Following the post about the prospect of a cashless society http://theylaughedatnoah.blogspot.com/2019/03/i-promise-to-pay-bearer-nothing-by-jd.html
and the observation that cash in bank notes is not real money, our blog host sent me this link which highlights 'the risks of a cashless society' -
https://www.armstrongeconomics.com/armstrongeconomics101/economics/the-risks-of-a-cashless-society/
An interesting post and there were two things he wrote in there which are worth further comment:
(1) "They [the Government] firmly believe if everyone paid their taxes, they would have no problem. Of course, that is a fantasy. Whatever they collect will NEVER be enough to sustain their power."
I remember two years ago Narendra Modi decided to outlaw large denomination notes because 'they were used by tax dodgers' and later I read somewhere that his 'experiment' had been a disaster because it turned out that there was very little in the way of 'black money' circulating but more importantly many businesses collapsed and unemployment went up. Plus it cost the Government in that it resulted in lower tax revenues. Can't recall where I read that but I have found this Wiki page with a summary of events -
https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetisation
Further down the Wiki page it has these reactions from a few real experts -
"Steve Forbes described the move as 'Sickening And Immoral'. He stated that "What India has done is commit a massive theft of people's property without even the pretense of due process--a shocking move for a democratically elected government." Nobel laureate Paul Krugman said that it is difficult to see gains from demonetisation, while there may be significant costs to it. Economic analyst Vivek Kaul stated in a BBC article that "demonetisation had been a failure of epic proportions.""
(2): "In Europe, there is already the tradition of canceling their currency. This is done to prevent people from hoarding cash and not paying taxes."
Long time ago it occurred to me that changing the design of banknotes was a subtle way of preventing people from keeping cash under the mattress. The last time the twenties were changed I had to go to the bank because my mother had rather a lot of notes neatly stuffed into envelopes. She had spent her whole life budgeting for the household and being thrifty. Saving up for what she and the family needed. Everyone did the same in the old days. The only outside savings she accumulated were the 'divi' on her Co-op shopping in an account there, all recorded in her 'Pass Book'. When I went to the bank with the envelopes full of cash I just said "Don't ask!" but they understood because they had mothers like that too and knowing the people who worked there helped also. How things have changed and not for the better. I still keep a wary eye on the papers for the first hint of any redesign of the currency.
Over the years I have learned the hard way that financial institutions are, like governments, not your friend! I know now that my small private pension was pointless with the returns being a lot less than promised and we all know what successive Governments have done to our pension funds.
I also know that the insurance and surety companies will do anything to avoid paying out money. Do you know the difference between a bookmaker and an insurance company? The bookie will pay you without any argument over the sum he owes you!
In the eighties virtually all mortgages were linked in some way to endowments or other 'investment for growth' vehicle. I was looking to buy a property in 1987 but could not find a normal straightforward repayment mortgage. They were very rare beasts indeed so I abandoned the idea of buying at that time. It was quite obvious to even my limited understanding of finance that the projected growth of these funds was highly unlikely to happen and so it proved.
So where to place any savings to keep it safe from all the 'sticky fingers' of government agencies and other financial wizards with their promises of unlimited milk and honey flowing from their 'safe' investments?
Not a new problem as I see from this randomly generated blog post which appeared in the right hand sidebar of this blog today.
http://theylaughedatnoah.blogspot.com/2010/01/money-fund-or-mattress.html
P.S.
Yesterday I saw the end of one of those RT documentaries and it was Noam Chomsky saying 'money is a form of speech' quoting a legal judgment, Buckley v Valeo 1976. That pricked up my ears so I looked for it and found this -
https://democracyisforpeople.org/page.cfm?id=19
Truly, "the Law is a ass" as Dickens observed. Legal opinion is based on the extreme logical definition of the words in the legal text with judgments handed down which defy common sense. Remember Bill Clinton defending himself during the Lewinsky affair "... it depends on what the definition of 'is' is."
