these freedoms has interesting potential implications in the fulfillment of biblical prophecy.
Under the Guise
Even though many people are strongly against it, Germany and Europe appear to be moving toward a cashless future. They are doing this for two reasons.
First, it is an effort to cut the “comfort for criminals,” as European Central Bank (ecb) President Mario Draghi told the European Parliament on February 1. Authorities want to force people to conduct transactions electronically—where suspicious activity can be detected and monitored. By forcing all transactions to go electronic, it will create a permanent trail. Theoretically, a record of every transaction you ever make could be kept and stored forever. It is a treasure trove for authorities looking for evidence of crime. And when evidence is found, potentially decades of financial transactions could be searched to ferret out financial connections, relationships and any other potential misdeeds.
Some big businesses support the move because it offers multiple opportunities for consumer-spending analysis and marketing possibilities. Banning paper money, however, is still an unpopular position.
In Germany in particular, there is a deep distrust of banks. The old deutsche mark had a 1,000-mark note. When Germany joined the euro, the €500 note was specifically created to assuage the public’s concern. Today, the vast majority of consumer transactions in Germany are still made in cash. Less than 20 percent are conducted with plastic. So getting rid of the €500 is a touchy subject.
Many Germans still remember the economic upheaval of the Weimar days and the destruction of wealth that took place in the banking crisis of the early 1930s. They remember the hyperinflation that made their money worthless in the 1920s, and they also remember the banking crisis that led to the rise of the dictatorial fascism of the Nazis.
Paper money is also popular in Germany because it is tangible. It can be held and stored outside the banking system. It isn’t just electronic digits on a computer ledger that can disappear with the click of a button. It isn’t something that a computer hacker halfway around the world can steal. In a world of economic upheaval, it is at least something people can hold in their hands or put under their mattresses and feel some security.
Yet if politicians have their way, eliminating the €500 note would remove one third of all euros in circulation.
Not long ago, few German politicians would have suggested eliminating paper money, because the German public is largely against it.
Then Europe changed. The Charlie Hebdo and Nov. 13, 2015, Paris terrorist attacks startled Europe. Islamic terrorism is the new fear. And politicians are exploiting it.
German opposition Green Party lawmaker Konstantin von Notz railed against the Social Democrats’ proposal. He said the plan to ban the €500 note is “a new fundamental attack on data protection and privacy.” The Euroskeptic Alternative for Germany’s monetary policy spokeswoman Alice Weidel called the cash ban an attack on freedom. “This measure … is a direct attack on the property rights of citizens,” she said. “If we give this up … citizens will lose an elementary right to their freedom and the way is paved tototal surveillanceof all areas of life” (Bundesdeutsche Zeitung, February 4; Trumpet translation).
Germans are currently free to take any desired amount of their own money out of the bank and spend it as they want without notifying anyone. But for how much longer?
“The €500 note and this objective of limiting cash have nothing to do” with each other, Mario Draghi sought to reassure European Union lawmakers in Brussels on February 15. Even if the ecb withdraws the €500 note, people will still be able to hoard the next-highest denomination of €200 if they want, he told the lawmakers.
His comments only raised concerns that authorities are working toward a total ban. After all, a handbag can still carry over €2 million in €200 notes. To have a real effect, the €200 and €100 notes would eventually need to be outlawed as well.
“The eurozone already plans to eliminate the €500 note—allegedly to hurt organized crime,” writes the Telegraph’s Ambrose Evans-Pritchard. “[F]rom there it is a slide down the scales to notes in daily use and then to curbs on quasi-money” (February 17).
What is the real reason for these new proposed rules?
The Real Goal
On Dec. 3, 2015, the European Central Bank cut its key interest rate deeper into negative territory. Negative interest rates occur when the bank charges you to deposit money. In this case, the central bank is charging the big commercial banks for putting money on deposit. It is an effort to coerce the big banks to make more loans—and thus theoretically jump-start the economy.
But with an economy stuck in recession, many banks are already stuffed full with junk loans. Italy’s banks are teetering on the edge of collapse (article, page 26). It is feared that even Banca Monte dei Paschi di Siena—the oldest bank in the world—may be headed toward failure.
No one knows how Europe’s banks will handle negative interest rates. If the banks start charging depositors interest—as opposed to paying it—it could cause many investors to yank out their money. This is the big fear: Negative interest rates could set off a chain reaction of old-school bank runs. It may already be happening.
So the trillion-euro question for monetary authorities is: How do you force people to keep their money in the banks when the banks are charging depositors interest? The answer seems to be, you make it difficult or illegal to withdraw money. This is the second reason authorities want to ban cash.
