Expert Says “Banning Cash” The Only Solution to Negative Interest Market Problems

Mac Slavo

As everyone knows by now, the Federal Reserve’s main tool in economic warfare has become hyper low interest rates and, thus, extremely cheap money for large institutions vis-à-vis the controversial reign of QE – quantitative easing.

Now, the how-low-can-you-go climate has created negative interest rates, meaning not only that many investments carry no return but that many deposits cost money.

Well-known Citigroup economist William Buiter says the solution to this backwards market is to rein in the appeal of normal currencies like cash – because it is “causing problems” for central bank manipulation:

They Are Slowly Making Cash Illegal

Michael Snyder

The move to a cashless society won’t happen overnight.  Instead, it is being implemented very slowly and systematically in a series of incremental steps.

All over the planet, for security reasons, governments are starting to place restrictions on the use of cash.  As citizens, we are being told that this is being done to thwart criminals, terrorists, drug runners, money launderers and tax evaders.  Other forms of payment are much easier for governments to track, and so they very much prefer them.  But we are rapidly getting to the point where the use of cash is considered to be a “suspicious activity” all by itself.

These days, if you pay a hotel bill with cash or if you pay for several hundred dollars worth of goods at a store with cash you are probably going to get looked at funny.  You see, the truth is that we have already been trained to regard the use of large amounts of cash to be unusual.  The next step will be to formally ban large cash transactions like France and other countries in Europe are already doing. 

Minnesota Republicans want to outlaw cash-carrying poor people

Fight Back News

St. Paul, MN – Minnesota Republicans are pushing legislation that would make it a crime for people on public assistance to have more $20 in cash in their pockets any given month. This represents a change from their initial proposal, which banned them from having any money at all.

On March 15, Angel Buechner of the Welfare Rights Committee testified in front of the House Health and Human Services Reform Committee on House File 171. Buechner told committee members, “We would like to address the provision that makes it illegal for MFIP [one of Minnesota’s welfare programs] families to withdraw cash from the cash portion of the MFIP grant - and in fact, appears to make it illegal for MFIP families to have any type of money at all in their pockets. How do you expect people to take care of business like paying bills such as lights, gas, water, trash and phone?”

House File 171 would make it so that families on MFIP - and disabled single adults on General Assistance and Minnesota Supplemental Aid - could not have their cash grants in cash or put into a checking account. Rather, they could only use a state-issued debit card at special terminals in certain businesses that are set up to accept the card.

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New Rules: You And The IRS This Januar

Dees Illustration

David Nguyen
Activist Post

The new ObamaCare1099 rule for reporting of all cash, credit and check business transactions of $600 or more is scheduled to begin January of 2012.  This is really an extension of the 2008 Housing and Recovery Act IRS rules that start this January when merchant banks and PayPal will report business sales directly to the IRS (the reporting threshold is $20,000 and 200 transactions a year).

These new IRS rules will affect every American:

• Income tax collection could rise as much as $345 billion a year
• Small businesses will be crushed and unemployment will rise
• A cashless economy is further set in motion
• IRS snooping and audits will increase
• Gold can be tracked
• Identity theft is a risk
• Government surveillance will increase

THE TAX GAP

ObamaCare requires that businesses and self-employed individuals submit 1099 forms to the IRS for all business purchases of $600 or more.  The stated purpose for this is to close the 'tax gap' which is the difference between the amount of what is "owed" and what is paid, due to lack of reporting and under-reporting, and is estimated at $300 billion dollars a year.  Last week, the Senate failed to repeal the ObamaCare 1099 rule because they could not agree on how to make up the "lost" revenue that would be generated from strict reporting, which they estimated to be $19 billion over 10 years, which is a GROSS underestimate.


A document from the Senate Committee on Finance in 2009 states that the intention is to close the tax gap (estimated at $345 billion here).  If the IRS is 100% successful, they will collect $345 billion a year in extra tax money.

