Your Cash Ain't Nothin' but Trash

Back in 1973, the Steve Miller Band song "Your Cash Ain't Nothin' but Trash" ended with "but I'm sure going to get me some more."

That's when cash was king.

Maybe not so much anymore.

These days some governments, academics, bankers, and tech innovators say cash is a relic. They say cash is destined for the trash bin.

A lot of people are frightened by the progress they're making banning it, repackaging its bits into bytes, and even replacing it with cryptocurrencies that reside entirely in cyberspace.

If you're stashing cash, you need to know what the arguments against it are all about and what's going to replace it.

Here's what you should do with your stash before it's trash...

The War on Cash

It started years ago.

The United States once had $100,000, $10,000, $5,000, and $1,000 bills. The Treasury stopped printing these big denomination notes in 1946, and the Federal Reserve recalled the last of them in 1969.

Now there's talk about doing away with $100 bills.

The European Central Bank announced in May of last year that its 500-euro note would be gone by the end of 2018.

In a surprise announcement last November, India's Prime Minister Narendra Modi said the country's 1,000-rupee banknotes (worth about $15.32) would cease being legal tender but could be redeemed at banks and post offices until Dec. 30, 2016. Modi also did away with the country's existing 500-rupee notes (worth $7.66), announcing they would also no longer be legal tender, but would eventually be replaced with new notes.

The problem with cash is it's not traceable.

While governments say it's a matter of national security, that free-flowing cash is feeding terrorist groups, financing the drug trade, that all kinds of illegal activities are cash-driven, and that cash can be counterfeited, the primary reason for the war on cash is taxation.

Urgent: Feds use obscure loophole to threaten retirees. If you have a 401(k), IRA, or any type of retirement account, this could cause you to miss out on $68,870 or more. Learn more

The reason Prime Minister Modi killed the 1,000-rupee and 500-rupee notes is together they account for 86.4% of the value of all rupee bills in circulation. By forcing the population to exchange expiring notes for new notes, authorities can ask where the money came from, if a tax has been paid on it, and if depositors can prove it. If they can't, the tax will be taken from it and a fine totaling as much as 200% of the tax owed will be levied and taken.

The shadow cash economy is believed to be 20% of India's entire GDP, and only around 20 million individuals and families, amounting to 1.6% of India's population, are paying any income tax (data as of 2013, the most recent available).

Breaking the back of corruption where bribes are paid in cash and being able to collect income and transaction taxes could only be accomplished by attacking the old cash economy.

Soon, It'll Be Time to Cash Out

Cash accounts for less than 1% of all legal private and business transactions in the United States. The rest is conducted on plastic, by checks, and via electronic credits and debits, which is fine with the U.S. government, banks, and the Federal Reserve. They're in control of all the payment, settlement, and transaction monitoring systems.

Still, that's not enough.

[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

As of April 2015, Chase Bank (a subsidiary of JPMorgan Chase and Co.) won't accept cash payments on credit card bills, mortgages, equity lines, auto loans, and safe deposit boxes. Debtors have to deposit cash into an account to pay their obligations electronically or by check.

As far as safe deposit boxes, it's not yet illegal to stash cash in them, but there are laws that make it illegal to take cash out of circulation.

The war on cash across Europe is heating up even faster than in the United States.

France banned cash payment on any transactions valued at 1,000 euros or more, Spain's maximum is 2,500 euros, and Uruguay's cutoff is now $5,000.

Extraordinary things can happen when you know how Wall Street really works. You just need someone who's been on the inside who knows exactly how the game is played. Shah sets the record straight in his twice-weekly Wall Street Insights & Indictments, sharing how to trade the bigger picture for maximum gains. Click here to get Shah's Insights & Indictments for yourself, and you can start beating the Street at its own game. It's completely free.

It's the same story. Cash funds illegal activities, and terrorism and can't be taxed if it can't be traced.

Moving entirely to electronic transaction and payment platforms is the stated goal of some governments, some central banks, and some academics.

Besides the digital systems that have been in place for decades, a new threat to cash has taken root.

Cryptocurrencies are springing up almost everywhere.

As much of a threat to cash as they are, they're an even bigger threat to governments and central banks who own and completely control money and credit systems used by hundreds of millions and billions of their citizens.

In due course, the experimentation with currency systems not owned or controlled by governments (or, in America's case, by the Federal Reserve System), will be limited if not outlawed.

The technology on which they rely, blockchain and open-source ledgers, however, are here to stay and could be adopted by central banks who could easily issue new currencies based on new technologies, but they'd own and control the technology and the cryptocurrency.

It makes sense, whether we like it or not. I don't like it, but electronic payment and transaction platforms and cryptocurrencies effectively replace cash.

It's happening already.

Sooner rather than later, we will all need to deposit our cash somewhere or buy hard assets, because one day your cash won't be nothin' but trash.

Up Next: This Win Rate Is Incredible

The U.S. retail sector is crumbling. There have been more than 6,400 store closures in 2017 alone.

These doomed-to-fail companies could be your ticket to windfall gains.

You see, I have a list of 40 retail stocks. I know exactly when each one is likely to terminate. And I've pinpointed specific trades that could help you net up to $1.6 million as they fall into bankruptcy.

I'm sharing this research exclusively with my Zenith Trading Circle subscribers. Since April 21, I've shown them over 3,318% in total winning gains, including individual returns of 179%... 324%... and 995%.

Click here to learn how you can take part.

The post Your Cash Ain't Nothin' But Trash appeared first on Wall Street Insights & Indictments.

About the Author

Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.

The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.

Shah founded a second hedge fund in 1999, which he ran until 2003.

Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.

Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.

Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.

Read full bio