Humpty Dumpty is the patron saint of Lawyers everywhere -
“When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’
’The question is,’ said Alice, ‘whether you can make words mean so many different things.’
’The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all.”
― Lewis Carroll, Through the Looking Glass
I think we have inhabited a looking glass world for a long long time!
Monday, March 25, 2019
Brexit: We Never Lost Our Sovereignty
… but we could.
Until recently I thought as so many still do, that the EU had taken over. At the Third Reading of the 1993 Maastricht Bill, that great if sometimes a little crazy Parliamentarian Tony Benn said it was “my last speech in a free Parliament.”
Not, it turns out, quite, thanks to our judiciary.
It began with a pound of bananas. Or rather, 454 grammes.
In February 2000, trading standards officers visited the Sunderland market stall of greengrocer Steve Thorburn and warned him against using pounds and ounces. After another visit in which they erased the authorisation stamps on his weighing machines, they finally raided him on 4 July 2000, seized his scales and successfully prosecuted him in the Magistrate’s Court in March 2001.
For what?
The Weights and Measures Act of 1985 had entitled traders to continue using Imperial as well as metric units; but the Act was amended in 1994 in accordance with various EU directives, outlawing the use of Imperial measures after the end of 1999.
Now, the EU only had the power to issue such orders because we had joined the EEC under the 1972 European Communities Act. A key point is that ECA 1972 included provisions of the type known here as ‘Henry VIII clauses’ that allow Ministers to pass secondary legislation on matters arising – ‘statutory instruments.’ Hence the basket of Weights and Measures Act 1985 amendments laid before Parliament on 19 July 1994 by the then Minister for Trade and Industry, Lord Strathclyde – see Column 182 in Hansard here.
Statutory instruments represent a partial devolution of power from the Legislature to the Executive, obviating the need to pass new primary legislation and so escaping bothersome Parliamentary scrutiny. This is an issue that goes far beyond the meddlesome nuisances of the EU.
Thorburn’s defence was that of ‘implied repeal’: since the 1985 W&M Act came later, surely it overrode ECA 1972? The magistrate correctly observed that EU law had primacy so long as we were still in the Community, and found against him.
Thorburn and other victims of Germaniacally zealous officialdom appealed to the High Court in 2002. Giving judgment against the ‘Metric Martyrs’, constitutional expert Lord Justice Laws explained that it was not a case of EU law versus British law, since ECA 1972 had imported the former into the latter.
So why could the 1985 law not ‘implicitly repeal’ the one from 1972?
The answer was that ECA 1972 is a ‘constitutional statute’ – a special kind that stands above the common run of laws. But – and here is the key to our prison – it arises from and remains in British law, and can be repealed by us.
Laws LJ went on to say (para 58 here):
‘There is nothing in the ECA which allows the Court of Justice, or any other institutions of the EU, to touch or qualify the conditions of Parliament’s legislative supremacy in the United Kingdom. Not because the legislature chose not to allow it; because by our law it could not allow it. That being so, the legislative and judicial institutions of the EU cannot intrude upon those conditions. The British Parliament has not the authority to authorise any such thing. Being sovereign, it cannot abandon its sovereignty.’
And so, on 25 June 2018, the EU Withdrawal Act was passed.
I am sure that His Lordship is too modest to wish it, but surely he is a strong candidate for a permanent statue on the fourth plinth in Trafalgar Square. As is a humble, freedom-loving greengrocer who died tragically young, mistakenly believing he had been defeated.
This is only the beginning. ‘We need to talk about Parliament’ – the use of statutory instruments, of Orders in Council (such a useful tool for the Constitutional vandal Blair), the general ‘bullying’ as Angela Eagle called it last week, of Parliament by the Executive.
Worse, Bruce Newsome's TCW article today shows the outrages that the latter, or at least the Prime Minister personally, is now prepared to attempt.
How tragic, that she seems willing to assist the relentless drive of the EU to make itself master of all Europe, and to snuff out our near-thousand-year-old flame of liberty before its captive nations try to light their own candles from it.
