rigorousintuition.ca

there was a money-laundering expert on the radio concerning the attached story berating the european monetary authorities for their "stupidity" issuing the 500 euro note ( vs the maximum $100 , £50 notes ).
As there seem few legitimate uses for such notes its interesting to speculate on the extent to which dollar:euro switching in the global drug traffic has been one of the factors weakening the dollar & the degree of intentionality behind this.

Police use a JCB to burst into 'Fort Knox' of £100m drug gang

snip.....

Detective Inspector Martin Ford explained how the gang used a small number of bureaux de change to launder their "dirty money".

He said: "They have been laundering between £3million and £4million a week.

"They will take a suitcase full of £10 and £20 notes and exchange it for 500 euro notes.

"The beauty of the 500 euro note is that it's the highest denomination that is universally accepted.

"So they can convert a suitcase-worth of sterling into a quantity of euros which will fit in a small box."

http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=514127&in_page_id=1770

Oh yes, this explains why in Cyberpunk Roleplaying the Euro was the universal black market currency, and the only remaining widely used- thou scoffed at- cash currency...



I love it when roleplaying games turn out to be exact pictures of the near future they set out to recreate...Or is it procreate?

Organised crime fears cause ban on 500 euro note sales

By Dominic Casciani - BBC News home affairs correspondent
Thursday, 13 May 2010 04:40 UK

Exchange offices in the UK have stopped selling 500 euro banknotes because of their use by money launderers.

The Serious Organised Crime Agency says 90% of the notes sold in the UK are in the hands of organised crime.

Soca deputy director Ian Cruxton said 500 euros had become the currency of choice for gangs hiding their profits.

The move means nobody will be able to buy the note in the UK - but travellers will be able to sell them if they enter the UK carrying them from abroad.

There has been mounting international concern over the note, which is worth more than £400, and its use by criminals or tax evaders.

Massive sums

Soca says that an eight-month analysis of movements of the note in the UK revealed that it was almost exclusively used by money launderers shifting cash for major crime gangs.

DISAPPEARING CASH
£1m in £20 notes weighs 50kg
Equivalent in 500 euros weighs 2.2kg
One cigarette packet can easily conceal 20,000 euros
Spoils of crime become easier to smuggle
The British trade in the notes is thought to be worth some 500 million euros - but less than 10% of them are bought by legitimate tourists and business travellers. Financial crime investigators concluded that there was no credible or legitimate use for the note in the UK.

Instead, gangs are reportedly shifting massive sums of sterling, typically from drug dealing, through "front" exchange businesses.

Ian Cruxton, deputy director of Soca, told the BBC that the banknote had been secretly withdrawn from sale on 20 April.

"When criminals want to move a bulk of cash inside the UK and, more importantly, out of the UK, one of the best ways to do that is to reduce the bulk massively both physically and in terms of the risks they pose of discovery," said Mr Cruxton.

"The 500 euro note is really the note of choice among criminals.

"It should now be impossible now to buy a 500 note over the counter from one of the suppliers. And that's going to have an effect on the criminals - it means they are going to have to find other means of trying to move their money."

There have been widespread concerns among law enforcement agencies over the role of the 500 euro in money laundering, concerns that are identical to those raised about other similar high-value notes around the world.

The European Central Bank created the note at the time of monetary union to replace high value notes which were popular in some of the Eurozone countries.

How the 500 euro is financing a global crime wave of cocaine trafficking, the black market and tax evasion

www.dailymail.co.uk

By CAROLINE GRAHAM in COLOMBIA and ADAM LUCK in LONDON

Last updated at 10:01 PM on 30th January 2010


The 500 euro is the world's most powerful banknote. Beloved by black marketeers, it is also financing a global crime wave. Live investigates the dark side of the note that's so big...


Why has the 500 euro note become so central to the drugs trade? It is easier to conceal - drug barons can hide very large sums in very small bags, and the value of the euro has grown; not only is it more stable than the dollar, it's worth more, too

The fetching pink-and-purple 500 euro note has many fascinating features. Completing the architectural themes which begin with the classical depictions of the humble 5 euro note, the 500 sports a window in the modern style on the front, and a stylised version of the Pont de Normandie in France on the reverse.
It is also dripping with security measures as befits the world's second-highest denomination note (only the little-used 1,000 Swiss Franc has a higher value): watermarks, hologram strip, reflective glossy stripe, EURion constellation, matted surface, bar-codes, ultraviolet ink, perforations, raised printing, colour-changing ink and a serial number.

It also has its own nickname: it is called the 'Bin Laden' - you know they're out there, and you know what they look like, but no one ever sees them.
No one, that is, except the scruffy Peruvian with a Mickey Mouse backpack who was being observed by a Chilean undercover police team as he sat patiently on the pavement in bustling downtown Santiago.

The man had a five o'clock shadow, stained jeans and well-worn trainers. He had flown in from Lima early that morning and now leant against the peeling green-painted exterior of the shabby Costa Brava casa de cambio (bureau de change) in Augustinas Street, waiting for it to open at 9am.

Inside his tiny backpack was 600,000 euros (around £520,000), all of which was in the distinctive pink 500 euro banknote. None belonged to him. He was simply a 'smurf', or money-laundering courier, and had been paid £1,000 for his errand.
No one looked on with greater interest than Christian Caamano, head of the financial crimes unit of the Policia de Investigaciones de Chile (PDI). He was steering a five-year investigation called Operacion Suspiro Europeo (Operation European Sigh) which eventually broke a £120 million euro-laundering scheme.
In his corner office in the turn-of-the-century monolithic police headquarters near the Chilean presidential palace, he shakes his head and smiles.
'This man took our breath away. He looked like a tramp. If any of the passers-by rushing to work that day had known his backpack was stuffed with so much money, he would probably have been robbed.


A drugs bust in Cali, Colombia uncovers large amounts of 500 euro bills as well as dollars that had been hidden under floorboards and in walls

'Instead, he calmly waited for them to open. Then he handed over the euros, which were stashed away in a huge safe. A few hours later, they were picked up by a second courier. This one got a flight direct to Los Angeles, and put them into a U.S. bank.

