Sunday, May 31, 2015

Some Q&A about this Blog

My blog stats indicate that each week we get new readers here. Below are some Q&A about this blog for new readers (or existing readers) that may help give some background as to what the blog is attempting to do. Please feel free to email me questions or comments any time.


Q: What is the primary purpose of this blog?

A: The primary purpose of the blog is to provide a free information resource to the public on important monetary system issues. A secondary purpose (and one I feel is important) is to create an archive of documented information that readers can go back and reference over time. The archived articles are all listed over on the right hand panel of the blog and go all the way back to January 2014 when the blog started. This archive documents many of the warnings issued by the IMF and the Bank for International Settlements over the past year or more. In addition, the forecasts of those experts we follow are documented as well. Readers can compare various sources of information (mainstream media sources versus alternative media sources for example) because views and articles from both can be found. 

Q: Why are you doing this?

A: For various reasons. Doing research to write articles helps keep myself better informed. After following this topic for a long time, I felt like there was a need for something directed towards the average person that does not advance a religious or political agenda and that is not affiliated with trying to promote or sell something to readers. There is nothing wrong with political and religious views. There is nothing wrong with selling or promoting a product or service. But for this blog, I want readers to feel as if this is just a free public resource that presents quality information and encourages readers to make up their own minds about what to do with the information. I want every reader to feel welcome here.

Q: How much time do you spend on this blog per week?

A: It varies of course. But I try to publish at least one article a day. To publish one article I usually read anywhere from 5 to 10 articles to use as the source for my blog post. It probably takes an hour or more a day to get one article published so I'll say 10 hours per week or 40 hours per month.

Q: How broad is the readership for the blog?

A: I can't answer that exactly, but I can say that at least 120,000 people have visited the blog so far. My blog stats indicate people from over 45 different nations around the world have visited. I get emails from readers that let me know some very well known people do read the blog. In addition, some of the articles on the blog have been published on other sites and viewed by many more thousands of people there. I don't mind any site using articles from the blog. I do ask that they not change the original text in the articles. And if they link back to the blog here, that is appreciated. But my primary goal is to get quality information to the public at no cost to them. The more people who know about the blog, the better I can do that.

Q: Will this blog ever be converted to a paid subscription site only?

A: Absolutely not. This site will always be free to all readers as long as it exists.

Q: How do you select the sources and experts featured on the blog?

A: I actually devote a lot of time and thought to that. This blog is attempting to attract the interest of the average person who probably is not going to think much about monetary system change or how it might impact their life. That's understandable since the topic can be confusing and hard for the average person to relate to as impacting their life. My goal is to try and use media sources most people recognize and a select group of experts who have strong credentials. I can't expect someone to listen to "unknown sources" or put a lot of weight on my opinions because I am just an average person myself. There are many other good sources and experts out there, but I try to carefully choose those that I think most people can relate to and will recognize. Also, I try to avoid the promotion of a political agenda which excludes some experts who are overtly political. There is nothing wrong with holding strong political views, but they can be divisive when the goal is just to reach the average person with pure information with as little bias as possible. I also attempt to present a wide variety of views and treat all views with respect.

Q: Will we have another major global financial crisis?

A: I don't know. Some of the experts I follow believe we will. Others think the risks to the system can be managed to avoid it. So far, the risks have been managed. Since no one can be sure about the future I don't think anyone can know for sure. I think the best idea is to have a plan in mind in case there is another crisis, but not to worry about it constantly. I get highly credible feedback that those running the present system are aware of the risks to the system and work is always underway to manage those risks. I am sure more is being done than the general public is aware of. All we can do is stay alert and informed and see what happens.

Q: How can this blog help me?

A: The blog can help you by saving you time. After following this topic now for over 10 years I do know many good information sources that talk about this topic. I review those and pick out what I think are the best so readers don't have to spend time to find them. In addition, all readers are welcome to send in questions if there is an issue I missed that they are interested in. Think of it kind of like an executive summary for readers that hopefully saves them time and keeps important issues in front of them.

