“Funny money is getting funnier and funnier. Our challenge is to figure out who’s the butt of the joke.”
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“India is still reeling from Prime Minister Narendra Modi’s shock decision nearly three weeks ago to pull 86 percent of the currency from circulation overnight, triggering a chronic shortage of cash. Many have been left without enough cash to buy food or daily essentials, while farmers have been unable to buy seeds and small traders say business has fallen off a cliff. Nonetheless Modi has repeatedly defended the scheme, accusing its detractors of being tax evaders and urging all Indians to switch to non-cash payment methods.”
http://www.aljazeera.com/news/2016/11/tens-thousands-protest-india-cash-ban-161128140259051.html
To combat Indian savers’ attachment to cash and distrust of banks, Soumya Kanti Ghosh, the group chief economic adviser of the State Bank of India (SBI), the largest bank in the country, proposed that the government should ‘surprise’ Indians with cash bans on an ongoing basis, so as to discourage people from holding cash.
The effect of the present Indian demonetization effort has been chaos, with at least 47 Indians reported dead in the aftermath due to queueing at banks and other factors.
Earlier this year, Harvard professor Kenneth Rogoff had demanded a ban on US $20 and higher denomination bills, while insider Larry Summers had recommended banning the $100 bill.
If these academics have their way, government-backed paper money will further approach its intrinsic value – zero. They hope that this will drive cash-based savings into bank deposits, which generate fee revenue and a source of leverage for the banks while at the same time supplying governments with taxes and police oversight of citizens’ financial lives. However, governments attempting to eliminate cash usage risk destroying trust in the ‘coin of the realm’, leading to cash-based savings being moved into assets such as real estate, precious metals, and cryptocurrencies instead of bank deposits.
But the ubiquity of cash clearly persists, even in the US:
Tends of thousands of desperate refugees from Guatemala, El Salvador, and Honduras are pressured by ‘coyotes’ to fast-forward their plans so as to reach the US before Trump’s inauguration:
Since Trump’s victory, the number of people flocking north has surged, Central American officials say, contributing to a growing logjam along the southern U.S. border.
“We’re worried because we’re seeing a rise in the flow of migrants leaving the country, who have been urged to leave by coyotes telling them that they have to reach the United States before Trump takes office,” Maria Andrea Matamoros, Honduras’ deputy foreign minister, told Reuters, referring to people smugglers.
Carlos Raul Morales, Guatemala’s foreign minister, told Reuters people were also leaving Guatemala en masse before Trump becomes president.
“The coyotes are leaving people in debt, and taking their property as payment for the journey,” he said in an interview.
Last week, U.S. Customs and Border Protection opened a temporary holding facility for up to 500 people near the Texan border with Mexico, in what it said was a response to a marked uptick in illegal border crossings.
U.S. Department of Homeland Security Secretary Jeh Johnson said earlier this month immigration detention facilities were holding about 10,000 more individuals than usual, after a spike in October of migrants including unaccompanied children, families and asylum seekers.
And Trump’s nominee for Attorney General, Jeff Sessions, is an opponent of the H1-B work visa program, leaving tech companies worried about a brain drain:
Sessions, however, has long sought to curtail the program and introduced legislation last year aiming to make the visas less available to large outsourcing companies such as Infosys. Such firms, by far the largest users of H-1B visas, provide foreign contractors to U.S. companies looking to slash information technology costs.
“Thousands of U.S. workers are being replaced by foreign labor,” Sessions said at a February hearing.
[..]
Sessions last year urged then-Attorney General Eric Holder to investigate Southern California Edison’s use of H-1B visas in a letter than was also signed by Democratic Sens. Bernie Sanders, Richard Durbin and Sherrod Brown.
“Eight days into demonetisation, the death toll has reached 47. These are confirmed deaths reported in the national media. The number of unreported deaths may be higher. While most deaths are of the elderly waiting in long bank queues, there are quite a few suicides, especially of housewives.”
http://www.huffingtonpost.in/2016/11/16/day-8-demonetisation-death-toll-rises-to-47/
“Donald Trump’s election has likely given a massive lifeline to Deutsche Bank, the German financial firm that has been rocked recently by rumors that they would have to pay a $14 billion fine to the Justice Department over crisis-related mortgage abuses. That money is unlikely to ever be imposed, now that one of Deutsche Bank’s biggest borrowers – Trump – will soon be sitting in the White House.”
“Bitfinex was previously fined $75,000 by the CFTC for failing to register as an appropriate entity for the services it offered as well as: ‘[F]or offering illegal off-exchange financed retail commodity transactions in bitcoin and other cryptocurrencies.’ These ‘off-exchange’ transactions could be alluding to the storage of funds offline — commonly known as cold storage — one of the best ways to keep your funds out of hackers’ reach. If this is indeed the case then the incident could undermine calls for more regulation as cryptocurrency exchanges face a dilemma between security and compliance.”
https://news.bitcoin.com/bitfinex-us-regulation-cold-storage/
“Germany’s Handelsblatt writes that ‘shipping loans have brought Bremer LB into distress and the bank can not survive without government help, but a direct capital injection from Lower Saxony now looks unlikely.’ The punchline, and where the narrative veers dramatically from the smooth sailing scenario presented last month by the FT, is that according to Lower Saxony President Stephen Weil, a capital increase by his state and Bremen for the ailing bank is currently not realistic. ‘The classic method, namely when partners provide the necessary capital, does not seem to work,’ the Prime Minister said to the ‘Weser-Kurier’.”
“Scotland’s first minister has said a second independence referendum is “highly likely” after the UK voted to leave the EU. Nicola Sturgeon said it was ‘democratically unacceptable’ that Scotland faced the prospect of being taken out of the EU against its will. She said the Scottish government would begin preparing legislation to enable another independence vote. Scotland voted in favour of the UK staying in the EU by 62% to 38%. The UK as a whole has voted to leave, by a margin of 52% to 48%, prompting UK Prime Minister David Cameron to announce he would stand down by October.”
http://www.bbc.com/news/uk-scotland-scotland-politics-36621030
“A few days ago, the European Commission released details of a tax directive that will create a pan-European tax system, complete with a brand new Tax ID number for all the good citizens of Europe. The proposal also aims to increase taxes across the board if they feel that a member state (like Ireland) doesn’t charge enough tax. According to the proposal, other European countries like Ireland and Estonia ‘distort competition by granting favourable tax arrangements.’ The directive goes on to demand more onerous reporting, attack anyone who takes legal steps to reduce what they owe, and even threaten businesses with exit taxes if they try to leave Europe.”
https://www.sovereignman.com/trends/introducing-europes-frightening-new-tax-directive-19595/