The key issues are under-reporting and non-reporting, so the government's remedy is to require voluminous detailed record keeping and reporting by businesses and private contractors.  They want to monitor how much each business brings in and how much they spend, almost down to the penny (or $600 anyway).

According to the Senate document, the IRS targets businesses with assets under $10 million for the 1099-MISC forms, as they found that only 8% of them file the forms. The IRS expects the so-called "voluntary" income reporting rate to jump from the current 46% to 95%. This means that the IRS aims to collect $345 billion a year by requiring mountains of detailed paperwork from businesses and independent freelancers.  Individual filers are also targeted by the IRS. Traditionally, the IRS 1099-MISC form has been used primarily to report independent contractor income (a service), but it now includes the sales of goods totaling $600 or more in course of business.

The purchaser or buyer is responsible for issuing 1099 forms for all business transactions. However, this rule applies only to business exchanges, so individuals will be spared from collecting 1099 forms from grocery stores, for example, if the purchases are for personal use and outside of business.

The new measure is reported to have been waiting in the wings for the right opportunity and now that it is law, and with so much money on the line, it will be almost impossible to repeal.  Even if it was repealed, the Housing Recovery Act, a companion to ObamaCare tax laws, goes into effect January 2011.

THE HOUSING AND ECONOMIC RECOVERY ACT OF 2008 (HR 3221)

Originally, the 2008 Housing Act required merchant banks and third party processors to report volume business sales of $600 or more to the IRS, but PayPal pressured Congress into raising the reporting threshold to 200 credit transactions and payments over $20,000 a year. Any business that uses a merchant bank account or third party network like PayPal with 200 credit transactions and sales of $20,000 or more needs to keep meticulous records because their financial data will be sent directly to the IRS. This begins January 2011.

This new provision will allow the IRS to supervise credit and debit payment streams that were formerly difficult to track.  In the past, the IRS needed a subpoena from a judge to get information from merchant accounts.  Now the IRS can spy on merchant accounts and audit without notice.  Further, the IRS can guesstimate cash sales based on credit sales and compare those to similar businesses. If the IRS deems the cash sales as being too low, it could trigger an IRS inquiry or audit.

Because merchant banks and third party processors will send data directly to the IRS, they will have access to information not only on the sellers, but also the BUYERS!  The volume aggregate sales will be sent directly to the IRS, but records of individual sales will be stored as back up data so the IRS may have access to individual buyer information.

Taxation is a function of government, but now banks and third party processors are part of the equation. Identity theft is a risk for self employed individuals and small businesses that use their Social Security numbers as Tax ID numbers with the new bank tracking system.

OBAMACARE AND THE DEATH OF CASH

Close to 60% of Americans oppose ObamaCare and the new 1099 reporting is a way to offset the cost.  While the IRS contends that this is not a new tax, it can be argued that it is new because of the 1099 reporting now includes of sales of goods.  Even if some States, businesses and individuals reject ObamaCare and want to opt-out, the taxpayer is still stuck paying the bill.

The IRS is the enforcer of ObamaCare. The IRS has the power steal money from bank accounts, garnish wages, put people in jail and some IRS agents carry guns.

ObamaCare reinstates the original $600 credit sales reporting rules of the 2008 Housing Bill and massively expands it by mandating that EVERY business transaction of $600 or more, whether it is cash, check, credit, or any other thing used for payment, to be reported to the IRS with 1099 forms.

For example, if a freelancer buys more than $600 dollars worth of office supplies over the course of a year from Staples, the individual will be required to 1099 Staples and to collect their Tax ID Number.

Additionally, small businesses and self-employed individuals will receive a 1099 form from each business that they sold over $600 worth of goods or services and will have to supply their Tax ID or Social Security Number to the purchaser.