She has gone from laughing-stock to weeping-stock. She, and they, will, must, fail.
Until recently I thought as so many still do, that the EU had taken over. At the Third Reading of the 1993 Maastricht Bill, that great if sometimes a little crazy Parliamentarian Tony Benn said it was “my last speech in a free Parliament.”
Not, it turns out, quite, thanks to our judiciary.
It began with a pound of bananas. Or rather, 454 grammes.
In February 2000, trading standards officers visited the Sunderland market stall of greengrocer Steve Thorburn and warned him against using pounds and ounces. After another visit in which they erased the authorisation stamps on his weighing machines, they finally raided him on 4 July 2000, seized his scales and successfully prosecuted him in the Magistrate’s Court in March 2001.
For what?
The Weights and Measures Act of 1985 had entitled traders to continue using Imperial as well as metric units; but the Act was amended in 1994 in accordance with various EU directives, outlawing the use of Imperial measures after the end of 1999.
Now, the EU only had the power to issue such orders because we had joined the EEC under the 1972 European Communities Act. A key point is that ECA 1972 included provisions of the type known here as ‘Henry VIII clauses’ that allow Ministers to pass secondary legislation on matters arising – ‘statutory instruments.’ Hence the basket of Weights and Measures Act 1985 amendments laid before Parliament on 19 July 1994 by the then Minister for Trade and Industry, Lord Strathclyde – see Column 182 in Hansard here.
Statutory instruments represent a partial devolution of power from the Legislature to the Executive, obviating the need to pass new primary legislation and so escaping bothersome Parliamentary scrutiny. This is an issue that goes far beyond the meddlesome nuisances of the EU.
Thorburn’s defence was that of ‘implied repeal’: since the 1985 W&M Act came later, surely it overrode ECA 1972? The magistrate correctly observed that EU law had primacy so long as we were still in the Community, and found against him.
Thorburn and other victims of Germaniacally zealous officialdom appealed to the High Court in 2002. Giving judgment against the ‘Metric Martyrs’, constitutional expert Lord Justice Laws explained that it was not a case of EU law versus British law, since ECA 1972 had imported the former into the latter.
So why could the 1985 law not ‘implicitly repeal’ the one from 1972?
The answer was that ECA 1972 is a ‘constitutional statute’ – a special kind that stands above the common run of laws. But – and here is the key to our prison – it arises from and remains in British law, and can be repealed by us.
Laws LJ went on to say (para 58 here):
‘There is nothing in the ECA which allows the Court of Justice, or any other institutions of the EU, to touch or qualify the conditions of Parliament’s legislative supremacy in the United Kingdom. Not because the legislature chose not to allow it; because by our law it could not allow it. That being so, the legislative and judicial institutions of the EU cannot intrude upon those conditions. The British Parliament has not the authority to authorise any such thing. Being sovereign, it cannot abandon its sovereignty.’
And so, on 25 June 2018, the EU Withdrawal Act was passed.
I am sure that His Lordship is too modest to wish it, but surely he is a strong candidate for a permanent statue on the fourth plinth in Trafalgar Square. As is a humble, freedom-loving greengrocer who died tragically young, mistakenly believing he had been defeated.
This is only the beginning. ‘We need to talk about Parliament’ – the use of statutory instruments, of Orders in Council (such a useful tool for the Constitutional vandal Blair), the general ‘bullying’ as Angela Eagle called it last week, of Parliament by the Executive.
Worse, Bruce Newsome's TCW article today shows the outrages that the latter, or at least the Prime Minister personally, is now prepared to attempt.
How tragic, that she seems willing to assist the relentless drive of the EU to make itself master of all Europe, and to snuff out our near-thousand-year-old flame of liberty before its captive nations try to light their own candles from it.
She has gone from laughing-stock to weeping-stock. She, and they, will, must, fail.
Friday, March 22, 2019
New post on "The Conservative Woman"
... in which I discuss Bercow's Monday statement and the points of order arising.
