Feb 1/Gold and silver rebound on non committal Fed on rate hikes/In Italy youth unemployment rises above 40% and credit default swaps rise as well as sovereign bond yields/England’s Parliament gives green light to start BREXIT/Republicans use loop hole to pass Price and Mnuchin at the committee hearings: next stop for then is the full senate vote/Tillerson is confirmed/Huge deposit of 10.67 tonnes of gold into GLD/FINAL DRAFT

Gold at (1:30 am est) $1205.60 down    $3.00

silver  at $17.42:  down 9 cents

Access market prices:

Gold: $1209.00

Silver: $17.52



The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning

The fix for London is at 5:30  am est (first fix) and 10 am est (second fix)

Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.

And now the fix recordings:

WEDNESDAY gold fix Shanghai

Shanghai FIRST morning fix Feb 1/17 (10:15 pm est last night): $  holiday



Shanghai SECOND afternoon fix:  2: 15 am est (second fix/early  morning):$   holiday


   SPREAD/ 2ND FIX TODAY!!:  $xxx

China rejects NY pricing of gold  as a fraud/arbitrage will now commence fully


London FIRST Fix: Feb1/2017: 5:30 am est:  $1210.00   (NY: same time:  $1210.40   (5:30AM)


London Second fix Feb 1.2017: 10 am est:  $1203.65 (NY same time: $1201.60  (10 AM)

It seems that Shanghai pricing is higher than the other  two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.

Also why would mining companies hand in their gold to the comex and receive constantly lower prices.  They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.


For comex gold:



For silver:



For silver: FEBRUARY



Let us have a look at the data for today



In silver, the total open interest  ROSE by 5,656 contracts UP to 186,839 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .934 BILLION TO BE EXACT or 133% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold ROSE BY 6984 contracts WITH THE RISE IN  THE PRICE GOLD ($17.40 with YESTERDAY’S trading ).The total gold OI stands at 398,433 contracts

we had 1,159 notice(s) filed upon for 115,900 oz of gold.



With respect to our two criminal funds, the GLD and the SLV:


We had a huge  change in tonnes of gold at the GLD/a massive “deposit” of 10.67 tonnes

Inventory rests tonight: 809.74 tonnes



we had a good sized change in silver into the SLV: a withdrawal of 948,000 oz

THE SLV Inventory rests at: 334.849 million oz



The FRBNY reported that we have 7,841 million dollars worth of gold in inventory valued at $42.22 for December.

The previous month we had 7,841 million dollars worth of gold inventory valued at $42.22 for December.

We thus had 0 gold oz moved out of inventory



First, here is an outline of what will be discussed tonight:


1. Today, we had the open interest in silver RISE by 5,656 contracts UP to 186,839 AS SILVER WAS UP 39 CENTS with YESTERDAY’S trading. The gold open interest ROSE by 6,984 contracts UP to 398,433 WITH THE RISE IN THE PRICE OF GOLD OF $17.40  (YESTERDAY’S TRADING)

(report Harvey


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

2c) COT report





i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed HOLIDAY/ /Hang Sang closed . The Nikkei closed UP 106.74 POINTS OR .56% /Australia’s all ordinaires  CLOSED UP 0.51%/Chinese yuan (ONSHORE) closed HOLIDAY at 6.8840/Oil ROSE to 53.16 dollars per barrel for WTI and 55.94 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.8295 yuan to the dollar vs 6.8840  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS QUITE A BIT AS POBC ATTEMPTS TO STOP DOLLARS FROM LEAVING CHINA’S SHORES.





It is now Japan’s turn to respond to Trump’s accusations of Yen manipulation

( zero hedge)




Italian youth unemployment rises above 40%. Sovereign Italian bond yields rise but also we witness that sovereign bond risk soars to 3 yr highs (credit default swaps)

( zero hedge)


Initially French markets slump as Le Pen gains in the polling:

( zero hedge)

iii)The French political scandal continues in earnest as the front runner Fillon would be eliminated in the first round by Macron. The pollsters still predict either Fillon or Macron would defeat LePen.  However the uncertainty is causing French bond yields to rise

( zerohedge)

iv) EU

( zero hedge)

