Why Governments and Central Banks are Herding you into Digital Pens

Over the past couple of years here at Port Phillip Publishing, I’ve become the office ‘go-to’ person when it comes to buying physical bullion.

I’m not quite sure how that happened. I’ve never considered myself an expert on the subject.

But if you read my contributions in Money Morning and the work I do with Jim Rickards at Strategic Intelligence, it’s easy to understand why. I’m pretty much always banging on about gold.

Occasionally I get to another topic. A few favourites at the moment are: inflation, interest rates, and what the Reserve Bank of Australia (RBA) will do next.

Yesterday, Business Insider Australia suggested the RBA will start raising rates in the second half of next year. I’m not convinced this is the case. In fact, I’ve explained to subscribers of Strategic Intelligence that I believe the cash rate will be at 1% by May 2017.

Sometimes I even wander on to another topic, such as oil. Specifically, oil-related debt in the global markets.

The short version of the story is that oil producers and explorers borrowed bucket loads of money when Brent crude fell from US$115 (AU$156) per barrel in July 2014. Jim has explained that there could be up to US$5 trillion (AU$6.7 trillion) worth of energy related debt that can’t be paid back. The amount of debt is actually much larger than US$5 trillion, once all of the derivatives are added up.

The problem is that no one knows exactly how many derivatives are out there for energy-related debt. But that chaos is asleep for now. Energy related debt is more likely to be a bigger problem in 2017–18.

As for gold — well, that’s today’s problem. And what you do from here is up to you.

Uncle Sam wants you

Many people in Australia are familiar with the steps that a particular US president took to confiscate gold.

Back in 1933, President Franklin Roosevelt established ‘Executive Order 6102’ — which forbade private citizens in the US to ‘hoard’ gold coins, gold bullion and gold certificates. People in the US had less than 30 days to hand over their gold to local banks. In return, they would receive US$20.67 per ounce.

If people didn’t, the government threatened to give them a US$10,000 (AU$13,566) fine, or 10 years in the slammer. If they were in a good mood, the government could whack both penalties on offenders. To put this in perspective, the fine the US government was dangling in peoples’ faces is equivalent to US$183,000 (AU$248,275) today.

Given that princely sum, it’s easy to understand why people willingly handed over their gold.

Of course, history shows what really happened. Once all the gold had made its way through the banking system, the US government ‘revalued’ the price of gold from US$20.67 an ounce to US$35 overnight.

Effectively devaluing the US dollar 75% in a matter of hours.

Over the years, I know a couple of people who’d say that ‘the gold confiscation’ from the US government was obvious. That, if it were them all the way back in 1933, they never would’ve handed their gold in. They simply would’ve dug a deeper hole in the ground. They’re smart, and they can sniff out a corrupt government idea a mile away.

The truth is that the plan behind the greatest theft of citizen wealth in US history is obvious — in hindsight.

Eight decades on, it’s easy to call out that plan as bulldust.

However, these same people who scoff about how obvious the 1933 gold heist was are the first people to pay with their card at a restaurant. They only ever use ‘tap ‘n go’ to buy their coffees. And they are always borrowing money for the parking metres around Melbourne because they ‘don’t carry a relic like cash around anymore…’

Well, dear cashless friend, congratulate yourself. You are doing exactly what your government wants you to do.

Uncle Sam

Source: Entire News Link
[Click to enlarge]

If you aren’t familiar, the above picture is a spin off from a First World War poster in the US. The personification of the US government was ‘Uncle Sam’ urging healthy and fit young men to enlist in the army.

The original poster had the slogan ‘I want you’ emblazoned across it.

I’ve twisted that slogan a little today to get your attention.

You see, it’s not just the US government, but all governments, that want you. To hand over your wealth that is.

Unlike the gold confiscation in 1933, which took less than a month from start to finish, there is a very slow war being waged on cash.

It’s a subtle hint here. An idea drop there.

It started in 2014, when Professor Kenneth Rogoff, of Harvard University in the US, wrote a paper on the costs of cash to society, and theorised on the benefits of moving towards a cashless society.