Here:
https://www.conservativewoman.co.uk/point-of-disorder-mr-speaker/
Here:
https://www.conservativewoman.co.uk/point-of-disorder-mr-speaker/
FRIDAY MUSIC: Fandango, by JD
The Fandango is a lively couples dance from Spain, usually in triple metre, traditionally accompanied by guitars, castanets, or hand-clapping ("palmas" in Spanish). Fandango can both be sung and danced.
https://en.wikipedia.org/wiki/Fandango
https://en.wikipedia.org/wiki/Fandango
Thursday, March 21, 2019
I Promise To Pay The Bearer - Nothing, by JD
Reading this in the Daily Mail the other day reminded me that I had seen people waving their cards at the tills and then walking away without collecting any receipt or verification. How do they know at the end of the day what they have spent and where? Do they all have such wonderful photographic memories? Very often the purchase is for a minimal amount which baffles me even more.
But the use of credit cards and debit cards is annoyingly widespread. I say annoying because the users of cards are the ones who hold up the queue while they fumble in purse or wallet trying to find the card. Then they take an age to put their pin number into the reader and then take their time replacing said card in purse or wallet.
(It doesn't really annoy me, it just amuses me and I have all the time in the world.)
https://www.dailymail.co.uk/news/article-6814055/One-three-card-payments-Britain-day-contactless.html
But in among the comments was this: "A misleading article. Whilst payment volume is higher by card, transaction volume is still note and coin ahead of card, including contactless."
So what exactly is the percentage of cashless transactions in the 'market place' and what is the percentage of cash purchases?
An illustrative tale:
I was watching the racing from Cheltenham last Friday (Gold Cup day) and enjoying it as usual of course. The coverage includes news from the 'betting ring' at regular intervals. There is one reporter standing watching the bookmakers and telling us about the changing odds. Before one of the races he was standing with £10,000 in cash in his hand and saying it was from a punter who was waging it on a particular horse, he then threw the money into the bookmaker's satchel while shouting at the camera. He did the same again before the Gold Cup. He counted out five bundles of £1000 each and said 'this is for a friend of mine' and he handed the money to the bookie and received a betting slip in return. (Both horses lost, by the way!)
So I thought to myself: how is that going to work in our new exciting and wonderful cashless society? And if 'cashless' betting ever arrives, what happens if you have a winner and you go to collect your winnings? "Give me your bank details please and we will transfer your winnings electronically." Yes.....er, no I don't think so.
I can't imagine that the bookies will welcome such a thing. More to the point, owners and professional gamblers are all happier to deal in cash and some owners are very rich men indeed and are not without influence in this country.
And then I thought of other instances where cash is the best choice; car boot sales or craft fairs or 'flea' markets and other second hand markets.
My father always had a pocket full of cash and so did I in the days we were building houses. Most traders did prefer cash because it was and is quicker and easier than anything else if you need to buy materials and other odds and ends during the working day. In fact up to the early seventies there were still things like wage packets and people were paid with real cash money! (Pound notes are not 'real' money; they are promissory notes. It is written on every bank note - 'I promise to pay the bearer on demand the sum of £xyz')
I still pay for everything with cash as far as possible. In fact I have forgotten the pin number for my credit card; if I use it at all it is for buying on line. Last time I used it outside was to buy a second hand car - half cash and half card! I suppose I would get arrested if I tried to do that now :)
Will we all be forced into this plastic world or will enough people resist? And is it as widespread as the papers are telling us because I have seen contradictory articles saying that there is still £x billion in notes in circulation.
As my grandfather used to say when he looked at the state of the world "I'm glad I'm on the way out!" and then start laughing at the absurdity of life. I am pleased to say I have inherited his sense of humour!
_____________________________________________
Sackerson says:
The Bank of England responded to a Freedom Of Information request several years ago, saying:
"The link with gold was finally broken in 1931 and since that time there has been no other asset into which holders have the right to convert Bank of England notes. They can only be exchanged for other Bank of England notes. Nowadays public faith in the pound is maintained in a different way - through the Bank's operation of monetary policy, the object of which, by statute, is price stability."