Q: How can readers help?

A: Questions are always welcome. If there is a relevant topic I have overlooked, please let me know and I will look for quality information on it if I can. Many readers send me links to excellent relevant articles as well. Those extra eyes and ears help improve the content on the blog. Lastly, if you find the information here worthwhile, telling others about it is a huge help. 

Q: How can I contact you with a question or comment?

A: Just send it to this email address:

If the information here is helpful for people new to this topic, then the more people that find the information the better. Monetary system change can impact the life of the average person in a very real way. Therefore, the more they understand about it, the better decisions they can make in their personal planning. So I feel we all have an obligation to help each other out in trying to get the best information we can find out to as many people as will listen. Many people have helped me. The least I can do is try to help out someone else. That is really what this blog is about at the end of the day.

Changes Coming in Food Production - Off Topic But Interesting

This is one of those off topic news items we run on here now and then. It talks about possible changes coming in the way food is supplied. Some will like it and some won't I am sure. Below are a few quotes from this CNBC artricle on Sustainable Foods.

"This is not a product for vegetarians," claimed Patrick Brown, a Stanford biologist and physician turned food-tech entrepreneur about the meatless yet purposely meatlike hamburger his Redwood City, California-based start-up, Impossible Foods, is developing. "Our whole reason for doing this is to provide choices for people who are uncompromising meat lovers."

Up the road in San Francisco, Josh Tetrick, a former college linebacker and Fulbright scholar, insisted that his three-year-old food company,Hampton Creek, which uses a laboratory-born egg substitute to make mayonnaise and cookies, "is not about reaching out to health-conscious consumers.   . . . 

Although this pair of CEOs are vegans, they're adamant about not preaching veganism or vegetarianism to the masses. Instead, they say they are part of the sustainable food movement, which includes the existing spate of soy-based meat substitutes as well as organics and free-range animals.
They're among a growing group of global leaders who are making it their business to confront the dramatic growth of the world's population, estimated to exceed 9 billion by 2050, which would require raising overall food production by at least 70 percent, the FAO reports. A huge burden on the planet's livestock, land, water and other resources.

Saturday, May 30, 2015

News Note: Texas Could Create its own Fort Knox

For those of us who live in Texas this news article in the Houston Chronicle may be of interest. It says the Texas Legislature may be about to pass a bill which would establish and administer the state's first gold bullion depository. The article goes on to say that various Texas entities including the University of Texas own over $1 Billion worth of actual gold bullion (which probably comes as a surprise to many people). Below are a few quotes.


"Texas could get its own version of Fort Knox, the impenetrable repository for the nation's gold bullion, if the Legislature gets its way.
Under House Bill 483, approved unanimously on Tuesday by the state Senate, Comptroller Glenn Hegar would be authorized to establish and administer the state's first bullion depository at a site not yet determined. No other state has its own state bullion depository, officials said.
Sen. Lois Kolkhorst, R-Brenham, said the state and its agencies have more than $1 billion worth of gold that now is kept in secure facilities in other states. She said there is concern that fortune should be in Texas.
An official analysis of the bill explains: "The establishment of a Texas Bullion Depository would allow the state, state agencies, and private individuals to store precious metals utilizing a secure Texas-based depository to reduce reliance on out-of-state facilities and to insulate their assets from unstable market forces."
. . . .

"The state has gold, and several years ago (the University of Texas Investment Management Corp.) purchased just under a billion dollars worth of gold," she said. "Most of the bullion depositories are in New York -- there may be a small one in Delaware -- and they charge the state a fee to store each bar of gold."

Update 5-31-2015: Per this article in the Fort Worth Star Telegram, it appears that the Texas Legislature has passed the bill to set up this new depository in Texas.

News Note: The Greek Debt Repayment Schedule

When you read all the stories about the Greek debt situation, do you ever wonder exactly what that debt situation is? You can see it very clearly using this chart from the Wall Street Journal.