'A few days later the money was wired back to a bank in Bogota from the U.S. So by now, the entire money-laundering cycle was complete. It is in this way that dirty drug money gets into the legitimate banking system in the U.S. and Europe.'
Why has the 500 euro note become so central to this trade? Because its ultra-portability has made it the marker of cross-border crime, greasing the wheels of the cocaine trade, the black market and the tax-evasion business.
The logic is simple. The 500 euro is easier to conceal - drug barons can hide very large sums in very small bags. Also, the value of the euro has grown; not only is it more stable than the dollar, it's worth more, too, so even more value can be packed into a small space.
And while the U.S. market for cocaine has slumped, there has been a boom in the UK and Europe, thereby increasing the criminal trade in euros.
Take this fact: according to Colombian financial regulators, in 2006, euros valued at about £200,000 were legally imported and declared as entering Colombia. This would typically have been tourists' money.
Yet the same year, nearly £600 million worth of euros were exported. The vast disparity is because the balance went in undeclared - importers paying for cocaine tend not to fill out currency declaration forms.


Mauricio Mazza is placed under arrest by Chilean police in front of his family's foreign exchange - a front for drug money laundering

And there's this too: in 2006, just four years after the euro had been introduced, the Spanish government revealed that 25 per cent of all 500 euro notes in world circulation were to be found in Spain. It estimates that figure has since risen to 30 per cent. Significantly, Spain is one of Europe's principal conduits for cocaine importation.
In this investigation, stretching from the world's cocaine capital of Bogota in Colombia, to Chile, Spain, West Africa and London, Live has pieced together the latest phenomenon to hit the world's narcotic and money markets.
In simple terms, this report on the inner workings of the globalised underworld confirms the stark belief of Christian Caamano.

'The high denomination 500 euro note,' he says, 'has made it easy for the bad guys.'
Two of the last big high-denomination banknotes were the $1,000 U.S. and Canadian bills. The first was killed off in 1969; the second in 2000. In both cases, the notes were helping organised crime be even more organised.
Police had lobbied intensively against them, arguing that large notes lend themselves to laundering and wider criminal activity.
So you might think it was a hostage to fortune to introduce a 500 euro note in 2002, but the European Central Bank insists that it was only meeting the demands of countries who already had high denomination notes: Germany had a 1,000 Deutschmark note, for example (then worth £300).
Today, of some 776 billion euros in circulation, about 280 billion of the currency are in 559 million individual 500 euro notes. The euro has now become the second-largest reserve currency in the world and has been tipped to knock the dollar off its perch sooner rather than later.



Since 2002, the Eurozone has expanded to include 16 of the 27 European Union states, and to keep up with demand 14 production plants printing euro banknotes are spread across the currency member countries, some being run by central banks and others by licensed private companies.
Production schedules are controlled by the European Central Bank (ECB), based in Germany, in conjunction with the local central banks, and production of the different notes is rotated throughout the countries in the Eurozone. Each member decides for itself how many 500 euro notes it will produce in a year.
All of the central banks have their own vaults, unlike the ECB itself. Criminals too have been keen to build up their stocks of euros and have not been shy of cashing in on the euro to fund their own nefarious activities as well as conceal the origins of their criminality.
They appreciate how the 500 euro notes do not require conversion every time they encounter a national border, and nor do they betray their illicit origins with such ease as a cache of mafia-tainted Italian lire or a bundle of hashish-scented Spanish pesetas.
Increasingly, however, the euro is becoming the currency of choice not just of local crime syndicates but also for international drugs cartels; and especially those that are run by the crime kingpins of South and Central America.
In part, this reflects the increasing prevalence of cocaine across Europe in the last ten years thanks to a surge in use, especially in Spain and the UK according to the UN Office on Drugs and Crime (UNODC), which also reports a decrease in use of the drug in America in the past few years.

Russell Benson, regional director for Europe and Africa of the DEA, says: 'Cocaine trafficking towards Europe has seen a dramatic increase over the last three or four years and we will see this upward direction maintained into the future.

'Colombian and Mexican organisations are looking to increase their market share in Europe. One of the reasons why they see this as an advantage is simply because of the amount of money they can earn from a kilo of cocaine.
'In recent years the value of the euro against the dollar has increased, making it a valuable proposition for these groups of thugs. A 500 euro note is worth around $720: $1 million (£600,000) in $100 bills weighs 22lb - in 500 euro notes just 3.5lb.
'These notes are significantly easier to smuggle back to Colombia or Mexico. Couriers can fit millions into a small bag. You can see why these large denominations appeal to criminal organisations.'
The introduction of the 500 euro note in 2002 was, as one top Colombian drug enforcer said, 'like a gift from the gods for the narco guys. To transport a million bucks of dirty money you'd need a suitcase or two. Now, $1 million in 500 euro notes fits into a backpack. It's made life much more convenient for the drug lords.
'The focus has switched from drugs going from Colombia to the U.S. to drugs flooding Europe. The drug barons of Colombia love the 500 euro. They make much more money for their cocaine in Europe. It sells for roughly twice the amount as in America, and they can hide the money with much less difficulty.
'The drugs go in through Spain, often via West Africa, and then the euros come back out to the drug lords back over in Colombia, in Cali or Medellin or Bogota.'
The problem, however, is what to do with the European currency once it arrives in Latin America. Banking regulations mean that any deposit over $10,000 (around £6,000) in a legitimate Colombian bank automatically alerts the authorities.


Soldiers in Colombia proudly display the large quantities of the distinctive pink 500 euro bills seized in a recent operation against the drug cartels
The UIAF, Colombia's financial regulator, believes 90 per cent of the euro 500 notes currently in circulation worldwide (outside the European Union) are being smuggled into Colombia.
Because anyone walking into a bank with a stack of 500 euros would immediately set alarm bells ringing, scores of unregulated casas de cambio have sprung up all across Latin America: in Chile, Colombia, Ecuador, Peru and Venezuela.
These will exchange foreign currency for local pesos, or courier the notes over to the U.S. to be deposited in a legitimate bank. They then have the money wired back to the drug gang accounts in the home country.
This is exactly what was happening in the case being investigated in Operacion Suspiro Europeo, which revolved around the two brothers Mauricio and Jose Mazza and their cousin Luis Mazza (known as 'the Mexican'). In general the drug lords hire scores of couriers - the 'smurfs' - to carry out multiple transactions.
'Very often the euros will be sent back via smurfs on planes from Spain,' says a DEA source in Bogota.
'They will come in through Venezuela, Ecuador or Peru. Either they change it into pesos at a casa de cambio in those countries, or put it in a backpack to cross into Colombia along the long stretches of the border that are unmanned.
'Sometimes they will spend days travelling through jungles and across rivers with a backpack full of 500 euro notes.
'These are ordinary people who will get only one or two thousand per trip. They will make multiple deposits at several exchange houses so as not to raise suspicions or, if the wholesale currency broker hired by the drug cartels can set it up, they will make a major deposit at a corrupt exchange house that has agreed in advance to take the money.'
In the Chilean case, the Peruvian courier was one of dozens who made multiple deposits at the Mazza brother-owned Turismo Costa Brava exchange house.

