The mainstream press has been reporting that the Chinese feds have quarantined 46 million people to combat the coronavirus outbreak.
What’s less well-known is that the authorities there are also quarantining banknotes.
China’s central bank has cut off the transfer and allocation of old banknotes across provinces and cities most affected by the outbreak.
It’s also collecting banknotes and “sanitizing” them. Here’s Fan Yifei, the central bank’s deputy governor, during a press conference on Saturday…
Money from key virus-hit areas will be sanitized with ultraviolet rays or heated and locked up for at least 14 days, before it is distributed again.
This story isn’t making headlines in America. But as you’ll see in today’s dispatch, it needs to be on your radar.
It’s the latest angle of attack governments will start using in their ongoing War on Cash.
As regular readers will know, it’s the push to convince people to move to a completely digital money system… and obliterate what’s left of your financial freedom.
My name is Chris Lowe. My mission as editor of The Daily Cut is to help identify profit trends in the market – early on – so you can profit in your portfolio.
I do that by plugging you into the top moneymaking ideas from Teeka Tiwari, Jeff Brown, E.B. Tucker, and the rest of the Legacy Research team.
But I also keep an eye out for threats on the horizon… especially when it comes to your freedom.
It’s a founding principle of this newsletter… and across all our publications at Legacy… that there’s no point being wealthy if you’re not free.
Governments are selling the eradication of cash as a convenience. They claim it’s in the interest of public safety… or to crack down on crime.
But it’s aimed at further shrinking your freedom.
Here’s Legacy Research cofounder Doug Casey…
Soon all transactions will be done digitally. It’s wonderful – for the state. They’ll know every source of your income, who’s paying you, and for what. They’ll also know every allocation of your assets – what you’re buying, what you’re reading and watching, what you own, and where it is.
Doug’s fellow cofounder, Bill Bonner, agrees…
A ban on cash is not fundamentally financial at all. It’s fundamentally political. It’s just power. It plays into the hands of the elite to a huge extent through control via the government apparatus.
Buy a secondhand truck… or pay someone to cut your lawn or for tickets to a political rally… using cash from your wallet…
…and the feds aren’t privy to the details.
Your transaction – when it happened… who it was with… what time of the day it was at… how much it was for – won’t wind up as a permanent record in a government database. Only you and the other parties to the transaction need be involved.
That’s why governments want to kill off physical cash and replace it with a purely digital alternative they control.
In a cashless society, they’ll be able to track, monitor, and record every aspect of your financial life.
I’ll give you just one chilling example.
If the feds replace physical cash with e-cash, they could program in a negative rate. For example, every year you didn’t spend your e-dollar, it would lose 10% of its value.
That would make every $10,000 in savings shrink to $9,000 in year two… $8,100 in year three… $7,290 in year four… and so on.
That may seem harsh. And people might grumble.
But the feds will say it’s necessary to stimulate the economy… like they did for the TARP bailout in 2008… the quantitative easing (QE) that followed… and the evaporation of interest rates on your savings.
I’m not saying there aren’t good reasons to clamp down on cash with a deadly virus on the loose.
But I am suggesting that in every crisis there is an opportunity.
Bonner-Denning Letter coauthor Dan Denning actually prophesied this in the September 16, 2016, issue of his former daily e-letter Capital & Conflict. As he wrote at the time…
You run from a building that’s on fire to save your life. But it’s an act of desperation. Not calculation. To make people want to get rid of cash money desperately you have to go beyond price manipulation. You have to contaminate the money. Literally.
Do you see where I’m going with this? When cash becomes a vector for disease, when the contagion is viral, not financial, then the use of cash becomes a public health hazard. Its urgent removal becomes a matter of public safety and security. And the grounds for a wholesale currency substitution are in place.
China is already well on its way to becoming cashless. Already, 90% of transactions there are digital. Most are through private payment apps on smartphones.
But older folks still tend to prefer using banknotes for day-to-day transactions. The association between physical cash and sickness is a great way to get them to switch to digital.
That’s only natural. It’s thousands of miles away. What’s happening there seems distant from your day-to-day life.
But as we’ve been showing you, there is support for the idea in America, too.
Take François R. Velde. He’s a senior economist at the Chicago Fed.
He’s said that blockchain – the distributed database that powers cryptocurrencies – is an “elegant solution to the problem of creating a digital currency.”
Or take David Andolfatto. He’s senior vice president at the St. Louis Fed.
He’s proposed the U.S. adopt what he calls “Fedcoin.” And he’s spoken publicly about it on several occasions.
It’s completely digital, like bitcoin.
You can transact with it on a blockchain by way of a digital wallet app on your smartphone. But all the privacy and decentralization features of bitcoin are stripped out.
Here’s Doug again on why that matters…
Government digital currencies are an immense threat not just to financial freedom, but any type of freedom. It’s a “kinder and gentler,” but much more insidious, version of 1984. I’m honestly shocked that people aren’t up in arms about this. They should be furious that governments are moving towards digital currencies…
The government, or one of its agents, could decide to lock you out of your bank account. They could cut you off from your own money. And completely cut off your ability to buy, sell, travel, or do anything, should you be viewed as politically unreliable. I suspect that once you’re on a list, getting off will be much harder than getting off the TSA’s No Fly List – which is nearly impossible.
Tomorrow, we’ll have our regular mailbag edition for you. It’s a chance to ask your favorite Legacy analyst a question and read their response. So make sure to send in your questions on the War on Cash and the other ideas we cover. Write us at [email protected].
On Monday, we’ll continue our dive into our cashless future. And why it’s a lot closer than most people understand.
This week, I’ve been telling you all about why legendary trader Andy Krieger is coming forward after decades out of the spotlight.
If you don’t already know, Andy is the guy who netted $300 million in profits for his firm on a single currency trade.
Amazingly, that wasn’t even his biggest win yet. As he told me, he later netted $1 billion for a private speculator on a bet against another currency.
And at 8 p.m. ET tonight – just three hours from now – he’ll be revealing the full details of the “Black Swan” event he sees hitting currency markets in mid-2020.
Andy believes this move will be “unprecedented” and “dangerous.” And he says the move on its way means the biggest trade of his career is around the corner.
He’ll also be giving the details on a trade he believes you can use to turn every $1,000 into $30,000 over time.
If you’ve already signed up to attend, I hope you get a lot out of tonight’s event. I’ve been talking to colleagues in our Delray Beach, Florida, HQ. And there’s a huge buzz around there right now over tonight’s event.
It’s rare to get the opportunity to follow the trades of a legend like Andy. And we’re glad to be able to spread the word.
To attend tonight’s event for free, go here now. You’ll be able to livestream Andy’s event from the comfort of your home.
Regards,
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Chris Lowe
February 20, 2020
Dublin, Ireland
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