What jumps out right away is that if they can somehow find a way to get Greece through 2015, it could go several more years before facing another year with huge payments due. This is why it really does not make sense that some kind of agreement will not be reached. 

An agreement just to extend the terms on the debt due this year would buy a lot more time (probably at least 3 more years) and would cost everyone a lot less than if Greece actually defaults on an obligation. Not to mention all the derivatives that might get triggered if a default were to be declared and the risk of at least some contagion.

Even with all the negative news out about the situation right now, it seems more likely that something will be done to at least extend the debt due this year to once again kick the can down the road.. We will surely know by the end of June. 

Friday, May 29, 2015

Nomi Prins Warns About Increasing Market Volatility

Nomi Prins is apparently taking on a new role writing articles for Chris Martenson's Peak Prosperity site. This is a site dedicated to investors. In this new article, Nomi Prins explains why we are seeing increasing market volatility and why everyone should be on guard for what this means. She also gives a possible time frame for when all this volatility might lead to another big crisis (she says by mid 2016 is her guess). Below are a few key quotes from the article (also posted on her blog here) which talks about Four Factors Signaling Volatility Will Return.


"No one could have predicted the sheer scope of global monetary policy bolstering the private banking and trading system. Yet, here we were - ensconced in the seventh year of capital markets being buoyed by coordinated government and central bank strategies. It’s Keynesianism for Wall Street. The unprecedented nature of this international effort has provided an illusion of stability, albeit reliant on artificial stimulus to the private sector in the form of cheap money, tempered currency rates (except the dollar - so far) and multi-trillion dollar bond buying programs. It is the most expensive, blatant aid for major financial players ever conceived and executed. But the facade is fading. Even those sustaining this madness, like the IMF, are issuing warnings about increasing volatility."

. . . . .
"When cheap funds stop flowing, and “hot” money shifts its attentions, as it invariably and inevitably does, volatility escalates as it is doing now. This usually signals a downturn, but not before nail-biting ups and downs in the process.
These four risk factors individually, or collectively, drive rapid price fluctuations. Individually, they fuel market volatility. Concurrently, they can wreak far greater havoc:
  1. Central Bank Policies
  2. Credit Default Risk
  3. Geo-Political Maneuvering
  4. Financial Industry Manipulation And Crime
Events that in isolation don’t impact markets severely can coalesce with more negative results. This is important to understand when prioritizing personal investment decisions. In this two-part report, I will outline driving forces behind today’s volatility and provide suggestions as to what you can do to protect yourself, and even thrive, going forward."
. . .  .
"Subsidization for the elite banking class can’t last forever. But it has already overstayed its welcome many times over, so predicting a specific end date is not easy (though I’m going with mid-2016, when the ECB will be done with this round of bond-buying.) In the interim, rising volatility signals an unraveling of current polices that can’t be ignored."

Click here to read the full article

Added note 5-30-2015: Nomi Prins announces on her twitter page that she is invited to speak at an IMF/Fed/World Bank sponsored conference in June. We will cover anything she makes public here on the blog regarding this presentation.

Thursday, May 28, 2015

Geek Wars: Economists Fight Over Accuracy of Government Reporting

It seems that we can't be too sure about anything these days. When the 2015 first quarter GDP number was announced, it came in way below most economists forecasts including the Federal Reserve. This, of course, is somewhat embarrassing. Jim Rickards says it is not surprising. He claims these economists are using the wrong forecast models based on outdated assumptions which leads to the wrong forecast results. And it appears Jim is not alone in questioning the models economists use to make forecasts (click here for more on that).

Now it looks like some of those who keep missing the forecasts would like to blame inaccurate government reporting for the problem. This AP article talks about what I will call the "geek wars" now going on to assess blame for the poor forecasting results. Below are some quotes from the article.

"There's something strange about the U.S. economy in the first three months of every year: It frequently grows at a much slower pace than in the other nine months.

And on Friday, the government agency charged with calculating the economy's growth rate said it would adjust its methods in an effort to resolve the problem.

