Thus one government intervention begets a further government intervention. Because government has failed in its primary task…politicians ask, in effect, for price and wage fixing; and we are driven toward totalitarian control.
- Henry Hazlitt “What You Should Know About Inflation“
Though commenting on the state’s backing of union thuggery, Hazlitt pinpoints one of the essential rules of conduct for public officials. That is, intervene in private life to appease one wealthy interest group to then create the groundwork for further power grabs with the inevitable disaster which emerges. Thankfully, blatant usurpation of authority by lawmakers is still frowned upon by many taxpayers. That’s why, less a case of opportunistic disaster (“you never let a serious crisis go to waste” as lifelong parasite and former ballerina Rahm Emanuel put it), authoritarianism is achieved in small doses.
Can’t be feeding the people too much information on what their money is really being used for, now
At the beginning of April, Canadian Prime Minister Stephen Harper revealed his budget for the fiscal year of 2013. Contained within the budget, besides the promising feature of axing 12,000 public sector sponges, was the provision where the Royal Mint of Canada is to cease the production of pennies. The government blames the cost of production for its decision while ignoring the culprit of relentless currency debasement. As Maple Leaf Metals Exchange founder Chris Horlacher documents:
In the late 1960’s the quarter and dime were ended in the de-facto sense. Those coins used to be made from 80% or more silver but after the price of silver began to exceed the face value of those coins they were quickly pulled from circulation and replaced by a nickel imposter. After it became too expensive even to use nickel then the government turned to steel in 1999 in order to continue creating what now amounted to little more than a casino token.
The penny followed a similar trajectory. It was made from nearly pure copper up until 1996, at which point the government turned to zinc in order to make them. In only 2 years it could no longer even maintain the zinc penny-standard and has made them out of steel ever since. Now it’s farewell to even that denomination of currency and for the first time in Canadian history there will no longer be such a thing as 1/100th of a dollar, all transactions will be rounded to the nearest nickel. Don’t expect that to last very long at this pace.
With the Canadian penny slowly making its way to the dustbin of currency history, the Royal Canadian Mint has its sights set on a new target: tangible, hard money in general. From the National Post:
Last week, the Mint announced the release of MintChip, a completely digital currency. “Money, as we know it, is fine for today, but tomorrow is a different story,” says an introductory MintChip video. “MintChip is better than cash, since you can use it online.”
MintChip stores value in a physical chip, and transfers money between chips using heavily encrypted “value messages.” The system has no centralized database. “They’re calling it anonymous … their intention is that it’s no more associated with who you are than [traditional] currency,” said Jacqueline Chilton with Glenbrook Partners, a California-based payment consultant.
The trick here is that nothing government does is voluntary. The forced usage of the Canadian dollar via legal tender laws renders the assertion of “voluntary” laughable. The Mint claims the chip can be used anonymously but this assurance comes from the institution in cahoots with a central bank that can’t manage a simple metal standard for more than a few decades. According to the Bank of Canada’s inflation calculator, a basket of goods that cost $100 in 1934 (the year the Bank of Canada was established) costs $1,683.33 today. That’s a 1,583.33% increase!
Then again, inflation to the benefit of the state and other first receivers of newly printed money was always the objective of the Bank of Canada. The “lender of last resort” justification was just a euphemism for financing the government’s stranglehold on society. The banks are guaranteed a liquidity backstop to their risky lending (and subsequent payout of exorbitant executive bonuses) while John Q. Public is squeezed at the gas pump and the grocery store queue.
Central banking has always been about centralized control over what Murray Rothbard referred to as the lifeblood of the economy; the universal medium of exchange known as money. The real impetus behind the “Mintchip” is not convenience but an insidious desire on the part of the ruling class to assert their dominance over free transactions by forever digitizing their history. Governments have been waging a war on anonymous business since central banking became the norm. According to Pace University economist Joseph Salerno, the Federal Reserve has eliminated the issuance of denominations of the paper dollar over $100 since 1945. As Salerno writes:
This has made large cash transactions extremely inconvenient and has forced the American public to make much greater use than is optimal of electronic-payment methods. Of course, this is precisely the intent of the US government. The purpose of its ongoing breach of long-established laws regarding financial privacy is to make it easier to monitor the economic affairs and abrogate the financial privacy of its citizens, ostensibly to secure their safety from Colombian drug lords, Al Qaeda operatives, and tax cheats and other nefarious white-collar criminals.