Stealth Bank Bailout
This is exactly what Citigroup’s top economist Willem Buiter recommended in April 2015. He said the world needed to outlaw cash.
According to Buiter, negative interest rates are the only way to jam more debt into the system. And to make this work without causing a bank run, authorities must abolish cash. They must do this, he says, because no one in his right mind would keep it in the system if he was being charged 6 percent per year.
Other leading economic authorities are echoing the call. The Bank of England’s chief economist said in September that cash should be eliminated and people should be charged for the electronic equivalent. The president of Norway’s biggest bank made similar remarks. On February 9, popular financial blog ZeroHedge posted a letter from Deutsche Bank’s respected credit analyst Dominic Konstam saying that negative interest rates should be passed on to depositors and any cash withdrawals should be taxed in order to encourage people to keep their money in the banks.
In case you don’t think governments would ever try outlawing cash, consider that in 2012 Spain banned all cash transactions above €2,500 ($2,800). Italy and France have outlawed all cash transactions over €1,000. Germany’s €5,000 proposal is comparatively high.
But governments may not have to work all that hard to get rid of paper money.
Sweden looks set to become the world’s first modern cashless society. According to Credit Suisse, 80 percent of all purchases in Sweden are now electronic. Consequently, Sweden’s supply of physical currency has dropped an astounding 50 percent in the last six years. Norway and Denmark are close behind. Norway says it will be cashless by 2020.
According to Casey Research’s Nick Giambruno, two major Swedish banks no longer carry any cash. Norway’s second-largest bank doesn’t take cash at its branch offices. Even homeless street vendors in Sweden use mobile card readers.
In 10 years, cash “probably won’t exist,” says Deutsche Bank ceo John Cryan.
Total Surveillance State
Europe is on the edge of a monetary revolution. It is going cashless—whether people like it or not.
Increasing numbers of people are using plastic. Some like the rewards they get for using credit cards. Others are unaware of the data that companies glean from their transactions. Consumers can now pay for purchases using their phones. And some companies are playing with inserting microchips under the skin of your hand or arm that would let you connect to computer systems and make payments by simply placing your hand on a scanner.
People are embracing electronic money for its convenience, and are being conditioned to give up their privacy. We live in a Facebook world where people willingly divulge personal information. Many people have forgotten what it is like to live under repressive totalitarian regimes that would use that data against them.
The onset of a cashless society has big implications. It is potentially a huge source of new power for bureaucrats and government regulators. Governments will be able to electronically observe and regulate all economic transactions. From buying broccoli to selling a sandwich, people’s actions will be cataloged and stored in databases for Europe’s watchdogs to sift through and monitor.
This will place potent power into the hands of government officials. In a cashless society, everyone will be forced to use electronic money and a banking system controlled by the government. In such a scenario, tyrannical leaders would have the ability to control what people are allowed to spend their money on, or when they are allowed to spend it—and they could even lock some people out of the system.
Beast Power Rising
Prophetically, these are pivotal developments. The Bible prophesies of a European superpower that will hold powerful sway over the global economy in the near future. This economic behemoth will have so much power that “no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name” (Revelation 13:17).
“The ‘mark’ is something that will be very popular—something the majority of people will be in favor of, will seek—which custom will approve as right,” wrote Herbert W. Armstrong in Who or What Is the Prophetic Beast? (free upon request). “Everyone wants to be able to ‘buy or sell.’ In this scriptural usage, the expression ‘buy or sell’ more literally indicates being able to buy—not that stores or those from whom one might make purchases of the necessities of life would refuse to accept the money, but that the one refusing the ‘mark’ would not be able to buy, would not be able to earn a living, to earn a wage or salary, or to engage himself in business.”
In his booklet, Mr. Armstrong proved just what the mark of the beast will be: a particular religious doctrine—Sunday observance. “And the world will be so geared that it will be almost impossible for one to ‘buy or sell’ except he receive this mark of the beast!” he wrote. As has happened in the past, he wrote, only those who submit to the religious ideology of the beast will be allowed to conduct commerce.
“Yes, the mark of the beast once again will be enforced! No one will be able to hold a job or engage in business without it. Those refusing will once again be tortured and martyred—probably by the secret police of the political state …” (ibid).
The rising European beast may not yet have the ability to enforce this mark on everyone. But there will soon be a United States of Europe—a union of 10 nations or groups of nations that will be a union of church and state—with the capacity and will to enforce it.
A cashless society in which all commerce can be observed, monitored and controlled by the government is a huge step in that direction. The beast is rising.