The changes could paint a much different picture of the economy's recent performance. Concerns flared when the government said late last month that the economy expanded just 0.2 percent at an annual rate in the first quarter. But many economists have challenged the government's data, and some have argued the first-quarter figure should be as high as 1.8 percent instead."

. . . . . . 

"Researchers at the Federal Reserve Bank of San Francisco argued that under a different method of adjustment, first-quarter growth this year would have been 1.8 percent, rather than 0.2 percent. The government seasonally adjusts components of gross domestic product, the broadest measure of the economy, before adding them together. The researchers argued that the final, aggregate data should also be adjusted.

Other economists, including at the Federal Reserve in Washington, have concluded that the government's figures are largely accurate. The first-quarter weakness over the years may be due to harsh winter weather and "statistical noise," they concluded."

"The Commerce Department's Bureau of Economic Analysis, which produces the figures, will have the last word. The agency says it "is working on a multi-pronged action plan to improve its estimates of gross domestic product." (see related link below *)

My added comments:

What can we take from all this? It looks like to me that we should pretty much take any numbers that are forecasted (and now even the actual calculated numbers) with a large grain of salt. It's pretty clear there are internal geek wars going on about the reliability of the information. May the best Geeks win.

Added notes: In case the above does not convince you to take things with a grain of salt, we have Fed Chairwoman Yellen admitting whatever forecast she puts out will be wrong. Here is that quote:

"I am describing the outlook that I see as most likely, but based on many years of making economic projections, I can assure you that any specific projection I write down will turn out to be wrong, perhaps markedly so."   ----  Janet Yellen

* We also have this article that appeared on David Stockman's site that questions whether the Bureau of Economic Analysis (BEA) is just trying to make a weak economy look better with its new "action plan to improve its estimates of gross domestic product".

Wednesday, May 27, 2015

Bloomberg: What Would Happen if Greece Does Not Pay the IMF?

This is about as good an update from Bloomberg as I have seen out there on Greece. It's in a Q&A format and covers the questions most of us would have. I have no idea what will happen in Greece. If the worst case scenario does happen, we will all need to monitor the situation for signs of contagion. If the debt gets rolled over again, nothing significant is likely to happen. It seems like we find out by the end of June or in July at the latest.

Below are a coupleof example Q&A's from the article to get a feel for it. 


Q: What will the IMF do?
A: A missed payment date starts the clock ticking. Two weeks after the initial due date and a cable from Washington urging immediate payment, the fund sends another cable stressing the “seriousness of the failure to meet obligations” and again urges prompt settlement. Two weeks after that, the managing director informs the Executive Board that an obligation is overdue. For Greece, that’s when the serious consequences kick in. These are known as cross-default and cross-acceleration.
Q: What are cross-default and cross-acceleration?
A: Failure to pay the IMF would entitle some of Greece’s other creditors, including the European bailout fund, to declare a default. They would then have the option to demand immediate repayment of all their loans, a process known as acceleration. Other lenders could then follow suit. While calling a default preserves creditors’ claims, acceleration -- the bit that hurts -- isn’t automatic. Each creditor decides on its own.
To varying degrees the debt is linked in a web of cross-default and cross-acceleration clauses that make it safe to assume that one default and acceleration would trigger demands for repayment on most, if not all, of the rest.

BRICSPOST: AIIB Members Meet to Discuss Share Holding

Members of the new China led AIIB (Asian Infrastructure Investment Bank) met recently to discuss how much of a stake the various members will own in the new bank. An article in the BRICSPOST lays out the details from the meeting. Below are a few quotes from the article, then a few comments.