Doug Shulman, IRS Commissioner, said that credit card and debit card purchases will be exempt from reporting with the 1099 forms because payment processors will already be reporting the transactions to the IRS. Under the guise of eliminating the burden of paperwork for small businesses and independents, this is really a step toward a cashless economy because people will want to avoid the extra paperwork and will embrace electronic transactions.

PayPal stands to benefit tremendously from a cashless economy and increased use.

Imagine a cashless economy where the banks are in charge of access to your money.  Recently, the National Australia Bank's had a computer glitch that left millions of people unable to get their own money.  Do the bankers really need any more power?

Cost of ruining small business.........$600
Cost of government stupidity.........Trillions
Dreams of the American people waking up and taking action..............Priceless
For everything else, there's MasterCard

GOLD AND SILVER

Gold and other precious metals will also be subject to the new rules, enabling the IRS to track gold ownership. Currently, gold is easy to transfer without tax because its value is intrinsic, or contained within the item itself.

According to the ObamaCare mandate, when precious metal dealers buy jewelry, coins or bullion from businesses or individuals they will be required to submit a 1099 form with Tax ID numbers or Social Security numbers from the sellers, which includes private individuals.

IRS EXPANSION

The government has expanded the power of the IRS in order to collect revenue that could be as high as $345 billion in taxes a year. The IRS is expected to add 16,500 new auditors, examiners and support staff. In 2009, the IRS employed over 93,000 people which includes 50,000 employees that work in the IRS examination, collection and investigation fields. The IRS spent only 50 cents for every $100 it collected.

In 2009, about 150 million income tax returns were filed and over 70 million people, or 42%, owed no income tax due to tax credits, deductions and exemptions, which are forms of welfare.

It is estimated that up to 30 million people do not file income tax returns at all. About 10 million of these people have paper trails following them because they receive W-2 or 1099 forms. The other 20 million deal in cash, have no records for wages or pensions or are affluent non-filers. However, failure to file a tax return can be like playing Russian roulette; while the current IRS audit rate is only about 1%, that number will increase with the addition of the 16,500 new agents.

WHO PAYS TAXES?

According to "The Great American Tax Dodge", the IRS is far more apt to go after middle-income non-filers and does not fully investigate affluent non-filers. The IRS uses the lame excuse that the rich may under-state the taxes owed and that the IRS would prefer nothing over under-stated taxes. It is more likely that the IRS avoids investigating the rich because they have resources to oppose the IRS.  The IRS is more apt to harass middle income earners who pay fines easily without a fight.

In 2009, small businesses employed half (60 million) of private sector non-agricultural workers; 15.5 million of those were self employed individuals. The IRS collected $1.36 TRILLION from individuals and $395 billion from corporations in 2007.

Most large American corporations like GE, Exxon, Google, MicroSoft and Berkshire Hathaway that have international operations pay very little or no taxes at all. This is accomplished by routing money through foreign countries with different tax laws and other loopholes.

While this may anger people, it is important to remember that corporations pass taxation costs on to the consumer, so the people buying the products bankroll corporate taxes.

CONCLUSIONS:

The left/right paradigm is an illusion: Bush's Housing Bill of 2008 and ObamaCare are companions.  It is worth noting that both parties work together to accomplish the same agenda.  In this case, it is total financial control, pressuring the middle class for hundreds of billions of dollars more in taxes and moving toward an electronic-based economy that shuns cash.  This is a very important point because people must give up this illusion in order to elect Constitutional leaders.

Many struggling small businesses will be crushed underneath the pressure of painstaking record-keeping, productivity loss and increased taxes. Failure of small businesses will create more unemployment. More unemployment will result in more welfare and reliance on the government. The government will then want more tax money.

The best way to cut the Gordian Knot is a clean sweep of these complicated and unfair laws.

SOLUTIONS:

Right now, individuals have the choice to protect their assets and privacy by turning away from credit and debit cards and trading in cash, precious metals and barter.  This would also bolster local economies.