Privacy has been sacrificed to ensure fewer transactions go undocumented. As long as large scale purchases and payments are recorded, the goons at the IRS and tax collection agencies around the world are better able to legally plunder more wealth from the citizenry. Politicians remain unwilling to let the party come to an end despite economic recession decreasing the amount of tax revenue flowing into their coffers. Spending money that isn’t theirs is all they know. Instead of living within their means, they opt for more thievery to keep buying votes. While the Eurozone crashes and burns due to unsustainable welfare states and lawmakers addicted to profligacy of public funds, both Spain and Italy have put a limit on large cash transactions. Tax evaders, looking for nothing more than to alleviate the pain of the tax enforcer’s whip, have become the enemy for not ponying up to satisfy the various highway gangs at the local, state, and federal levels of government.
The introduction of the “Mintchip” is really just another extension of the state’s effort to wield supremacy over private affairs. It is creeping socialism under the guise of efficiency. But, as anyone familiar with the nature of state understands, government efficiency is an illusion. As anonymity in free transactions goes, so goes another barrier on further centralized planning.
Lew Rockwell’s rule of thumb follows that anything the government or its apologists in the media claim must be assumed to be an outright lie. The development of the “Mintchip” for “convenience” is no different.
If the state wanted to save Canadians money, it would relinquish its control over the monetary sphere and put an immediate end to perpetual inflation. Instead, keeping track of the serfs is the real name of the game.
James E. Miller holds a BS in public administration with a minor in business from Shippensburg University, PA. He is the chief blogger at the Ludwig von Mises Institute of Canada and a current contributor to his hometown newspaper, the Middletown Press and Journal.
The fine for payments above € 2,500 will affect payer and receiver
The measure will take effect immediately, but will be accompanied by others which will be operational in 2013.
LM / AGENCIES 12/04/2012
Secretary of State for Finance, Michael Ferre, stated on Thursday that both the payer and the recipient of cash payments in excess of 2,500 euros will be sanctioned by the measure including the Government's draft bill to be approved tomorrow the Council of Ministers.
During a luncheon organized by the Association of Financial Journalists (APIE), Ferre has not specified whether the fine, initially set at 25% of the cash payment made will be split between payer and receiver or if everyone has to bear the 25% of that amount. "Tomorrow I know," said Ferre, who explained that the Treasury set the limit at 2,500 euros because it believes that this figure mark certain operations "entity" should not be paid with "a wad of cash." Also explained that we have studied a range that began with the limit set by Italy (1,000 euros) and ended in the French (3,000 euros). "For us it is more reasonable 2,500 Euros," he asserted.
Other crimes: he explained that the fine does not relieve 25% of other crimes that can be detected as false invoices or undeclared income, among other things. "It's a mechanism, an additional sanction," he underlined. The measure, included in the draft law approved by the Government tomorrow, will take effect "immediately", but must be accompanied by others which will be operational in 2013 because it is better to match the beginning of a calendar year to be "more digestible".
More transparency: as Ferre, bring greater transparency to economic activity and will reduce the amount of tax fraud, while improving the collection as have other specific plans such as the investigation of 500 euro, which turned out to be "pretty" and required step "more aggressive".
Foreign assets: another of the measures included in the draft will be required to declare foreign assets has announced this morning the Minister of Finance and Public Administration, Cristobal Montoro, and is done through a policy statement that will a punishable for possible breaches.
In fact, the bill will contain, as Ferre, measures "very powerful" to convey the message that the tax amnesty is a process approved "truly extraordinary and exceptional" and that those not qualifying for the voluntary adjustment will have to bear the consequences from 2013.
About the amnesty, Ferre has said the government expects to collect about 2,500 million euros, drawn from different sources, although their contribution in income will be noticed only a year, so that by 2013 will have to consider ways to compensate for the disappearance of amnesty, as recorded by Europa Press.
Secretary of State reminded once again that is an exceptional measure that has been done in Spain and other countries and the OECD itself is generally recommended to be implemented from time to time to put the "zero marker" and generate funds for administrations. As to the 10% that makes the amnesty, Ferre explained that the Government has set at 5% in Italy and 20% in Germany, who has been "very successful" in attracting capital and has decided to stay in 10%.
this episode, Max Keiser and co-host, Stacy Herbert debt fondue and
Central Banks. They also talk about Somalia's stable shilling and the
lesson it holds for Europe. In the second half of the show Max talks to
professor and economist, Constantin Gurdgiev about the new book of
essays he's edited - What if Ireland defaults? They discuss the good
cop, bad cop routine by the Troika in Ireland and what lessons can be
drawn from the Russian default of the late 90's.