"The $100 billion Asian Infrastructure Investment Bank’s 5th Chief Negotiators’ meeting has ended in Singapore on Friday.
Delegates and representatives from 57 countries which had joined the China-led Bank as founding members have discussed stake-holding, draft of articles and shares in the newly found lender.
China’s Ministry of Finance said on Friday the negotiators have reached agreement on the bank’s charter.
Preparation for establishment of the AIIB are gaining momentum as a succession of intensive talks are on the horizon.
With the signing of a charter slated for the end of June, the AIIB looks set to be launched by the end of the year.
AIIB on Wednesday held a three-day closed-door meeting in Singapore, co-chaired by China’s vice Minister of Finance Shi Yaobin and Singapore’s Deputy Secretary of the Ministry of Finance Yee Ping Yi.
A Reuters report on Friday quoted unnamed sources as saying China would hold 25-30 per cent of shares, India 10-15 per cent, Asian countries will own between 72-75 per cent of the bank’s shares."
. . . . . 
"China, with $4 trillion in foreign exchange reserves, is pushing for the growth of its own multilateral bodies, including the AIIB, the BRICS Bank and a bank for the Shanghai Cooperation Organization, but also seeking to strengthen its voice at the World Bank and the International Monetary Fund.
To reflect the growing and underrepresented influence of emerging economies, the IMF called for a 6 per cent shift in quota share to the emerging economies in 2010. However, the reform has been delayed for five years due to blocking by US Congress as the United States retains a veto.
“I can fully understand why some other countries are frustrated and impatient to see that reform implemented,” IMF chief Christine Lagarde said last month calling on the United States to ratify the quota reform plan."

My added comments:

No new surprises here. It was expected that China would own the largest interest in this new investment bank. Once again this article does not suggest that China or any BRICS nation intends to leave the IMF. Instead it says China is "seeking to strengthen its voice at the World Bank and the International Monetary Fund".

So far the US and Japan are still not members although China says they are welcome. Note also that the bank is not going to be ready to startup until the end of this year. We will know what the IMF decides on adding the Yuan to the SDR basket before then.

Added note: China Daily runs this article on the new AIIB. It does add that Japan is planning a $110 billion Asian infrastructure investment program of its own. It also says Japan is keeping open the possibility of joining the AIIB.

One other thought: When all this new infrastructure investment money starts getting spent, we will likely see a renewed strain on commodity supplies. This much building requires a lot of raw materials and energy. It should also boost industrial demand for silver. If you add up the BRICS Bank, the AIIB, and this new program from Japan you get well over $300 billion in available investment capital just for projects in Asia. That is on top of the World Bank and other existing sources of capital.

Tuesday, May 26, 2015

The Irresistable Rise of the Renminbi

This article appearing on Project Syndicate is one of the better ones I have seen on the future for the Yuan/Renminbi. The Korean author is a former executive for the Asian Development Bank (ADB) and also an economic adviser to the former President of South Korea. Below are some quotes from this excellent article and then a few added comments.


"By the end of this year, the International Monetary Fund will decide whether the Chinese renminbi will join the euro, the Japanese yen, the British pound, and the US dollar in the basket of currencies that determines the value of its international reserve asset, the Special Drawing Right (SDR). China is pushing hard for the renminbi’s inclusion. Should it be admitted?

The IMF created the SDR in 1969 to supplement existing reserve currencies, thereby providing the global financial system with additional liquidity. As it stands, the SDR’s role remains largely limited to IMF operations; its share in global financial markets and central banks’ international reserves is negligible. Nonetheless, adding the renminbi to the SDR basket would be symbolically important, implying recognition of China’s growing global stature. The renminbi is already a major currency for world trade and investment, and accounts for a growing share of international financial transactions and reserve holdings.

To qualify for inclusion, the Chinese government has eased its capital controls and liberalized its financial markets considerably. Inclusion in the SDR basket would require continuing this process, which, together with the renminbi’s emergence as a globally investable currency, would benefit the entire world economy."

. . . . 

"Even if China manages to mitigate such risks, unseating the US dollar as the dominant global currency will be no easy feat. Inertia favors currencies that are already in use internationally, and China lacks deep and liquid financial markets, an important precondition that any international reserve currency must meet. Furthermore, China’s banking system, which remains subject to extensive government control, lags far behind those of the US and Europe in terms of efficiency and transparency."

. . . . 

"History suggests that a shift in global currency dominance is likely to occur gradually. For now, China is focused on winning the renminbi’s inclusion, even with a small share, in the SDR currency basket."