According to lead prosecutor Hernan Penafiel, an undercover sting operation was set up after customs agents at Santiago Airport busted a Peruvian smurf who had been found carrying a backpack containing approximately £300,000 in 500 euro notes into Chile in August 2004: 'He told us all about Turismo Costa Brava and the Mazza clan and a secret surveillance operation was put in place. The first bust was by pure chance.'
Basing themselves in a nondescript brick office building opposite the exchange house on Augustinas Street, dozens of officers maintained their stakeout all around the clock.
The euros would arrive via one smurf, would be picked up days (or sometimes hours) later by another courier who would then board a plane to Los Angeles, where they would be deposited in Harris Bank, respected and long-established (it was founded in 1882) and based in Chicago.
From there, the money would be wired back in pesos to accounts controlled by suspected narco traffickers in Colombia. That part of the investigation is still ongoing and further charges are expected.
Penafiel said: 'We discovered a pattern. Every week we watched as a flotilla of Peruvian couriers came into Chile. It was the same modus operandi every time. Same flights, same amount of 500 euros, all to the same casa de cambio - Costa Brava.
'We apprehended the first courier in August 2004. He cooperated with the investigation fully. We traced the serial numbers on the 500 euro notes. They all came from banks in Spain.'
One of the main conduits for the large-denomination euro notes out of Europe has been through the Costa del Sol in Spain. Here they are following the very same routes that the cocaine dealers will have been taking to traffic their product into the increasingly lucrative markets in western Europe.
But the Costa del Sol also offers the opportunity for another and more subtle process of money-laundering through Spain's property industry, which was burgeoning for many years until the effects of the credit crunch.
A study by the Malaga Criminology Institute illustrated the link between real estate developments on the Costa del Sol and illicit - or at least inexplicable --sources of large-denomination euros. Antonio Verchet, who is one of Spain's senior prosecutors on environmental crimes, has noted that 20 alleged drug syndicate leaders who had been arrested had all had their own real estate firms. Given these facts, it no surprise that so many 'Bin Ladens' are swilling around the country.
This complex flow of money has created problems for law enforcement agencies across Europe and the Americas. However, it has also given their detectives new opportunities to break cases.
Russell Benson says that the DEA has recently been focusing not on trying to stop the drugs - an increasingly hopeless task - but on 'following the money' on the return journey. The aim is to cut off the cashflow from the criminals and so cripple the cartels' ability to oil the wheels of supply and demand.
Worringly, the DEA has lately come to believe that the appeal of the large-denomination euros is not just restricted to the drug traffickers of Latin America and their trade in Europe.


A 'smurf' is found carrying 'Bin Ladens' after his arrest in Bogota in December last year - police had got a tip-off about an operation on the Chile-Colombia route

In December 2009 three alleged Al-Qaeda members were arrested in Ghana after a lengthy sting operation involving the DEA. An agent went undercover to pose as a member of the Colombian revolutionary organisation FARC, which has long been known to fund its activities through cocaine trafficking.
Oumar Issa, Harouna Toure, and Idriss Abdelrahman claimed, according to US court papers, that they were members of the group Al-Qaeda in the Islamic Magreb (AQIM) and that they could shepherd FARC cocaine shipments from the west of Africa to the north and then on to Spain.
Russell Benson of the DEA said: 'We have seen the rise of euros being used by traffickers in West Africa, and in this particular case these men wanted to charge our undercover operative in euros for each kilo that was being transported.'

Britain's Serious and Organised Crime Agency (SOCA) has also become increasingly focused on large-denomination euros as the currency of choice for criminal cartels.
David Thomas, head of SOCA's UK Financial Intelligence Unit, says: 'Serious organised crime groups have developed a taste for the euro. They can move the high denominations that they have accumulated down towards Spain before it is shipped over to Europe.
'We used to call them "boomerang euros" because they would be shipped from Europe over to South America, then back up to Miami and finally back over to Europe. But even by the time it reaches the U.S. the money has been stripped of criminal value, which is what makes it so difficult for U.S. prosecutions.
'I like to explain laundering money using the image of a bucket. At the beginning of this process the bucket is full of criminal value, but as it is passed along the line a little bit more of that criminality is spilled each time.
'At various points the money may be changed again or it may be swapped for goods or services - protection, houses, or cars for instance. By the time it reaches the end of the line it has been stripped of all criminal value. The money might be tainted but it is too late for us. We need to move earlier in the chain.'
More and more law enforcement agencies are having to broaden the front against drugs.

'The UK market in cocaine is still on the increase,' says Thomas Pietschmann, the leading expert on cocaine at the United Nations Office on Drugs and Crime, 'but now euros are increasingly being used as well for the heroin trade.'
The suspicion is that the 500 euro note is playing a vital part in a criminal operation with links even to the poppy fields of Afghanistan.
Britain's role in the far from virtuous circle of laundering doesn't just encompass the sale of drugs and the funds this generates. There is evidence that British gangs have been using bureaux de change in London for changing sterling into euros. The UK involvement in the intimate relationship between international crime and Europe's highest-denomination note is highlighted by the extraordinary facts that came to light in a court case in Miami in 2008.
Almost £9 million worth of high-denomination notes, nearly all 500 euros, were seized from an American Airlines flight from Bogota. American federal agents believe that this was just the tip of the iceberg, with Miami the transit point for a transatlantic trade that amounted to little short of £1 billion.
The final destination was, according to the U.S. court papers, London Heathrow and the British money exchange house TTT Moneycorp.
This route started with drug traffickers taking their euros to a 'mayorista', or unregulated wholesale currency broker, who then moved the cash onto a small but regulated currency exchange business, before they were passed onto a large regulated government-run exchange house.

From there the cash was to be flown to Miami, and then to London, where the pattern has been to exchange it into dollars before transferring it via the U.S. banking system to Colombia's regulated money exchanges. Finally the plan would be for it to be realised as Colombian pesos.
A TTT Moneycorp spokesman said: 'This currency had not actually reached us. We take money-laundering very seriously and we are at the top end of our business when it comes to controls and procedures so we do not get involved in this.'
The only people, it seems, who do not accept a link between the note and crime are the European Central Bank.