Faith and trust are in short supply these days; and "price stability" doesn't mean what it used to. The BoE says:
"Monetary policy affects how much prices are rising – called the rate of inflation. We set monetary policy to achieve the Government’s target of keeping inflation at 2%.
"Low and stable inflation is good for the UK’s economy and it is our main monetary policy aim."
To keep pace with target inflation (and how is that measured? RPI? CPI? Something else?) you need your bank account to give you 2.5% per annum pre-basic rate tax - on all your savings, not up to some wretchedly low limit.
Money used to be a store of value. For centuries, a loaf of bread was a penny. And as I said a few years ago:
"The Bank of England's website has a page that lets you calculate cumulative inflation for any period from 1750 onwards. According to them, a basket of goods and services costing £1 in 1750 would have cost (the equivalent of) £1.80 in 1900 - an average annual inflation rate of 0.3%. That period covers the tremendous increase in productivity introduced by the Industrial Revolution and further late-nineteenth-century scientific and technological developments, so inflation is not needed for business and prosperity."
Then there's the danger of strangers electronically hacking into one's bank account; and the wholesale spying by retailers and potentially the Government, on all our transactions.
But if you want something worse to worry about, there's the EU's Bank Recovery and Resolution Directive (BRRD). Under this, if a bank is in crisis, it can cut its debt to creditors and/or exchange the debt for a share in the ownership of the bank ("Congratulations! You are now part owner of a dodgy business!")
So what, silly creditors, who'd lend money to a bank, you might think. What many people still don't realise is that their bank deposits are no such thing - money left with a bank is, legally, an investment. And, dear "depositor", you are not first in the queue to be paid when a bank defaults.
If more people understood the implications, they would be a little less likely to leave their life savings in those reassuringly solid marble-and-plate-glass fortresses. This is causing concern in high finance circles, too.
Except holding cash - paper receipts for Nothing At All - is hardly an attractive alternative.
Can you imagine that at a time like this, Canada's comical boy PM sold off the rest of the country's gold? Keynes called gold a "barbarous relic", but it has an intrinsic value - they used to say that "an ounce of gold buys a handmade suit" and that's still pretty much true. Compare that with a rotting paper relic.
Clap hands for Tinkerbell, everyone. Only the power of faith keeps us aloft.
But the use of credit cards and debit cards is annoyingly widespread. I say annoying because the users of cards are the ones who hold up the queue while they fumble in purse or wallet trying to find the card. Then they take an age to put their pin number into the reader and then take their time replacing said card in purse or wallet.
(It doesn't really annoy me, it just amuses me and I have all the time in the world.)
https://www.dailymail.co.uk/news/article-6814055/One-three-card-payments-Britain-day-contactless.html
But in among the comments was this: "A misleading article. Whilst payment volume is higher by card, transaction volume is still note and coin ahead of card, including contactless."
So what exactly is the percentage of cashless transactions in the 'market place' and what is the percentage of cash purchases?
An illustrative tale:
I was watching the racing from Cheltenham last Friday (Gold Cup day) and enjoying it as usual of course. The coverage includes news from the 'betting ring' at regular intervals. There is one reporter standing watching the bookmakers and telling us about the changing odds. Before one of the races he was standing with £10,000 in cash in his hand and saying it was from a punter who was waging it on a particular horse, he then threw the money into the bookmaker's satchel while shouting at the camera. He did the same again before the Gold Cup. He counted out five bundles of £1000 each and said 'this is for a friend of mine' and he handed the money to the bookie and received a betting slip in return. (Both horses lost, by the way!)
So I thought to myself: how is that going to work in our new exciting and wonderful cashless society? And if 'cashless' betting ever arrives, what happens if you have a winner and you go to collect your winnings? "Give me your bank details please and we will transfer your winnings electronically." Yes.....er, no I don't think so.