Then, in early 2015, JP Morgan Chase sent a letter regarding updated terms for their safe deposit box lease holders. Basically, the new terms from the bank stated that people couldn’t hold cash or coins — unless they were collectable — inside the safety deposit boxes anymore. The agreement didn’t specify gold or silver bullion coins.

Almost two years later to the day since Rogoff released his paper, the European Central Bank (ECB) announced they will not continue producing the €500 (AU$709) at the end of 2018. It will still be legal tender after this date. But as each €500 note finds its way into a bank, they will be permanently withdrawn from circulation.

Why is the ECB doing this? Crime, of course! Apparently only bad people use large notes. And if they take out all of the large notes from circulation, the criminals will have nothing…no medium of exchange for their evil deeds.

Which is just nonsense. The smaller notes will still be in circulation. Before paper money, civilisation found ways of making payments for things. By say, a barter system.

Get in your digital pen

ECB claims they are discontinuing the large legal tender amount to reduce or restrict illegal activities.

These statements — that large notes are part of illegal behaviour — terrify me.

Don’t believe for a second that the ECB are doing this to prevent criminal activity. Words like this are manipulative. They want you to think that reducing large notes will benefit you in the long term.

It won’t.

On the other side of the world, in the US, Harvard Professor Larry Summers also backs the end of the US$100 note.

It’s worth recalling that through most of the 20th century, the US printed $1,000, $5,000, and even $10,000 notes. Those denominations were officially discontinued on 14 July, 1969, though they remain legal tender today. Good luck trying to pay for your groceries with one of these notes, though!

Right now, the lie is that reducing large notes will benefit you by limiting criminal activity.

This move isn’t about preventing corruption or ending black market activity. People who engage in illicit activity will always find a medium of exchange that works.

But for you, the good citizen that toes the line, it’s very different. Once you have all your wealth locked into nothing more than binary code, inflicting negative interest rates and inflation upon the public becomes easy.

So let’s call this what it is.

Having already stamped out the truly high denominations, what the elites are doing here is not part of a scheme to protect you. It’s to force people into the banking system in greater numbers than ever before.

Jim spoke about this at The Great Repression conference three weeks ago, telling the audience: ‘When you’re ready to slaughter cattle, you heard them into a pen. We’re all being herded into a digital pen to force us into digital assets.

It bothers me, and it should bother you. This corralling of wealth is happening right before our eyes. This isn’t scaremongering. It’s a very real threat, and it’s happened before.

We are smarter. Smarter about gold theft, that is. But can you see what is happening?

Limiting or stopping large denominated notes is the first step to what I believe will be the greatest confiscation of global wealth in history.

Unlike last time, though, we have the warning that this is happening.

Buying physical bullion

This is why I always talk about gold.

Sure, I took the long way around to get to my point. But that’s the thing with people and gold.

Even though gold is perhaps the simplest form of exchange, the reasons to own it are complicated.

A heist is coming. Not today, and not tomorrow. But soon.

It won’t be an ‘Executive Order’ like last time.

It won’t be contained to just one country, like it was in 1933.


This time, the elites are going to slowly coerce you into the financial system. It will take some years, but the time to own gold is now.


Shae Russell,
For Markets and Money

Editor’s Note: Newman Show Hijacked! James Woodburn and Kris Sayce hijacked The Newman Show to discuss recent market news across Money Morning and Markets and Money.

Join Woody and Sayce for an informal discussion on…Trump infrastructure spending… where the money’s going…resource investment opportunities…how far the Aussie housing market has left to run…the war on cash… You can watch all that, and more, right here.

Shae Russell started out in financial markets more than a decade ago. Working with a derivative brokering firm, she helped clients understand derivative markets, as well as teaching them the basics of technical analysis. Since joining Port Phillip Publishing eight years ago, Shae has worked across a number of publications. She holds the record for the highest-returning stock recommendation, in which a microcap stock returned over 1,200% in six months. Ask her about it, and she won’t stop yapping on. For the past two years, Shae has worked alongside Jim Rickards as his Australian analyst, translating global macro trends for Aussie investors, and how they can take advantage of these trends. Drawing on her extensive experience, Shae is the lead editor of Markets & Money. Each day, Shae looks at broad macro trends developing around the world, combining them with her distaste for central banks and irrational love of all things bullion.

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