Emma’s Note: Emma Walsh here, managing editor of the Diary. This weekend’s guest edition comes from Dan Denning, Bill’s coauthor on The Bonner-Denning Letter.
Dan is speaking at the Sprott Natural Resource Symposium this week. It’s one of the main events on commodities investors’ calendars. Joining Dan this year are some of the brightest minds in the commodities world – including colleagues Tom Dyson and Doug Casey.
In a special preview of his presentation below, Dan exposes a dangerous side of the COVID-19 pandemic… one that has nothing to do with new daily cases or mortality rates. Instead, it involves wealth taxes, border controls, and a cashless society that threatens both your wealth and your freedom. Dan’s advice? Get out while you can…
Why did the U.S. Federal Reserve begin rationing coins in June?
The official story is that COVID-19 interrupted coin production at U.S. mints.
This, along with the reduced circulation of coins at grocery stores, gas stations, and retailers because of the economy-wide lockdown, resulted in an interruption to the normal circulation of coins in the economy.
Maybe. But there are two other possible explanations.
First, ordinary Americans are hoarding quarters, nickels, and dimes.
It may not seem like it would add up to much. But when people begin to worry about the availability of cash in the future (or whether they will have a job next month) they literally begin pinching pennies.
This preference for saving over spending could be a big psychological legacy of the Pandemic – the way a whole generation of post-Great Depression Americans was thrifty and careful with money.
It may also reflect a demographic preference for “safety and security” over “freedom and liberty.” But that’s a subject for another letter…
Another explanation for the coin shortage is that this is a deliberate, but stealth, demonetization of physical coins. Cash is a vector of contagion, as I’ve written before in The Bonner-Denning Letter.
You can imagine the government arguing that every physical, hand-to-hand exchange of coins is an incident where a virus could be transmitted. In the name of public health and safety, cash could be phased out and only electronic transactions permitted (“Your money is no good here!”).
A cashless society means every transaction you make can be tagged, tracked, and taxed. The government (and retailers) have full transparency over every aspect of your monetary life. It’s what they’ve always dreamed of. What’s standing in the way?
The only real obstacle is that millions of Americans are “unbanked” or “underbanked.” People on the margins of the economy can only deal in cash. They don’t have bank savings. They don’t have credit. They can’t buy gas, pay rent, or eat without using cash.
The eventual way around this is for every American to have an “American Cash” app on their government-issued smartphone.
You only get government benefits (unemployment, Social Security, Universal Basic Income when it arrives) if you accept the phone.
And the phone comes with the app – along with location tracking, contact tracing for “pandemic purposes,” and the ability of the feds to surveil all of your economic activity… to make sure you aren’t concealing any taxable behavior from Uncle Sam.
(Think I’m paranoid? Tell me where you think we are headed. Comments welcome at [email protected].)
Jurisdictions Without Restrictions
It’s beginning to become obvious that, if certain authoritarian minds have their way, the pandemic will never end. We’ll lurch from one fear to the next, one set of emergency restrictions to the next.
Little by little, the free enterprise system of voluntary commerce between small businesses and sovereign individuals… using sound money and governed by simple laws that apply equally to everyone (the Rule of Law)… will give way to centralized, regulated, permitted, and surveilled activity with fake money.
How do you avoid living in that dystopian world? You have to get out of the big cities and big states before the wealth taxes, capital controls, and border controls go up.
The end of globalization is leading to a radical re-localization. The upside is that local communities are better governed (closer to the governed), more resilient, and there are more to choose from.
The downside is you could get caught on the wrong side of a border once the walls, barb wire, and capital controls go up.
Even worse, your money could be trapped and taxed before you can get it safely to a new jurisdiction.
For example, Alexandria Ocasio-Cortez (AOC) – future Democratic Socialist candidate for President – has called on New York Governor Andrew Cuomo to tax New York billionaires to pay for the state’s botched pandemic response.
Under Modern Monetary Theory (MMT) – a branch of economics popular with Democratic Socialists like AOC – the government can print up money. It doesn’t need to borrow it by issuing bonds or by raising taxes on business and individuals.
But remember, the goal here is not justice or equality. It’s control. Paying for the pandemic response is a perfect excuse to raise taxes and redistribute wealth and power.
Not that I have any particular love for New York billionaires. But once the principle is established that a legislature can take your wealth simply because you have it, it doesn’t matter how wealthy you are. If you have it, they’ll come for it.
The threshold for a “wealth tax” may be a billion dollars now. But in an America with 50 million unemployed, a wipeout of small businesses, and soaring personal debt levels, wealth is relative, isn’t it? You’re next.
Protection Against Torches and Pitchforks
The “Millionaires for Humanity” know this. Led by Disney-heir Abigail Disney, a group of global elites is calling for a “millionaires tax” to fund coronavirus relief.
You can read their full letter here. It’s an impressive exercise in virtue signaling. They want to leave the world a better place by paying more taxes.
Don’t be fooled. These people know exactly what’s going on.
They know the authoritarian response to the virus will leave tens of millions of people in America (and hundreds of millions across the globe) in a permanent state of dependency on the government (if not outright destitution).
To prevent those millions from becoming organized mobs (torches and pitchforks) the elite are willing to give up some money now to the feds in exchange for protection.
Besides, you can be sure that most millionaires have already moved their money (and themselves) to jurisdictions that are out of the reach of grasping state and local governments.
If they haven’t, they will be on the move soon enough, to the types of places I visited on my “bolthole” tours. Safe, quiet places off the beaten path in America… like Boise, Jackson Hole, Asheville, or Wilmington. But not Seattle!
Seattle City Council Member Lisa Herbold suggested firing all the white officers on the police force to meet the council’s goal of cutting the police budget by 50%.
If you fire officers by seniority, it turns out it affects mostly black officers. So, in order to defund the police and promote racial justice, Herbold says the solution is to fire all the white officers.
I’ve got no problem with smaller, less-militarized police forces in the United States. The centralization and militarization of law enforcement in the United States has turned the whole country into a kind of war zone.
Civil asset forfeiture, no-knock raids that violate the Fourth Amendment, the entire War on Drugs (which has filled up our jails with pot smokers), all of this can – and should – change in favor of more liberty, fewer laws, and a less adversarial relationship between the police and the people.
But Seattle has obviously lost its collective mind. (You tend to lose your mind as a member of a group, saying and doing things you’d never do as a sane, sober, rational individual.)
If you live in or around a city experimenting with this kind of ideologically driven collectivism, get out now.
It’s already happening. (I called it the Sixth Migration last year, arguing that some Americans will prefer a more isolated, frontier-like lifestyle to this creeping authoritarian prison-state.)
In the meantime, if we’re going to defund the police, can we also defund the Pentagon, the Department of Education, the Department of Energy, the Environmental Protection Agency, the Department of Transportation, etc.?
Let’s really make America great again and make government small, local, and harmless. (A man can dream.)
Coauthor, The Bonner-Denning Letter
P.S. Bill Bonner wrote an urgent briefing about the crisis he sees coming… the feds’ role in it… and how it will change life in America as we know it. It’s a MUST read. Just go right here…
Like what you’re reading? Send your thoughts to [email protected].