While the "developed world" is only now starting its aggressive push
to slowly at first, then very fast ban the use of physical cash as the
key gating factor to the global adoption of NIRP (by first eliminating
high-denomination bills because they "aid terrorism and spread
criminality") one country has long been doing everything in its power to
ween its population away from tax-evasive cash as a medium of payment,
and into digital transactions: Greece.
The problem, however, is that it has failed.
According to
Kathimerini, "
Greek
businesses are not ready for the expansion of plastic money through the
compulsory use of credit and debit cards for everyday transactions."
Unlike in the rest of the world where "the stick" approach will
likely to be used, in Greece the government has been more gentle by
adopting a "carrot" strategy (for now) when it comes to migrating from
cash to digital.
The government has told taxpayers that they
will have to spend up to a certain amount of their incomes via bank and
card transactions in order to qualify for an annual tax-free exemption.
This appears to not be a sufficient incentive however, as a large
proportion of stores still don’t have the card terminals, or PoS (Points
of Sale), required for card payments, while plastic is accepted by very
few doctors, plumbers, electricians, lawyers and others who tend to
account for the lion’s share of tax evasion recorded in the country.
Almost as if the local population realizes that what the government
is trying to do is to limit at first, then ultimately ban all cash
transactions in the twice recently defaulted nation as well. It also
realizes that an annual tax-free exemption means still paying taxes;
taxes which could be avoided if one only transacted with cash.
For the government this is bad news, as the lack of tracking of every
transaction means that the local population will pay far less taxes: a
recent study by the Foundation for Economic and Industrial Research
(IOBE) showed that increasing the use of cards for everyday
transactions could increase state revenues by anything between 700
million and 1.6 billion euros per year, and that the market’s poor
preparation means that the tax burden has been passed on to lawful
taxpayers. As a reminder, in Greece, the term "lawful taxpayers" is not
quite the same as in most other countries.
What is more surprising is that according to data seen by
Kathimerini, PoS terminals in Greece amount to just 220,000, and that
despite the fact these were effectively forced on enterprises with the
imposition of the capital controls, an estimated half of all businesses do not have card terminals.
Almost as if the Greeks would rather maintain capital controls than
be forced into a digital currency by their Brussles overlords.
According to Finance Ministry calculations , the number of terminals
the market requires for a satisfactory geographical coverage in the
basic categories of small enterprises and of the self-employed to
450,000-500,000, which appears impossible for 2016.
As for consumers, the increase in the number of debit cards after the
government imposed the capital controls has brought their total to 1.7
million across Greece.
And yet, despite the aggressive push to force everyone out of
physical cash and into digital money, the experiment has so far failed.
How long until the IMF, Troika, or Quadriga or whatever it is called
these days, uses Greece as the Guniea Pig for the next monetary
experiment, and "advises" the Syriza government that if it wants the
bailout money to flow, it will have to do away with all physical cash
within its borders. A successful implementation, first in Greece, would
then mean that the global decashification process can continue in other western nations.
http://www.zerohedge.com/news/2016-02-21/greek-attempt-force-use-electronic-money-instead-physical-cash-fails
 |
| Capital Control by gun, taxation, imprisonment |
The European Central Bank has shed some more light on its operations
in 2015, the year wherein it decided to forget about the free market
economy as the bank has become one of the main market participants now.
The Central Bank’s net income from the asset purchase program
increased from 2M EUR to 161M EUR, and the asset purchase program was
responsible for the
9.4% increase in the net profit of the bank. Indeed, the ECB has made a very handsome profit of almost
1.1 billion Euro, which was distributed amongst the national central banks in the Eurosystem.
 |
| Removing any outs from a beast controlled digital system, take your cash. |
Source: ECB
What’s more important is the fact the size of the balance sheet of
the ECB is increasing again. At a very fast pace! The total value of the
balance sheet of the Eurosystem was 2.8T EUR as of at the end of 2015
(which is approximately $3.1 trillion). That’s a substantial increase
compared to just 2.4 trillion last year, and there are no signs of
seeing the expansion of the balance sheet slowing down as not only will
the ECB continue its asset purchases, it’s even considering to expand
its monetary easing program by stimulating the markets even more.
At the same time, the war on cash has started, and several officials
and market participants have claimed the bank notes of 500 EUR (and even
200 EUR) should be banned, whilst for instance in the USA,
Larry Summers wants
to get rid of the $100 dollar bill. It’s understandable the governments
are getting nervous about the force of people drawing down cash and
hoarding their cash (and other assets) outside of the traditional
banking system. Perhaps the next chart explains everything in just one
powerful image.
 |
| Too many withdrawals by people who can read the writing on the wall |
Source: yardeni.com
The total amount of bank notes has increased by 57% since the end of
the global financial crisis, and this really is an indication the
European citizens still don’t trust financial institutions with their
assets. It’s truly remarkable to see such a sharp (and steady!) increase
of the total amount of bank notes in circulation and it’s totally
understandable why this makes the monetary powers ‘nervous’.

Source: Santander presentation
On top of that, the situation in for instance Portugal seems to be
deteriorating once again. The country has been trying to convince the
European Commission and the ECB it knows what it’s doing and that it has
a plan to get the country back on the right track, but apparently
that’s not what the ECB-team saw in Lisbon. The mainstream media seems
to have fully ignored this report, but we feel this could be an
important problem as it seems to be just a matter of time before
Portugal will need a new bail-out.
While the authorities have committed to comply with European
budgetary rules, the effort to reduce the underlying structural budget
deficit needs to be significantly increased. […]The adjustment in the
underlying structural deficit in 2016 reflects an insufficient
consolidation effort. […]Banks continue to consolidate their balance
sheets, albeit at a slower pace than previously observed, and have seen
minor improvements in profitability. […]high levels of non-performing
exposures continue to weigh negatively on profitability and capital.
This doesn’t really make us feel comfortable at all, and as the
European economy still isn’t improving, Portugal might have to beg the
institutions for more cash.
http://www.zerohedge.com/news/2016-02-21/while-ecb-starts-war-cash-european-citizens-start-hoarding