My added comments:

Every time we see high ranking officials talk about this issue, we see some similar patterns show up. In this case we have a high level Korean official. I hi-lighted in bold type above the key points we see over and over again. Let's make a quick bullet point list:

- China very badly wants the Yuan added into the SDR currency basket (versus China intends to leave the IMF and back the Yuan with gold on its own)

- China wants this so badly that they are making many concessions to the US and EU to open up their system (does not sound like someone ready to abandon the IMF)

- China is not trying to overthrow the US dollar as primary global reserve currency any time soon (and in fact is not in a position to to that anyway)

- China sees the promotion of the Yuan/Renminbi as a very long term process that will take years or decades to unfold

I know that there are many respected analysts who believe that China has some kind of secret plan to suddenly overthrow the US dollar and the IMF/World Bank. I see this idea all over the internet. Recently (as we have reported here on the blog) there are articles suggesting that China has secretly amassed well over 10,000 tons of gold (some even say as much as 30,000 tons - see note below) with the intent to use this gold to take down the US dollar. Some see this happening as early as this year or certainly by next year.

I won't dismiss any theory at this point since there are many respected analysts who hold to this view to some degree. All I can say though at this time is that when you see these central bank and government officials talk about all this, they do not support that theory. They all talk about China being involved in a long term process to expand the influence of the Yuan within the present system (at the IMF using the SDR). They talk about this process taking many years with the earliest dates for significant change being around the year 2020. They talk about the process taking a decade or more. They do not talk about China using the gold they are buying to back the Yuan outside the present system on an actual gold standard.

There is no way I can possibly know what China will actually do. I don't think there is any way that anyone can know for sure what China will do except Chinese officials. In addition, they have their own problems to contend with with debt problems domestically and keeping growth going.

All any of us can do is follow events with an open mind. Until proven otherwise, the evidence I see is that what I have reported here on the blog agrees with what this Korean official is saying in this article. That being that China intends to work within the present system with the IMF and their plan is very long term. In addition. this view supports what Jim Rickards has said about China and its plans for its gold as well. For now the new BRICS bank and AIIB appear to be intended to complement the IMF and World Bank. They would also provide a kind of backup system if the present one failed in another big crisis.

If the situation changes, we will cover it here. For now, I take the statements of all these officials in charge at face value and assume they represent the true situation in regards to what China wants to do. Anything else is speculation as best I can tell.

Update note: Respected Chinese gold analyst Koos Jansen is challenging the credibility of  the source of the recent media reports about China perhaps owning 30,000 tons of gold. You can read his article by clicking here.

Monday, May 25, 2015

The Cashless Society Debate

As technology moves forward it enables the opportunity to do things in new ways. The arrival of digital currency and the ability to use digital currency on mobile phones is a clear example where technology is changing the way people access and use their money.

Along with this change will come the inevitable debate on whether the change is good or bad. Some will see the change as a great thing that makes it easier for more people to use and access money anywhere in the world. Others will see efforts to move towards a "cashless" society as a potential attack on personal freedom and property rights. Let's explore it .
For this discussion we will use two recent articles that relate to this topic. Below is a link to each article with a few quotes from each article just below its link. Aftter that are a few added comments.

Russia Today:  Cashless Denmark: Should Total e-Commerce Be Embraced?

"With Denmark moving towards a completely cash-free economy there has been a heated debate between the experts who think it’s a natural thing caused by technological development and those who warn that total traceability has a dark side.
The Danish government has proposed that certain businesses such as petrol stations, restaurants and clothes retailers should no longer be legally required to accept cash. Moreover, a third of the Danish population already uses a mobile payment app when making transactions."

"Forcing everyone to spend only by electronic means from an account held at a government-run bank would give the authorities far better tools to deal with recessions and economic booms, writes Jim Leaviss."