'The ECB refuses to accept that 500 euro notes should be scrapped,' says a spokesman at the bank.
'You can argue that U.S. currency notes are being used by narcotics gangs. Should dollars be stopped because they are used for certain things? There is no evidence that certain bank notes are used by criminals or made to satisfy this market.'
But he also adds, 'There will be an ongoing debate about whether certain notes are needed. Some advocate the scrapping of the 500 notes because they are rarely used, and in some countries hardly anyone pays with them. But there are no plans currently to change the notes we have in circulation.'
At least while the 500 euro note continues to be printed and circulated it helps the police 'follow' the trail. Witness how it bore fruit in compiling the police case against Mauricio Mazza over more than two years, a joint investigation between the U.S., Colombia, Peru and Chile.
Lead prosecutor Hernan Penafiel explains: 'It took time because it was a particularly complicated investigation at the Colombian end. The money was being laundered through multiple casas de cambio in Colombia, making it extremely hard to trace the source of the cash.'
Mazza was eventually arrested in the U.S. as he entered Los Angeles in March 2007. He was tried in New York and convicted in January last year on three counts of unlicensed operation of a money exchange. In September he was sentenced to three and a half years in prison and given a $10 million (£6 million) fine.
He is currently in a New York jail and remains under investigation in Chile. Mazza is expected to be extradited at the end of his jail term in the U.S. and face further charges in Chile.
'I worked out a deal with the prosecutor,' says Bernard Alan Seidler, former attorney for Mazza.

'It permitted him to go home to Chile but he wanted to stay and fight the charges. He didn't seem anxious to go back to Chile. You can draw your own conclusions on why that might be.'
From 'the bunker', the heavily fortified concrete building in the south of Bogota that houses the judicial prosecutors, to the authorities in Chile, Spain, the UK and the U.S., attention is turning away from greenbacks to the pink 'Bin Ladens'. And the stakes are getting ever higher.

semper occultus wrote:The problem, however, is what to do with the European currency once it arrives in Latin America. Banking regulations mean that any deposit over $10,000 (around £6,000) in a legitimate Colombian bank automatically alerts the authorities.

Is this not also true for US banks?---that cash deposits over $10,000 are flagged for scrutiny? And paperwork etc.

If so, then would not Harris Bank, "respected and long-established (it was founded in 1882) and based in Chicago" take 'note' and alert the authorities?

The EU central bank's resistance to ending the 500 euro note is interesting. The illicit circulation must certainly help their currency, but are they outright players in the drug biz as well?

The role of large US banks in laundering South American drug money has been covered in another thread here; they keep doing it and doing it and getting away with it.

It seems at the top levels of international 'drug enforcement' there's an effort not to wipe out drugs, but to wipe out the competition.

Elvis wrote:If so, then would not Harris Bank, "respected and long-established (it was founded in 1882) and based in Chicago" take 'note' and alert the authorities?

....yeah Harris Bank may be long-established but respectable ? ....maybe , using the term "respect" in the Don Corleone sense...

RAHM EMANUEL --- Foreign Exchange Crook for the Red Chinese?

By Sherman H. Skolnick

www.rumormillnews.com

Producer/Moderator, Public Access Cable TV Program "Broadsides"

Since 1963, Founder/Chairman, Citizen's Committee to Clean Up the Courts

With his intense, fiery eyes, Rahm Emanuel scares some people. And some say he also arranges to bribe, blackmail, and even cause the political murder of others.
......
Knowledgeable sources in law enforcement and espionage consider Rahm Emanuel, because of his sinister background and activities, to be, in effect, the unofficial deputy chief for North America of the Mossad, Israeli intelligence.
.....
As a clandestine fund handler, Rahm Emanuel is considered an expert in what currency traders call ForEx, foreign exchange. The leading foreign exchange and currency trading unit in the world is considered as Chicago-based Harris Bank, a unit of Bank of Montreal owned by the whiskey barons and reputed major dope laundry operations, the Bronfmans. They own now a major portion of the long-mob-linked music and entertainment business, such as MCA.

The previously mentioned mysterious 50-million-dollar transfer arranged by Household Bank and Household International was facilitated then, and thereafter, through Harris Bank's ForEx Unit. As part of the cover-up, Harris Bank in 1996 took over units of Household Bank.

As foreign exchange and currency traders were well aware, the strange 50 million dollars is a sort of gambling casino chit going in and out of records, in and out of the U.S. and showing up in all sorts of places. For example, when Prince Charles divorced Princess Diana, or vice versa, he did not want to touch his royal assets in paying her off for silence. What did he do? Why, he obtained a "loan" of 50 million dollars for Household Bank-London, utilizing the same all- purpose chit for book entry purposes.

On October 15, 1998, this writer accompanied Joseph Andreuccetti, confronted the U.S. head of Harris Bank's Risk Control unit regarding the unauthorized transfer of funds rightfully belong to Andreuccetti, the selfsame 50 million dollars. When the unit chief was informed of some of the foregoing details implicating Bill and Hillary Clinton and others, to be the subject of an upcoming Cable TV one-hour program by this writer, well the unit chief said there would be an "investigation." The unit chief, however, made a demand that no investigative reporter would comply with in advance of the program: that I name, for example, who in Harris Bank's Foreign Exchange unit, were part of the criminal scheme of the secret 50-million-dollar transfer. And a demand that I name my sources.

The Risk Control unit is just as fancy term for internal and external investigations by the bank of forgeries, embezzlements, and other criminality. We were not informed what safeguards, if any, the Risk Control unit has if the criminality implicates the bank bosses themselves.

In a blurb in the press, it was mentioned that Rahm Emanuel, in leaving the White House, is returning to Chicago to be a purported "investment banker." Rahm Emanuel is to play reportedly a key role in ForEx, foreign exchange and currency trading with a Chicago- based firm. Principals in the firm are apparently interwoven in what appears to be smelly, if not criminal, deals with the Red Chinese. One or more principals of the firm travel to Red China every few weeks supposedly to push for the collection of funds and assets Red Chinese government officials and others are withholding from the firm or are slow in conveying or paying to the firm.

Apparently to either evade IRS and other detection of transactions, huge sums, disguised as foreign exchange, are traveling in and out of the U.S. disguised as being indirectly linked to certain introducing brokers of the firm; that is, those who get a free or commission for steering business to the firm.

Some of the introducing brokers vigorously contend that they were not informed and did not know that apparently illicit Red Chinese funds were travelling in and out of the foreign exchange apparatus of Harris Bank, through the selfsame trading firm. The transactions are reportedly disguised as left-over amounts of soybean trading and currency swaps. Unknown, IBs say, indirectly linked to them --- with no knowledge of introducing brokers.