As expected Theresa May crossed her first hurdle towards a BREXIT as the House oc Commons easily passes a bill authorizing the start of European Union exit talks
the Pound/USA dollar falters a bit.
( zero hedge)



Russia is not a happy camper when they witness Germany deploy tanks and troops to Lithuania to bolster ‘confidence in the face of Russian aggression”

( zerohedge)


Iran admits to firing their new missile which clearly puts the nuclear deal in jeopardy. Trump will be looking for excuses to tear up the nuclear deal

(courtesy zero hedge)

iii)This ought to be good for oil and gold:  Gen Flynn has just put Iran on notice:

( zero hedge)




i)You knew that this was going to happen as the DOE reports on a huge crude build along with a huge gasoline buildup

( DOE/zero hedge)

ii)The author suggest that an oil price was will begin shortly

( Paraskova/OilPrice.com)


none today


i)I certainly brought this to your attention yesterday.  Now Shawn Donnan of London’s Financial Times picks up on this very important topic

( Donnan/London’s Financial Times)

ii)Lawrie Williams continues with his assessment of a huge flow of Swiss gold into China.  How is Switzerland getting its gold?  From England.

Next question:  From whom is England taking this massive amount of gold from?

( Lawrie Williams/Sharp’s Pixley)


i)Unanimous Fed holds rates constant as expected; no hint of a March rate hike. Gold rises and the yield curve flattens:  policy error??

(courtesy zero hedge)

ii)Meet the new USA Supreme Court Justice Neil Gorsuch.  No doubt he will be confirmed by hook or crook

( zero hedge)

iii)Despite the majority of Americans in favour of  Trump’s immigration policy, 900 state department staff dissent

( zero hedge)

iv)The private  (and phony) ADP report shows a huge 246,000 private job gains in January

( ADP)

iv b)The ISM data shows the big difference between “hard” data and “soft” data.What is most important is stagflation is certainly upon us as input costs soar causing inflation but we have minimal growth:

( zerohedge/ISM)

v)This is big news.  The Republicans change the confirmation rules in committee to overcome the democrat boycott on Price and Mnuchin.  The new rules allowed a vote to tbe taken even if no democrat is present.

I am of the belief that Mnuchin will hold to keys to the gold movement out of the uSA. There is no doubt that an executive order was given by Obama to allow uSA gold to leave USA shores.  That will stop once Mnuchin is in.

( zero hedge)

vi)The Democrats are at it again as they try blocking the Trump EPA nominee, Pruitt. That will fail as well as the Republicans found a loophole for a vote to occur even if no democrat is present.

( zerohedge)

vii)The ISM data shows the big difference between “hard” data and “soft” data.What is most important is stagflation is certainly upon us as input costs soar causing inflation but we have minimal growth:

( zerohedge/ISM)

viii)the Senate confirms Rex Tillerson as Sec of State

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 6,984 CONTRACTS UP to an OI level of 398,433 WITH THE RISE IN THE  PRICE OF GOLD ( $17.40 with YESTERDAY’S trading).  We are now in the contract month of FEBRUARY and it is one of the better delivery months  of the year. In this next big active delivery month of February we had a LOSS of 2,987 contracts DOWN to 3468.   We had 3291 notices served upon yesterday and therefore we gained 304 contracts or an additional 30,400 oz will stand for delivery.  This is the first time in over 3 years that we have gained in oz standing on the second day notice.  Somebody is in urgent need of physical gold. The next non active contract month of March saw it’s OI rise by 436 contracts up to 2906.The next big active month is April and here the OI rose by 7,977 contracts up to 271,136.


We had 1159 notice(s) filed upon today for 115,900 oz


And now for the wild silver comex results.  Total silver OI ROSE by 5,656 contracts FROM 181,183 up to 186,839 AS the price of silver ROSE IN PRICE TO THE TUNE OF 39 CENTS with respect to YESTERDAY’S trading.  We are moving  further from the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540).

The  active month of February saw the OI FALL by 61 contract(s) DOWN TO  185.  We had 88 notices served upon yesterday so we GAINED 27 CONTRACTS  or an additional 135,000 oz will stand.  I cannot  ever recall seeing both precious metals, gold and silver,  show an increase in amount of oz standing for delivery on the second day notice.