"A proposed new law in Denmark could be the first step towards an economic revolution that sees physical currencies and normal bank accounts abolished and gives governments futuristic new tools to fight the cycle of “boom and bust”.
The Danish proposal sounds innocuous enough on the surface – it would simply allow shops to refuse payments in cash and insist that customers use contactless debit cards or some other means of electronic payment.
Officially, the aim is to ease “administrative and financial burdens”, such as the cost of hiring a security service to send cash to the bank, and is part of a programme of reforms aimed at boosting growth – there is evidence that high cash usage in an economy acts as a drag.
But the move could be a key moment in the advent of “cashless societies”. And once all money exists only in bank accounts – monitored, or even directly controlled by the government – the authorities will be able to encourage us to spend more when the economy slows, or spend less when it is overheating."
. . . .
"In this futuristic world, all payments are made by contactless card, mobile phone apps or other electronic means, while notes and coins are abolished. Your current account will no longer be held with a bank, but with the government or the central bank. Banks still exist, and still lend money, but they get their funds from the central bank, not from depositors.
Having everyone’s account at a single, central institution allows the authorities to either encourage or discourage people to spend. To boost spending, the bank imposes a negative interest rate on the money in everyone’s account – in effect, a tax on saving."
My added comments:
In these two articles we see why this topic is likely to generate heated debate. One article simply explains that the Danish government is putting forward a proposal "that certain businesses such as petrol stations, restaruants, and clothes retailers should no longer be legally required to accept cash."
That sounds innocent enough and by itself would probably not generate much debate. 
But notice the second UK Telegraph article where the author jumps on this proposal to promote the outright banning of the use of cash. That would be controversial enough, but the author is only getting started. He goes on to recommend that private bank accounts should be abolished and people only allowed to have accounts at government controlled banks or the national central bank. And that's not all. He says doing this would allow "the authorities to encourage us to spend more when the economy slows, or spend less when it is overheating." And if you want to try and save your money at a time when the authorities want you to spend your money, he advocates that "the bank imposes a negative (interest) rate on the money in everyone's account -- in effect, a tax on saving."
This second article is where you see people start getting upset about an attack on personal freedom and property rights. It's all about who gets to decide how and when your money is used or saved. Since the western hemisphere is founded on the idea of personal property rights and protection of individual human rights, it should not surprising to see the comments posted at the bottom of this UK Telegraph article
I am not sure I have ever seen a series of comments so one sided in opposition to the author's article ever. As I write this I there are over 3,000 comments on this article almost all in opposition to this idea. Many are in angry opposition.
Normally I avoid stating my own opinion as much possible since this blog is devoted to the presentation of relevant news and the opinions of experts. In this case, this seems very simple. It seems to me that anything forced on people by law that restricts their access to their own personal property and/or allows the arbitrary confiscation of it without due process of law is a very bad idea. The way to attract public support is to simply provide the free choice to people to use or not use the new technology. Then make the product so compelling and helpful to the consumer that he will choose to use it because it's the better option. The consumer will want to choose it. That is how a competitive free market works. 
There is no logical reason to force people by law into a "cash only" system completely controlled by the government. It will be bitterly hated by the overwhelming majority of the population and will eventually fail as totalitarian style efforts in history have shown repeatedly. People want to have the freedom to choose to do as they please with their personal property. If presented to the public in the proper way (as an option people are free to accept or reject) the new digital cashless technology has great potential. If forced on people by law with no ability to choose, it is destined for disaster in my view. I think we will see the free choice option prevail because restricting access to people's own money would lead to massive loss of confidence in the present system. It would lead to the unintended consequence of people moving their money out of the system as quickly as possible.

News Note from a Reader - Bitgold and GoldMoney Merge

A reader here sent me this news note. Below are his comments on what this merger means for those who have interest in holding gold as part of their portfolio. One note, this is not the asset backed digital currency that  I have talked about before here on the blog. 

It appears this would allow people to own gold and then use the balance in their gold account to do normal business transactions with a regular credit card or ATM card along with apps for mobile use as well. We will keep an eye out for more news on BitGold as this could be a digital currency that breaks some new ground for those who want to hedge their local currency but still have access to liquid funds.