The commodity and currency trading firm reportedly called a meeting of their introducing brokers, called IBs, to inform them that Rahm Emanuel in short order will become their boss and have misgivings about him based on their perception that he is a high-level crook interwoven with massive Red Chinese corruption through the Chicago markets and Harris Bank's ForEx unit.

To overlook their hesitations, some IBs apparently are being offered inducements that some may contend are bribes or blackmail, such as records not supposed to exist being turned over to tax collectors and others in the federal Gestapo.
....
Some suspect that Rahm Emanuel's usefulness as foreign exchange and currency expert is that he is perceived as having immunity from the prying eyes of IRS, the FBI, and others in federal police. And that the Red Chinese if they have not already used him in the past, intend to reportedly use him to launder billions of dollars of dirty trading, some already flowing through the Chicago markets with Clinton's blessings and that of his handlers.

Is it just a coincidence that CIA terrorist Osama bin Laden has numerous accounts in the Harris Bank Chicago; that the Clinton White House says they would freeze his accounts but cannot find them? And is it just a coincidence that this "terrorist" has hundreds of millions in the construction business jointly with Sharon Percy Rockefeller's family? She is the wife of Jay Rockefeller (John D. Rockefeller 4th), who itches to be President without an election.

The leading foreign exchange and currency trading unit in the world is considered as Chicago-based Harris Bank, a unit of Bank of Montreal owned by the whiskey barons and reputed major dope laundry operations, the Bronfmans.

Good old Sherman Skolnick. I've never known how to feel about him.

Speaking of old school, the link between the Montreal whisky men and Chicago. A union made during the previous war on drugs that minted money and solidified the power of the syndicate.

.......not exactly hot news....googling something else entirely

Mafia Cash Increases Grip on Sinking Italy Defying Berlusconi
By Steve Scherer and Vernon Silver - May 26, 2009 18:01 EDT

http://www.bloomberg.com/apps/news?sid=aHtly5QjUYzo&pid=newsarchive


Roberto Scarpinato, an anti-mafia prosecutor

May 27 (Bloomberg) -- In the southern Italian port city of Palermo, home to bustling outdoor markets and Arab-influenced architecture, prosecutor Roberto Scarpinato has hunted Mafia money for two decades.

Now, as the rest of the world tightens its belt in the global recession, he’s tracking how the mob is profiting by lending and investing what’s become a scarce commodity these days: a growing hoard of cash.

Scarpinato points to the 2.7 billion euros ($3.8 billion) of assets he’s seized on the island of Sicily, where Palermo is located, since the start of 2008. In one haul, he confiscated 12 businesses, 220 buildings, 33 plots of land and a 25-meter (82- foot) yacht from grocery-chain owner Giuseppe Grigoli.

Known as Sicily’s king of supermarkets, Grigoli, 59, is on trial in Marsala for running the food stores and other enterprises at the behest of the Sicilian Mafia. He denies the criminal charge of being a member of an organized crime group.

Unlike overleveraged companies burned in the credit crisis, the Mafia and its cash-based, debt-free business model are breezing through economic hard times. With young, savvy leaders at the helm, organized crime is poised to expand as legitimate companies founder.

“There’s a risk that Mafia organizations can profit from the current crisis by buying control of struggling businesses, infiltrating all regions of the country,” Italian President Giorgio Napolitano cautioned in May.

Grocery Connection

Not even billionaire Prime Minister Silvio Berlusconi, who’s won praise for his response to Italy’s deadly April earthquake and has vowed to keep the Mafia out of reconstruction contracts, has been able to control the mob and its riches. This year, Berlusconi’s government has proposed legislation to make it easier to seize assets from organized crime.

Grigoli’s grocery operation and its alleged links to the Mafia and money laundering represent just a slice of the estimated 130 billion euros in annual revenue the mob handles. Some of the money is making the rounds via easy-to-transport 500-euro bills as far away as South America.

Italy’s three main organized-crime groups had combined net income of 70 billion euros last year, producing a 54 percent profit margin, according to Rome-based research institute Eurispes. Exxon Mobil Corp., the world’s biggest publicly traded oil company, had a profit of about half that at $45.2 billion.

Bodyguards, Pistols

“There’s a credit crisis that’s putting many businesses in a difficult position,” says Scarpinato, 57, whose dark suit sets him apart from his jeans-wearing bodyguards who tote pistols under their black-and-blue windbreakers. “The banks have tightened the purse strings, and many companies risk going bankrupt. Then there’s the Mafia world, which has vast amounts of cash.”

Prosecutors opened a window on how the Mafia was positioning itself for financial expansion in 2006, when police captured Bernardo Provenzano, the Sicilian Mafia’s boss of bosses. Credit markets worldwide began to freeze in late 2007. By then, Provenzano had helped a new generation of mobsters secure a foothold in the legitimate economy through mainly cash- based operations such as food distribution.

Today, as weakened banks get government stress tests, corporations slash jobs and families struggle to recover amid the economic rout, Italian organized crime is enjoying the fruits of its liquidity.

‘Ramping Up’

“The Mafia is ramping up its investing,” says Antonino Di Matteo, a fellow Mafia prosecutor whose bodyguard stands watch outside his office door in the Sicilian capital’s fascist-era courthouse. “The Mafia’s financial managers are trying to invest now, while the time is right, so that they can launder their fortunes once and for all.”

Italy’s cash-depleted banks may be helping the Mafia become even stronger, says Antonio Maria Costa, executive director of the United Nations’ Vienna-based Office on Drugs and Crime.

The country’s four biggest lenders -- UniCredit SpA, Intesa Sanpaolo SpA, Banca Monte dei Paschi di Siena SpA and Banco Popolare SC -- are planning to raise more than 9 billion euros to weather the financial crisis by selling convertible bonds to the government.

On May 6, the Bank of Italy, which regulates lenders, cautioned that banks have lowered their guard against money laundering. The central bank plans a new set of anti-laundering rules to classify, monitor and collect data on clients.

In one of Scarpinato’s investigations, UniCredit Suisse Bank, a UniCredit unit based across the border in Lugano, Switzerland, was the apparent destination for 450,000 euros he eventually seized from another Sicilian grocery store owner. UniCredit spokesman Marcello Berni says the bank declines to comment on matters involving individual clients.

Fake Bonds

On May 22, Palermo prosecutors busted an alleged Sicilian Mafia ring that had tried and failed to use fake Venezuelan bonds as collateral to borrow $2.2 billion from HSBC Holdings Plc, Bank of America Corp. and unnamed British banks. The two banks declined to comment.

