Mike Gleason: Furthering the point there, let’s talk about the war on cash for a moment. We have negative interest rates coming into the picture, as you just mentioned, with our own Fed telling U.S. banks to start thinking about how they would handle negative rates. Meanwhile, we’re seeing people who want to deal in cash, withdraw their cash, even deposit cash, getting hassled in various ways. Why do you personally think that cash and cash holders are increasingly disfavored by the financial establishment?
Marc Faber: Well, it’s clear to me. If you
look at the world over the last 100 years, you have a group of people
that want to have more and more control over you and me. They want to
know where you are, what you do, what you’re looking at. Basically,
we’re moving into an Orwellian society where they can check everything.
And cash will still be one of the means where you could go somewhere and
buy something and nobody would really know about it. Now they want to
abolish it. Of course, if you have negative interest rates, you want to
essentially prevent people from hoarding bank notes in their safes at no
cost. So you want to deprive them of that privilege, of that freedom,
so you introduce a cashless society. In my opinion, it will not work,
and let me explain to you why.
say you and I live in a small town of a thousand people and suddenly
the government says, “No more cash.” Say, I’m the baker and you’re the
butcher, and a friend of ours is the pharmacist. We can then barter
among each other and effect the balances every month or every 3 months
and so forth. Then, some kind of paper money comes back up. These are
vouchers. So the war on cash would have the exact opposite effect. You
will have a voucher system in every small city, and even in big cities,
some smart people will develop the voucher system. So instead of having
just one currency, paper currency, you’ll have hundreds of paper
currencies. Number two; if they want to really launch a cashless
society, they would have to take your gold away. That, in some
countries, will simply not fly. In other countries, a cashless society
is simply not practical because 80% of the population doesn’t have a
bank account and doesn’t have cash to start with. So in my view, this
cashless business is going to fail very badly.
The argument is, of course, “Oh, we want to move into a cashless
society because we want to prevent criminality.” This is all nonsense.
They want to move into cashless society so they can control you.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.