The simplest way to get rid of ObamaCare is to forgo the lengthy repeal and litigation processes. The States can nullify this new law even before it goes into effect. If enough States nullify ObamaCare, it becomes invalid.

The 10th Amendment Center has written nullification legislation to get rid of ObamaCare.

The Corporate Excise Tax of 1909 is a separate animal from the 16th Amendment income tax established in 1913.  The cleanest way to eliminate IRS tyranny is for the States to nullify the 16th Amendment because it opposes the Constitution- it is a direct tax that fails uniform application.

The most accessible power lies with the States, so it is crucial to support Constitutional leaders who will apply the Tenth Amendment.


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Will the Dollar Rebound Before Being Dissolved Into Global Currency?

Eric Blair

Activist Post

Every time the dollar begins to decline, I wonder, "Is this it, is this the end to the fiat dollar?"  The fundamentals suggest that it should be finished, but just as the world is about to declare it dead, miraculously a global storyline seems to emerge just when needed and foreign investors rush back in for "safety."  A clear example was the steady drumbeat of a sovereign-foreign-debt war that resulted in reports of whether the Euro would even survive, while the dollar enjoyed a triumphant ride up victory mountain.

Since the "world" declared the Euro debt crisis saved, the focus has shifted to exposing America's deficit problems, which has led to the dollar collapsing to its 5-month low against the Euro. There seems to be a growing realization by foreign countries that a volatile dollar as the world's reserve currency is unhealthy for their nations and the global economy as a whole -- especially as it pertains to vital commodities like oil and food.  This increased awareness is causing foreign governments to invest more in other currencies, gold, and even vast stretches of agricultural land -- while beginning to advocate for a more stable global reserve currency.

Some are defining this volatility as all out "international currency wars." The Telegraph reported on Brazil's fears of a currency war:

Brazil's finance minister Guido Mantega has complained repeatedly over the past month that his country is facing a 'currency war' as funds flood the local bond market to take advantage of yields of 11pc, vastly higher than anything on offer in the West.

'We're in the midst of an international currency war. This threatens us because it takes away our competitiveness. Advanced countries are seeking to devalue their currencies,' he said, pointing the finger at America, Europe and Japan. He is mulling moves to tax short-term debt investments.

There seems to be little hope for the dollar rebounding as the Fed's quantitative easing not only continues, but must increase dramatically to make up ground from lost investors and higher deficits.  Can anything reverse the trend and boost the dollar once again? Perhaps the powers-that-be don't want the dollar to re-strengthen, as indicated by Stephen Lewis from Monument Securities in theTelegraph article, where he said: "The Fed is playing a risky game toying with more QE. There are already signs of investor flight into commodities. The danger is a repeat of the spike in 2008, which was a contributory cause of the Great Recession. Further QE at this point may prove self-defeating."

If history is any indicator, the only thing that may temporarily strengthen the dollar is another manufactured disaster, or global uncertainty, which may entice investors back to U.S. Treasury bonds because they're still widely considered the "safe haven" investment during a crisis. The U.S. is still viewed as the world super power and most innovative economy despite its current economic woes and insurmountable debts.  Therefore, during times of international crisis or collective doubt, the big institution investors tend to flock to the dollar, apparently under the assumption that America is best equipped to weather global storms.

Recent news that Ireland's sovereign debt needs a $40 billion bailout, along with the renewedausterity protests around Europe, or perhaps a major gold scandal may begin to reverse the dollar's decline once again.  However, the severely debased dollar is unlikely to rebound to previous highs given the international awareness of America's financial problems.  Understanding that the goal of the global elite is to move toward a global currency, ultimately they must kill the dollar and other major currencies.

When the world has suffered enough pain from maintaining the volatile dollar as the reserve currency, they will demand, if not beg, for something more stable.  The IMF is pushing to implement the Bancor, which has been introduced as the currency name for the basket of currencies called Special Drawing Rights (SDR).  In America, when the dollar reaches near worthless levels, the desperate public will likely grasp at any solution.  Much like during Katrina when the newly homeless were given ATM cards by the government, we may see the IMF roll out Bancor ATM cards. This will accomplish two goals of the agenda at once:  a global currency that is cashless.