Italy’s three main organized crime groups divvy up a big chunk of southern Italy. The Sicilian Mafia, or Cosa Nostra, is the most tightly knit. It’s the inspiration for the American version of the mob, says Salvatore Lupo, a history professor at the University of Palermo.

The Campania region’s Camorra is centered in Naples. It’s made up of independent Mafia families who control neighborhoods or towns. Roberto Saviano’s 2007 book “Gomorrah” (Farrar, Straus & Giroux) and the movie a year later have brought the Camorra into the public eye.

‘I Sell Money’

Investigators consider the third group, the Calabria region’s ‘Ndrangheta, to be Europe’s biggest cocaine traffickers. Its name comes from a word for a network of ‘ndrine, or clans.

Italy’s black market lenders have already stepped in to provide financial services.

“I sell money,” alleged loan shark Vincenzo Senese told a businessman who was trying to raise funds for a startup venture, according to the transcript of a phone call included as evidence from Senese’s Rome arrest warrant on charges related to drug trafficking.

High-interest lending to consumers and businesses posted the biggest gains among illicit commercial activities in Italy last year. Such loan-sharking jumped 17 percent to 35 billion euros, according to SOS Impresa, a Rome-based business group that fights extortion.

People shut out from legitimate lenders paid as much as 730 percent annual interest, outstripping the high of 440 percent SOS Impresa documented in 2007, according to evidence from criminal cases compiled by the organization.

Loan Shark

One desperate borrower is Maurizio Vara. On a sunny morning in March, he’s avoiding eavesdroppers in the back corner of an outdoor cafe in Mondello, a beach town outside Palermo. As a tabby cat naps on a table beneath a nearby magnolia tree, the 40-year-old hotelier and construction contractor explains that banks aren’t lending to entrepreneurs in the economic downturn.

Like countless Italian business­people, he turned to a loan shark as his business faltered.

“I haven’t been able to get credit from banks,” says Vara, who has wraparound Fila sunglasses perched atop his balding head. His loan shark sent thugs to collect the 45,000 euros he owes.

“I want to pay,” says Vara, who says he doesn’t have the cash. “I’ve lost my future.”

Unlike traditional lenders, the mob has no qualms about resorting to violence, says Alberto Caperna, a Rome prosecutor who’s pursued usury cases for 20 years.

Broken Teeth

“A bank can’t break all of your teeth if you don’t pay,” he says as he chain-smokes Merit cigarettes in his modern office near the Vatican.

As strong and feared as the Mafia is now, it’s angling for greater riches and influence once the economy rebounds, Scarpinato says. Italian organized crime groups invested 26 billion euros in industries including tourism, restaurants, car dealerships and fashion last year, according to SOS Impresa.

Senese’s son Michele used his cash to muscle in on an auto dealer in Genzano di Roma, south of the capital, according to the arrest warrant in a pending case in Rome. The owner needed capital. He also wanted Senese’s thugs to pressure another dealer to pay off a debt, according to the allegations.

While the Mafia and its hardball tactics are fixtures in popular culture, mobsters’ modern business model has emerged only in the past few years.

New Generation

In the late 1990s, younger family members with formal educations began taking the reins from older Mafiosi, says Pietro Grasso, Italy’s chief anti-Mafia prosecutor. Provenzano, 76, who was captured in a two-room shepherd’s shack, never finished second grade. By contrast, Giuseppe Guttadauro, a convicted mobster and head of a Palermo crime family, is a surgeon.

Guttadauro, 60, is part of a generation that includes his brother’s brother-in-law, Matteo Messina Denaro, a rising star who’d reported to Provenzano.

Under the old business strategy, the ‘Ndrangheta made its money in the 1970s by collecting ransoms for kidnappings. It grabbed the spotlight with its suspected involvement in the 1973 abduction of oil billionaire J. Paul Getty’s grandson John Paul Getty III.

It has since transformed into a multinational cocaine- trafficking syndicate with members posted in South America. Those overseas representatives buy cocaine wholesale and then organize shipments to Europe to other Mafiosi in Spain, Holland and Italy, Grasso says.

Cocaine

Steered by its younger leaders, Italian organized crime has taken over most of the European portion of the global $320 billion cocaine trade for 2009, says Russell Benson, the U.S. Drug Enforcement Administration chief for Europe and Africa. He says investigations show that the ‘Ndrangheta then invests its cash as far away as Canada and Australia.

“There’s a tsunami of cocaine coming to Europe,” Benson says, sitting at a mahogany table in a room with 6-meter-high ceilings at the U.S. Embassy in Rome, where he’s based. “They’re out to make a profit and invest that profit in businesses throughout the world.”

The new Mafia bosses are poised to put some of their money into financial markets. They’ll probably behave much like any investor who looks for good deals in stocks and bonds, says Ivanhoe Lo Bello, chairman of Banco di Sicilia, a Palermo-based unit of UniCredit, Italy’s largest bank.

Mafia members invest anonymously by handing their cash to frontmen -- sometimes known as gatekeepers -- who place the money in accounts held in the names of corporations or other people untraceable to the Mafiosi, Italian investigations show.

Mob Investors

“Mobsters care about their money, and they try to invest wisely,” says Lo Bello, who was born and raised near Syracuse in Sicily. “They are invested in international financial markets, more or less anonymously, or in their own territory through people who are known in their sectors as legitimate businesspeople.”

During Provenzano’s arrest, police discovered more than 200 letters, known as pizzini, which helped shed light on the Mafia’s tactics. The correspondence written to him and a few of his own letters were carefully organized next to an electric typewriter in Provenzano’s hide-out.

Through the notes, Provenzano mediated disputes, distributed cash and communicated with the outside world during his four decades on the run. He didn’t trust telephones or computers, which can be tapped and traced.

‘The Godfather’

Until Provenzano was captured, the Sicilian Mafia had been controlled by his Corleone clan, based in the town south of Palermo that gives the fictional family of Mario Puzo’s “The Godfather” its name. His arrest marked the end of the Corleone crime family’s grip on Cosa Nostra. More important for the new generation of mobsters, it opened the gates for expansion.

Under Provenzano’s rule, younger Mafiosi with global ambitions were on the verge of starting a war over who would control legitimate local businesses, including food markets, the notes show. Among the junior bosses was Messina Denaro -- today one of Italy’s 30 most-wanted fugitives and the highest-ranking Sicilian Mafia boss at large.

Messina Denaro, 47, has been on the run since 1993, when he was sought for participating in bombings that killed 10 people in Florence, Milan and Rome. The blasts targeted Italian cultural sites, including Florence’s Uffizi Gallery, the home of Sandro Botticelli’s painting “The Birth of Venus.” The attacks were an attempt to force the state to ease its use of solitary confinement for mobsters imprisoned in Italy.