The next big active delivery month is March and here the OI increase by 1466 contracts up to 133,494 contracts. For comparison purposes last year on the same date only 104,561 contracts were standing.

We had 50 notice(s) filed for 250,000 oz for the FEBRUARY contract.

VOLUMES: for the gold comex

Today the estimated volume was 99,907  contracts which is poor.

Yesterday’s confirmed volume was 262,796 contracts  which is good

volumes on gold are getting higher!



INITIAL standings for FEBRUARY
 Feb 1/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 13,953.708 OZ
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 nil  oz
No of oz served (contracts) today
1159 notice(s)
115,900 oz
No of oz to be served (notices)
2330 contracts
233,000 oz
Total monthly oz gold served (contracts) so far this month
4450 notices
445,000 oz
13.841 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month     21,916.8 oz
Today we HAD 2 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 0  customer deposit(s):
total customer deposits; nil oz
We had 3 customer withdrawal(s)
i) Out of Manfra:  32.15 oz (1 kilobar)
ii) Out of HSBC: 9,259.485 oz
iii) Out of JPMorgan; 4662.073 oz
total customer withdrawal: 13,953.708 oz
We had 1  adjustment(s)
i)Out of International Delaware: 96.45 oz was adjusted out of the dealer and this landed into the customer account of I.D.  (3 kilobars)

Today, 0 notice(s) were issued from JPMorgan dealer account and 700 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1159 contract(s)  of which 105 notices were stopped (received) by jPMorgan dealer and 33 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

To calculate the initial total number of gold ounces standing for the FEBRUARY. contract month, we take the total number of notices filed so far for the month (4450) x 100 oz or 445,000 oz, to which we add the difference between the open interest for the front month of FEBRUARY (3468 contracts) minus the number of notices served upon today (1159) x 100 oz per contract equals 675,900 oz, the number of ounces standing in this  active month of FEBRUARY.
Thus the INITIAL standings for gold for the FEBRUARY contract month:
No of notices served so far (4450) x 100 oz  or ounces + {(3468)OI for the front month  minus the number of  notices served upon today (1159) x 100 oz which equals 675,900 oz standing in this non active delivery month of FEBRUARY  (21.023 tonnes)
 we gained 304 contracts or an additional 30,400 oz will stand in this active delivery month.
On first day notice for FEB 2016, we had 20.124 tonnes of gold standing. At the conclusion of the month we had only 7.9876 tonnes standing. The data suggests that we had almost identical amounts standing in Feb ’16 and Feb 2017; however today’s totals already surpassed the final amt which eventually stood  in 2016.(already 13.841 tonnes vs 7.9876 at the end of Feb).
I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov.    8.3950 tonnes.
DEC.   29.931 tonnes
JAN/     3.9004 tonnes
FEB/ 21.023 tonnes
total for the 14 months;  247.120 tonnes
average 17.651 tonnes per month vs last yr  59.51 tonnes total for 14 months or 4.250 tonnes average per month (last yr).
Total dealer inventory 1,428,632.919 or 44.436 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,972,364.533 or 279.507 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 279.07 tonnes for a  loss of 24  tonnes over that period.  Since August 8/2016 we have lost 75 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
And now for silver
 feb 1. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
1,769,178.960 0z
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
601,689.360 OZ
No of oz served today (contracts)
(250,000 OZ)
No of oz to be served (notices)
135 contracts
(675,000  oz)
Total monthly oz silver served (contracts) 138 contracts (690,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month   1,769,178.9 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 3 customer withdrawal(s):
i) Out of HSBC: 630,507.750 oz
ii) Out of Brinks; 508,680.710 oz
iii) Out of CNT: 629,889.470 oz
 we had 1 customer deposit(s):
i) Into Scotia:   601,689.360 oz
i) Into JPMorgan:  zero  oz**
deposits into JPMorgan have now stopped.
total customer deposits;  601,689.360   oz
 we had 1  adjustment(s)
i) Out of CNT: 246,506.210 oz  was adjusted out of the customer and this landed into the dealer account of CNT
The total number of notices filed today for the FEBRUARY. contract month is represented by 50 contract(s) for 250,000 oz. To calculate the number of silver ounces that will stand for delivery in FEBRUARY., we take the total number of notices filed for the month so far at  138 x 5,000 oz  = 690,000 oz to which we add the difference between the open interest for the front month of feb (185) and the number of notices served upon today (50) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the FEBRUARY contract month:  138(notices served so far)x 5000 oz  + OI for front month of FEB.( 185 ) -number of notices served upon today (50)x 5000 oz  equals  1,365,000 oz  of silver standing for the Feb contract month. This is  huge for a non active delivery month in silver. 
We gained 27 contracts or an additional 135,000 oz will stand.
At first day notice for the FEB/2016 silver contract month we initially had 515,000 oz standing for delivery.  By the conclusion of the delivery month we had 835,000 oz stand as some of the bankers required immediate silver inventory.
Volumes: for silver comex
Today the estimated volume was 75,660 which is excellent
YESTERDAY’S  confirmed volume was 67,610 contracts  which is excellent.
Total dealer silver:  30.205 million (close to record low inventory  
Total number of dealer and customer silver:   179.637 million oz
The total open interest on silver is NOW moving away from  its all time high with the record of 224,540 being set AUGUST 3.2016.