I can't imagine that the bookies will welcome such a thing. More to the point, owners and professional gamblers are all happier to deal in cash and some owners are very rich men indeed and are not without influence in this country.
And then I thought of other instances where cash is the best choice; car boot sales or craft fairs or 'flea' markets and other second hand markets.
My father always had a pocket full of cash and so did I in the days we were building houses. Most traders did prefer cash because it was and is quicker and easier than anything else if you need to buy materials and other odds and ends during the working day. In fact up to the early seventies there were still things like wage packets and people were paid with real cash money! (Pound notes are not 'real' money; they are promissory notes. It is written on every bank note - 'I promise to pay the bearer on demand the sum of £xyz')
I still pay for everything with cash as far as possible. In fact I have forgotten the pin number for my credit card; if I use it at all it is for buying on line. Last time I used it outside was to buy a second hand car - half cash and half card! I suppose I would get arrested if I tried to do that now :)
Will we all be forced into this plastic world or will enough people resist? And is it as widespread as the papers are telling us because I have seen contradictory articles saying that there is still £x billion in notes in circulation.
As my grandfather used to say when he looked at the state of the world "I'm glad I'm on the way out!" and then start laughing at the absurdity of life. I am pleased to say I have inherited his sense of humour!
_____________________________________________
Sackerson says:
The Bank of England responded to a Freedom Of Information request several years ago, saying:
"The link with gold was finally broken in 1931 and since that time there has been no other asset into which holders have the right to convert Bank of England notes. They can only be exchanged for other Bank of England notes. Nowadays public faith in the pound is maintained in a different way - through the Bank's operation of monetary policy, the object of which, by statute, is price stability."
Faith and trust are in short supply these days; and "price stability" doesn't mean what it used to. The BoE says:
"Monetary policy affects how much prices are rising – called the rate of inflation. We set monetary policy to achieve the Government’s target of keeping inflation at 2%.
"Low and stable inflation is good for the UK’s economy and it is our main monetary policy aim."
To keep pace with target inflation (and how is that measured? RPI? CPI? Something else?) you need your bank account to give you 2.5% per annum pre-basic rate tax - on all your savings, not up to some wretchedly low limit.
Money used to be a store of value. For centuries, a loaf of bread was a penny. And as I said a few years ago:
"The Bank of England's website has a page that lets you calculate cumulative inflation for any period from 1750 onwards. According to them, a basket of goods and services costing £1 in 1750 would have cost (the equivalent of) £1.80 in 1900 - an average annual inflation rate of 0.3%. That period covers the tremendous increase in productivity introduced by the Industrial Revolution and further late-nineteenth-century scientific and technological developments, so inflation is not needed for business and prosperity."
Then there's the danger of strangers electronically hacking into one's bank account; and the wholesale spying by retailers and potentially the Government, on all our transactions.
But if you want something worse to worry about, there's the EU's Bank Recovery and Resolution Directive (BRRD). Under this, if a bank is in crisis, it can cut its debt to creditors and/or exchange the debt for a share in the ownership of the bank ("Congratulations! You are now part owner of a dodgy business!")
So what, silly creditors, who'd lend money to a bank, you might think. What many people still don't realise is that their bank deposits are no such thing - money left with a bank is, legally, an investment. And, dear "depositor", you are not first in the queue to be paid when a bank defaults.
If more people understood the implications, they would be a little less likely to leave their life savings in those reassuringly solid marble-and-plate-glass fortresses. This is causing concern in high finance circles, too.
Except holding cash - paper receipts for Nothing At All - is hardly an attractive alternative.
Can you imagine that at a time like this, Canada's comical boy PM sold off the rest of the country's gold? Keynes called gold a "barbarous relic", but it has an intrinsic value - they used to say that "an ounce of gold buys a handmade suit" and that's still pretty much true. Compare that with a rotting paper relic.
Clap hands for Tinkerbell, everyone. Only the power of faith keeps us aloft.
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