Reader comment:

Thought this might interest you.  GoldMoney bought BitGold.  This creates an international gold backed banking account with the ability to use a credit card in the traditional system, use ATM, and transfer money in any currency. Its also integrated with ApplePay. 

Below is the news announcement from Gold Money

GoldMoney Logo
BitGold and GoldMoney Join Forces
0.01% Fee All Weekend
Dear GoldMoney customer,

Today, we announced the acquisition and merger of GoldMoney Network Limited with BitGold Inc. forming the world's largest and oldest bullion money service with over 60,000 active customers and $1.5 billion in assets under management. BitGold Inc. is a publicly traded company on the Toronto Stock Exchange Venture under the symbol (XAU).

GoldMoney's existing board members, founder James Turk, Geoff Turk, Mahendra Naik, and Hector Fleming will also be joining the listed company's board.
What you can expect as a GoldMoney customer?
Over the next few months, you will begin to experience a wide range of features and service improvements including:
  1. Reduced fees on dealing;
  2. A plastic debit card allowing to spend your gold balance at any traditional point of sale, where credit/debit cards are accepted or to withdraw local currency from any traditional ATM;
  3. The world's first 24 KT gold plated debit card for customers with over $100,000 in their Holding;
  4. A mobile application for iPhone, Android and Blackberry, allowing full dealing and payments capabilities (Apple Pay integrated);
  5. An enhanced customer experience with updated payment methods (fund your account with credit card, ACH or SEPA);
  6. Free global payments (for non-US resident customers);
  7. Physical redemption in as little as 10 gram increments (GoldMoney Cubes);
  8. Multilingual website in 12 languages
We will be making all these enhancements while never compromising the integrity and security that you have grown accustomed to. Everything you have loved about GoldMoney will continue to exist.

The combination brings a tremendous amount of access to capital, building a more solid financial base than ever, as well as the integrity, transparency, and reputation value of being a publicly traded entity.

added note: Some readers informed me that it appears based on item #6 above that US customers may not have the "free global payments" feature available (at least initially).

Here is a comment from one reader on that:

 "As a customer of Goldmoney I believe this merger with Bitgold has the potential to become a match made in heaven. It fulfills the founders wishes to make gold a liquid form of money. Unfortunately the information sheet indicates this will not initially be available to US citizens. Hopefully that issue will be resolved shortly.

 My concern is on the financial tracking system. Will the software be technically able to asses the capital gain/ loss on every credit card transaction for every customer? If not, the clients annual Federal income tax calculations will far exceed what is already an onerous paper nightmare."

Jim Rickards Latest Webinar Podcast

Below is a list of the topics covered

The Gold Chronicles: May 18 , 2015 Interview with Jim Rickards

Jim Rickards, Gold Chronicles May 18th, 2015
*War on Cash
*Cashless society sets world up for negative interest rates
*Herding people into banks and digital wealth
*Daily limits on cash withdrawals
*Impose negative interest rates on deposits
*Potential freeze on bank accounts in the event of emergency
*Trans-pacific Partnership (TPP) and currency manipulation
*Currency Wars – not all currencies can be weak at the same time, they take turns
*If you are at a table with four or five people and you don’t know who the sucker is, you are the sucker, this applies to currency devaluation as well
*Spike in German gold purchasing
*Gold in Euro has skyrocketed, it is perfectly sensible
*Europe already has negative interest rates
*Add in geo-political risk, gold makes a lot of sense
*It is almost impossible for the Fed to raise rates without a bloodbath in markets
*As people discover the Fed can’t raise rates, it should be good for gold
*Peak gold
*Jim’s view on best economics schools to attend
*Proper gold allocation in a portfolio
*Can Central Banks perpetually hold up stock markets by continual money printing
*ZIRP is taking money out of the pocket of savers and giving it to big banks
*The Fed is in effect forcing people into the stock market if you want returns
*There will come a time when the magnitude of the crisis will be bigger than Central Banks can create liquidity for