And now the Gold inventory at the GLD

Feb 1/a huge “deposit” of 10.67 tonnes of gold into the GLD/Inventory rests at 809.74 tonnes.  this should stop GLD from sending gold to Shanghai.

JAN 31/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

jan 30/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

Jan 27/no changes at the GLD/Inventory rests at 799.07 tonnes

Jan 26/no changes at the GLD/Inventory rests at 799.07 tonnes/

jan 25/another exactly the same withdrawal as yesterday: 50.4 tonnes and again this was used in the whacking of gold today/inventory rests at 799.07 tonnes

jan 24/a huge withdrawal of 5.04 tonnes and probably this was used today in the whacking of gold/inventory rests at 804.11 tonnes

Jan 23/a big change/this time a deposit of 1.19 tonnes of gold into the GLD/inventory rests at 809.15 tonnes.  The drainage of gold from the GLD to Shanghai has now stopped!

Jan 20/no changes in gold inventory a the GLD/Inventory rests at 807.96 tonnes

Jan 19/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 18/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 17/17/a deposit of 2.96 tonnes of gold/inventory at the GLD rests at 807.96 tonnes.  I guess there is no more gold inventory to sent to C+Shanghai

Jan 13/17/there were no changes in gold inventory at the GLD/Inventory rests at 805.00 tonnes

Jan 12/2017/no change in gold inventory at the GLD/Inventory rests at 805.00 tonnes

Jan 11/no change in gold inventory at the GLD/Inventory rests at 805.00 tonnes

JAN 10/no changes in gold inventory at the GLD/Inventory rests at 805.00 tonnes


Jan 6/no changes in gold inventory at the GLD/inventory rests at 813.87 tonnes
Jan 5/no change in gold inventory at the GLD/inventory rests at 813.87 tonnes
Jan 4/no change in inventory/inventory rests at 813.87 tonnes
Jan 3.2017/a huge 9.49 tonnes of gold leaves the GLD/inventory rests at 813.87 tonnes
DEC 30/no changes in gold inventory at the GLD/Inventory rests at 823.36 tonnes
Feb 1/2017/ Inventory rests tonight at 809.67 tonnes