‘Diabolik’

A year earlier, Palermo prosecutors Giovanni Falcone and Paolo Borsellino were assassinated in separate bombings.

During his time in hiding, Messina Denaro has strengthened his hold on Mafia business and enhanced his legend as a fashion- plate villain, Scarpinato says.

Unlike Provenzano, who wore jeans and wool sweaters while living as a fugitive, Messina Denaro is known for his Giorgio Armani and Versace suits. His nickname, “Diabolik,” comes from a character in an Italian comic book series, a thief who’s embedded machine guns in the hood of his black Jaguar sports car -- something that Mafia turncoats say Messina Denaro told them he admired.

Provenzano went by the less-glamorous nicknames of “Tractor” for his ability to roll over enemies and “The Accountant” for his skill in dividing up money.

Messina Denaro and other bosses pioneered the financial structure that’s benefiting the mob in today’s recession, trial documents of cases in Sicily based on Provenzano’s pizzini show.

‘A Clean Face’

Food stores were an entry point to that network. The Mafia controlled the distributor from which a market bought its merchandise. The distributor, in turn, handpicked the growers and suppliers. Mobsters, who made their cash from the drug trade, loan-sharking and extortion, pumped the money through the stores and onward through the network.

Shopping centers and supermarkets are attractive investments for all of Italy’s crime syndicates, investigations in Calabria, Campania and Sicily show, Grasso says. With a hand on the whole chain of commerce, the mob could set prices to regulate the market and position itself to prosper during hard times.

Messina Denaro, whose letters to Provenzano were among the pizzini found, laid out the food-store-based business plan.

“You have to find a clean face, someone who has never been in trouble with the law,” he wrote. He mentioned Grigoli, the market owner who’s on trial, referring to him as his paesano, or townsman. Grigoli had a license to run stores under the Despar brand of Amsterdam-based Spar International, which calls itself the world’s largest retail food store chain.

Muscling In

“As soon as you have found this person, I’ll tell my paesano” -- meaning Grigoli -- “to buy the outlet in your town and kick out the current owner,” Messina Denaro wrote in a message dated May 25, 2004.

Grigoli denies being part of Cosa Nostra. He says he was a victim of extortion, according to Paolo Tosoni, one of his lawyers. In Sicily, it’s inevitable for the Mafia to try muscling in on businesses. That’s what happened to Grigoli, Tosoni says.

“He doesn’t deny having been in contact with some lower- level criminal figures,” Tosoni says. “He didn’t benefit from this relationship. On the contrary, he did nothing but pay.”

Police Bug

The Mafia’s ability to mix illicit and legal funds from cash-based businesses has multiplied its power, Scarpinato says. Another of his cases involved a chain called Sisa SpA. The Sicilian Mafia used Sisa stores to invest and launder criminal money, according to the asset seizure request Scarpinato filed in November against the estate of Paolo Sgroi, the late owner of some of the chain’s stores.

Scarpinato won court approval to seize 250 million euros from the estate as part of his recent 2.7 billion euro haul. The evidence he’s uncovered indicates that millions more have already made it into the global financial system.

Scarpinato got a break on April 29, 2006, when Sgroi and his wife, Monica, were driving to the Palermo airport in their Mercedes-Benz car. A police bug picked up their conversation as they concocted an alibi for the 450,000 euros they’d stashed in their luggage. If caught while boarding their flight to Milan, they’d tell the police they were smuggling the cash to evade taxes, Sgroi said.

His wife agreed, rehearsing the scene: “‘Where are you going?’” she said, playing an airport official. “To the Virgin Islands or Caymans,” she answered as herself.

Smuggler

Tax evasion would have been a minor offense compared with what Italian prosecutors say the couple was really up to. Sgroi’s bag contained the profits of organized crime, including some that probably belonged to a Sicilian Mafia fugitive convicted in Italy and Switzerland of money laundering and drug trafficking, according to the asset seizure request.

Sgroi and his wife landed in Milan with the money, rented a Renault Megane at Linate airport and drove to find a Polish man who’d agreed to ferry the cash across the border to Lugano. Paolo Sgroi and the Pole met in front of a bar on Viale Beatrice d’Este, near Bocconi University.

The man, carrying an apparently empty black briefcase, walked up to Sgroi, according to an account of police surveillance in the seizure request. Sgroi called his wife, who met them at the front door of their Milan apartment. The pair handed over a white plastic bag of cash.

When police pulled over the smuggler’s car heading toward the Swiss border, he was traveling with his wife and their 8- year-old son as decoys. The 450,000 euros was in the white bag in the trunk.

Swiss Bank

The planned destination for the cash was UniCredit Suisse Bank, the Polish man said, according to court documents. Sgroi told investigators the money drop was to evade taxes and that it was his money, not the Mafia’s. The UniCredit bank account Sgroi was aiming for already had 1.7 million euros in it, Scarpinato found.

Prosecutors who seized Sgroi’s estate allege he aided Cosa Nostra and attempted to launder money for the group. Cosa Nostra probably controlled part of his supermarket chain as a shadow investor, the seizure document says. Neither UniCredit nor its employees were charged with any crime.

Sgroi’s estate denies the charges, says Ernesto D’Angelo, a Palermo lawyer representing Sgroi’s family. The supermarkets were his, as was the money he was trying to take to Switzerland to avoid taxes, the lawyer says.

500-Euro Bills

“All of his assets were obtained legally, including what was found abroad,” D’Angelo says of Sgroi. He says Sgroi had been forced to pay extortion money to the mob. “We hope the court recognizes the fact that he was a victim,” D’Angelo says.

The contents of Sgroi’s money bag show how cash plays a role in the Mafia’s new business model. Half the money was in 500-euro bills, a denomination that was first circulated in 2002 with the introduction of the common European currency.

Today, the purple note with its depiction of 20th-century architecture is a symbol of the Italian mob’s increasing reach, the DEA’s Benson says. The bills, worth about $690 each, are hard to spend in shops in Europe. Yet they’re easy to transport. A million dollars in $100 bills weighs about 22 pounds (10 kilograms), while $1 million in 500-euro bills weighs about 3.5 pounds, Benson says.

Those bills are turning up in drug busts in Colombia and Mexico, giving Mafia hunters like Scarpinato another means of tracking the mob’s cash flow.

Scarpinato says this new evidence shows that Italy’s crime syndicates pose a growing threat to the global economy, particularly in its weakened state. He says he worries that once the recession ends, the Mafia will have sunk its hooks into scores of new markets and businesses, magnifying its financial clout.