Recent Articles by Eric Blair:
Banksters Inflate Speculative Food Bubble, UN Offers Global Governance Solution
Economic Collapse Leading to Privatized Police and Corporate Mercenaries
Secretive Executive Order Establishes 'Big Brother' Health Bureaucracy

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British Government to Seize All Paychecks

Paul Joseph Watson & Alex Jones
Infowars.com
September 20, 2010

Forget big government – the same elite whose policies caused the financial collapse are now ready to launch the next phase of their fascist takeover of the economy – by forcing businesses to send employee paychecks straight to the government, who would then deduct the “appropriate tax” before the employee receives their wage, as the statist cancer of collectivism grows.

The proposal represents another hammer blow to financial privacy, as the establishment moves towards a total cashless society where every transaction is tracked, traced and controlled by the authorities.

“The UK’s tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and the pay the employee’s by bank transfer,” reports CNBC.

The system would be run by the same organization, Her Majesty’s Revenue and Customs (HMRC), that has become notorious for its botched handling of data and incorrect tax calculations which have forced people to spend months and even years trying to claim back unfairly claimed money seized by the taxman.

But this story is about far more than the threat of mere bureaucracy or bumbling incompetence – this is about the system exploiting the economic crisis it caused as a pretext to completely dominate and control our lives.

This is about the state handing itself the power to arbitrarily raise taxes to any level it desires and then automatically seizing the money with no chance of redress or petition on behalf of the taxpayer.

Allied to the proposal will be a new program that will force middle-class families to take government “lie detector tests,” which are notoriously unreliable and inadmissible in court, as part of intrusive tax investigations into their financial affairs.

Prime Minister David Cameron and his side-kick Nick Clegg’s promise to deconstruct the Big Brother state in Britain has proven to be completely fraudulent. This is Big Brother on steroids, and it mimics a myriad of other programs on both sides of the pond that are being enforced as part of the same move towards total regulation and control over every aspect of our existence.

- Local tax authorities such as Pennsylvania telling residents “we know where you live” and threatening to use satellite imaging technology to track them down for claimed back taxes.

- So-called “smart-meters” being introduced by law to allow utility companies and the government to regulate energy consumption remotely.

- Government plans to dictate what kind of household appliances people are allowed to own and what kind of light bulbs we can use.

- Fees and restrictions on garage sales and any kind of independent, local community-driven economic activity.

- Legislation aimed at preventing people from sharing, trading, or selling homegrown food, as part of a total Homeland Security takeover of all U.S. food and U.S. farms.

Every new assault the state launches against us is focused around increasing our dependence on Big Brother and making us destitute and unable to survive without welfare.

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People in the United Kingdom and the United States need to understand that their governments are malevolent and that their primary purpose is to obliterate the middle class by forcing them to become dependent on the state. As the cost of living soars, as tax hikes go through the roof, and as austerity fascism starts to bite, governments are now moving to prevent people from becoming self-sufficient, dashing the only hope of avoiding poverty for many.

Allied with the march of green fascism, the economic crisis has been ruthlessly exploited by the elite to empower the state to wholly subjugate the people under the thumb of big government. Every step they take is about enriching themselves politically and financially, while ensuring our only recourse is to beg for handouts in return for allowing ourselves to become slaves whose every action is controlled, catalogued, judged and punished by our new masters on the global plantation.

—

Paul Joseph Watson is the editor and writer for Prison Planet.com. He is the author of Order Out Of Chaos. Watson is also a fill-in host for The Alex Jones Show. Watson has been interviewed by many publications and radio shows, including Vanity Fair and Coast to Coast AM, America’s most listened to late night talk show.

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