Now the SLV Inventory
Feb 1/a withdrawal of 948,000 oz from the SLV/Inventory rests at 334.849 million oz
Jan 31.no change in inventory at the SLV/Inventory rests at 335.797 million oz
jan 30/no change in inventory at the SLV/Inventory rests at 335.797 million oz
Jan 27/we had a deposit of 758,000 oz into the SLV/Inventory rests at  335.797 million oz
Jan 26./ a huge withdrawal of 2.369 million oz from the SLV/Inventory rests at 335.039 million oz
Jan 25./another changes at the SLV/Inventory rests at 337.408 million oz
jan 24/ a withdrawal of 948,000 oz at the SLV/Inventory rests at 337.408 million oz
Jan 23/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 20/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
jan 19/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 18/no changes in silver inventory/inventory rests at 338.356 million oz/
Jan 17/no change in silver inventory at the SLV/Inventory rests at 338.356 million oz/
Jan 13/2017/on changes in the SLV inventory/rests tonight at 338.356 million oz/
Jan 12.2017/ no changes in the SLV Inventory/ rests at 338.356 million oz
JAN 10/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
JAN 9/no changes in inventory at the SLV/Inventory rests at 341.199 million oz/
jan 6/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
Jan 5/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
Jan 4/a small withdrawal of 149,000 oz (probably to pay for fees/inventory rests at 341.199 million oz
Jan 3.2017/no changes in silver inventory at the SLV/Inventory rests at 341.348 million oz/
DEC 30/no changes in silver inventory at the SLV/inventory rests at 341.348 million oz/
feb 1.2017: Inventory 334.849  million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.9 percent to NAV usa funds and Negative 8.3% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.1%
Percentage of fund in silver:39.7%
cash .+0.2%( feb 1/2017) 
2. Sprott silver fund (PSLV): Premium FALLS to +.07%!!!! NAV (Feb 1/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS TO – 0.33% to NAV  ( feb 1/2017)
Note: Sprott silver trust back  into POSITIVE territory at +0.07% /Sprott physical gold trust is back into NEGATIVE territory at -0.33%/Central fund of Canada’s is still in jail.


Major gold/silver trading/commentaries for WEDNESDAY


The Alternative Fact of the Cashless Society

Why gold will benefit from the alternative fact of the cashless society

  • Alternative facts prevail in the European Commission’s calls for cash controls
  • Terrorism is blamed for the need to control cash
  • Evidence shows criminals find alternative ways to finance activities
  • Citizens continue to want and to use cash in day-to-day life
  • Cashless society is being used to force through other ‘agendas’
  • Gold and silver will be used as savers are forced to hold assets outside of the financial system


Why gold will benefit from the alternative fact of the cashless society

“Those who control the present, control the past and those who control the past control the future.”

George Orwell, 1984

Last week a new phrase was introduced into our lexicon by Trump Adviser Kellyanne Conway. When asked about why press secretary Sean Spicer had made statements that were (according to the press) unverifiable she said that he had used ‘alternative facts’.

This prompted a raft of satire, journalists to flail their arms up at the audacity of Conway and Trump’s administration, and for people to rush out and buy George Orwell’s 1984.

Penguin, the world’s largest publisher, ordered a 75,000 copy reprint last week. Apparently more than the ‘typical reprint’ for the 1949 Orwellian classic. The ‘alternative facts’ statement echoed of ‘Newspeak’ the language used by the totalitarian government in Orwell’s 1984 to influence and control its citizens of Airstrip One (previously Britain).

European Commission Embraces Newspeak

A day after Conway’s interview the European Commission took of the advantage of the furore that continues to surround the Trump administration (the shock that the President is doing exactly what he promised to do) and introduced a proposal enforcing “restrictions on payments in cash.”

The EC apparently like to use their own version of alternative facts when it comes to arguing why we should be going cashless.

The proposal is based on a plan from February 2016 that explained, “Payments in cash are widely used in the financing of terrorist activities… In this context, the relevance of potential upper limits to cash payments could also be explored. Several Member States have in place prohibitions for cash payments above a specific threshold.”

And whilst terrorists do no doubt use cash to finance some activities (the US has purportedly blown-up stockpiles of ISIS’ cash), research shows that countries with higher denominations of cash in fact experience lower levels of crime and corruption.

And what about those non-criminals? EC are failing to address the fact that law-abiding citizens still like to use cash and will continue to whilst negative interest rates and bail-ins remain a reality. Not to mention the privacy it affords us.

This Newspeak is starting to feel like we’re supposed to feel bad about using cash and instead should become inclined to move to a cashless way of life. Whilst the EC is still in proposal-stage we should be reminded that the move to cashless is very much in play, as we explained in Cashless society – War on Cash to Benefit Gold?.

Cash-free does not mean terrorism free

As pointed out by Zerohedge the proposal is very focused on stopping terrorism, crime and money laundering. It states:

‘Potential restrictions to cash payments would be a mean to fight criminal activities entailing large payment transactions in cash by organised criminal networks…Terrorists use cash to sustain their illegal activities, not only for illegal transactions (e.g. the acquisition of explosives) but also for payments which are in appearance legal”

currencyBut, as argued in the Sovereign Man blog, economists such as Rogoff and Stiglitz and government organisations such as the EC are relying on the myth that ‘cash facilitates illegal activity.’

Who is so naive to think that a ban on cash will stop terrorism? What they have missed is that criminal and terrorist leanings facilitate such activities, they will always find some form of means of exchange to facilitate it.

Sovereign Man explains that criminals and terrorists can, miraculously, use means other than physical cash in order to facilitate illegal activities.

“The US military has literally blown up more than a billion dollars worth of ISIS’s stockpiles of physical cash during airstrikes.

But this hasn’t affected their terrorist activities one bit.

That’s because the most notorious terrorist group on the planet famously uses both the world’s oldest currency (gold) and the world’s newest currency (Bitcoin).”

And it’s not just big terrorist groups who are able to work their way around a cash-based monetary system.

“What Stiglitz, and perhaps many law enforcement agencies, fail to realize is that one of the biggest tools in masking illegal activity is actually Amazon.com.

Specifically, Amazon gift cards.

If you’re looking to quietly and easily pay large sums of money, even tens of thousands of dollars, you can do so with Amazon gift cards.

Amazon gift cards are essentially a “cash equivalent”.

Amazon sells just about everything on the planet, so its gift cards can either be spent or quickly resold for cash.”

Cash will soon not be a right

The EC, Rogoff and Stiglitz are all behaving as though cash is only used for illicit activities. There is apparently little thought to those of us who still use cash. Most of us look at cash as something that is both convenient and provides a way to spend money without it being anyone else’s business other than ours and the seller. But governments label this as suspicious with the intention to get us away from cash so that the banking system may be propped up and ‘bailed-in’ by our funds.

There is but a fleeting mention of the fundamental right to use cash in this recent EC proposal but it is quickly dismissed:

It should also be observed that national restrictions to cash payments were never successfully challenged based on an infringement to fundamental rights.”

Cash is still widely used, by both citizens and big businesses but this has not stopped both governments and banks looking to move us away from using cash.

The most recent example of a shift to a cashless society was of course the demonetisation of 500 and 1,000 rupee notes in India. Whilst Prime Minister Modi acknowledged that millions had been affected he reiterated calls for the country to become a cashless society.

Meanwhile In Ireland companies are making investments on the basis of the future cashless society. US company EVO, a payment processing partner of Bank of Ireland, announced a €9.1 million move to the country that is embracing a cashless way of life. Brian Cleary, managing director of BOI Payment Acceptance Ireland and UK, an arm of Evo Payment International told the Irish Independent, ”With over six million debit and credit cards in the market, debit card spend on the increase year-on-year and over 35,000 Irish businesses offering contactless payment facilities, this number continues to grow.”

concentration-of-independent-atms-under-threatIn the UK, cashless is almost as popular as the likes of the Scandinavian countries. In August 2016 More than 260 million contactless transactions were made in the UK, a 200% increase from the year before. According to a Telegraph article, ATMs are close to becoming extinct as banks will no longer finance them. Rural areas will be “the hardest hit with the South West, Scotland, and the South East where 44pc, 40pc and 33pc of cash points are under threat”

The threat of a cashless society is seemingly greater than ever, so much so that MPs are being called to investigate. As Ron Delnevo, director of the ATM Industry Association in Europe, told the Telegraph: “Some organisations want to drive people away from cash because it suits their agenda.” He also warned of a “domino effect”, saying that if one big bank pulled out of the arrangement “the whole thing will just melt”. 

Cash controls will extend beyond cash

The EC doesn’t intend to stop just at putting controls on (or even outright banning) cash. Under the guise of preventing anonymity they believe that restrictions should be placed on all means of payment that mean people can have some privacy:

“In view of the development of cryptocurrencies and the existence of other means of payments ensuring anonymity, an option could be to extend the restrictions to cash payments to all payments ensuring anonymity (cryptocurrencies, payment in kinds, etc.). On the other hand, restrictions on cash payments could promote the development of alternative payments technologies compatible with the non-anonymity objective pursued.”

Aside from what this means for all forms of payments, it ultimately means that the EC has decided that