“The Mafia isn’t part of the past, it’s part of the future,” the prosecutor says. “Organized crime has evolved. It has become the criminal protagonist of the third millennium.”

Thanks for posting, fascinating stuff.

These €500 notes are so prized by Chinese gangsters in Paris that they offer up to €50 a note. Hostage-takers in Asia and Africa now demand ransom in €500 notes rather than dollars.

“I don’t understand why we’re still making €500 banknotes,” Jean-Baptiste Carpentier, the director of Tracfin, the unit that fights money-laundering at the French finance ministry, testified last year. Most French shops accept neither €500 nor €200 banknotes.

Calls this to mind:

France: A New Hard Line on Kidnappings?

Since 2003, militants in North Africa have regularly kidnapped Westerners, including French nationals. The militant group most responsible was the Salafist Group for Preaching and Combat (GSPC), which merged with al-Qa`ida in 2006 and was renamed al-Qa`ida in the Islamic Maghreb (AQIM) in 2007.[1] In most of these cases, France appeared to negotiate with the hostage-takers.[2] Despite French denials, Paris has been accused of paying ransoms to free French hostages in Lebanon, Iraq, Afghanistan and North Africa. According to former U.S. Ambassador to Mali Vicki Huddleston, for example, France paid a ransom of $17 million in 2010 in an attempt to free four French hostages kidnapped by AQIM.[3]

http://www.ssrresourcecentre.org/2011/0 ... -djibouti/

Since 1977, France has upheld a mutual defense treaty with Djibouti, the historical vestige of a colonial relationship. France pays Djibouti €30 million annually for the right to host a force of 2,900 troops, an agreement due to continue until 2013. The French government estimates that its military expenditure in Djibouti accounts for about 20% of the country’s annual GDP. Two units comprise the Forces Françaises de Djibouti, including the famed 13th Démi-Brigade de la Légion Étrangère. Numbering 800 men, the Foreign Legion has five companies: command and logistics, maintenance, infantry, engineering and an armoured squadron, in addition to a training centre down the coast at Arta. France also has army, marine and air force units stationed in the country, including 10 Mirage fighter jets.

Since September 11th, the American presence has grown rapidly, even inheriting the former French base at Camp Lemonnier. From 2007 to 2012, the US committed nearly $400m for upgrades at Lemonnier and its linked forward operating base at Manda Bay, Kenya. An estimated 2,000 American troops are based in Djibouti, as part of the Combined Joint Task Force-Horn of Africa (CJTF-HOA). The Americans conduct training exercises, for their own troops as well as the Djiboutian army, and are keen to speak of civilian-military cooperation. In the shadows, ongoing anti-terror operations are conducted, but few details are ever released. Combined Task Force 151, under the overall leadership of the US Navy’s Fifth Fleet in Bahrain, is engaged in counter-piracy operations throughout the Gulf of Aden and Somali territorial waters.

As an aside, I also remember this whenever the topic of Somali pirates comes up:

This is London – the capital of Somali pirates' secret intelligence operation

Somali pirates guided by London intelligence team, report says

The Somali pirates attacking shipping in the Gulf of Aden and Indian Ocean are directed to their targets by a "consultant" team in London, according to a European military intelligence document obtained by a Spanish radio station.

thanks...it all certainly prompts some ruminations on the vagaries of the financial system...

...the resilient faith of the organised criminal milieu in fiat currency must touch the blackened withered soul of even the stoniest-hearted central banker....will cash eventually end up like guns in many countries ....legislated out of existence for the plebs & a tool only available for the criminal world..

..indeed one wonders to what extent the 500 euro note functions as a negotiable instrument precisely because it is already effectively "backed" by the drug pipelines & blazing automatic weapons of the cartels rather than the paper-bazooka of the ECB....no wonder Merril Lynch want to get their hands on them....

Paper money is unfit for a world of high crime and low inflation

By Kenneth Rogoff

http://www.ft.com/cms/s/0/c47c87ae-e284-11e3-a829-00144feabdc0.html?siteedition=uk#axzz33C5w5xxA


Abolishing physical currency would achieve two valuable objectives, writes Kenneth Rogoff




Has the time come to consider phasing out anonymous paper currency, starting with large-denomination notes?

Getting rid of physical currency and replacing it with electronic money would kill two birds with one stone.

First, it would eliminate the zero bound on policy interest rates that has handcuffed central banks since the financial crisis. At present, if central banks try setting rates too far below zero, people will start bailing out into cash. Second, phasing out currency would address the concern that a significant fraction, particularly of large-denomination notes, appears to be used to facilitate tax evasion and illegal activity.

Yes, there are some important arguments in favour of the status quo. These include a likely loss of seigniorage revenue – the profit central banks make by printing money – even if anonymous paper currency is replaced with purportedly anonymous electronic government currency. Even though central bank “profits” are turned over to national treasuries, the ability to skim off expenses without having to beg can help insulate central banks from political pressures. But the real costs to governments would be much less than the loss of seigniorage revenues might indicate, because they would gain revenue by making tax evasion more difficult. There would also be savings from crime reduction.

Another issue is that society may want to preserve the right for individuals to make anonymous payments in certain activities, even if it is desirable to strip away the cloak of anonymity from those engaged in tax evasion and crime. Anonymity, for example, facilitates experimentation at the fringes of society with activities that might ultimately become legal (buying marijuana, for instance).

The idea of finding creative ways to get around the zero bound on interest rates has been championed for more than a decade by Willem Buiter, a former UK Monetary Policy Committee member. Phasing out paper currency is by far the simplest. With electronic payments mechanisms becoming increasingly prevalent even in small transactions, and with the supply of paper currency overwhelmingly top-heavy with large-denomination notes, the case for keeping the currency status quo has weakened.

Without going into gory detail, in both the eurozone and the US there is roughly $4,000 in circulation for every man, woman and child, and it is not easy to find. In Japan the figure is almost double that. In the US and Japan, more than 75 per cent of currency is held in the largest denomination notes, the $100 bill and the Y10,000 note. The situation in the eurozone is different only in that there is a larger range of high-denomination notes going all the way to €500, but the basic point is similar.

In arresting Mexican drugs lord Joaquín ‘El Chapo’ Guzmán, authorities found more than $200m in cash – and this was not a firstTrue, it is likely that a significant share – perhaps half – of dollars and euros circulates internationally. Some portion of this is surely abetting illegal activity and tax evasion. (In arresting Joaquín “El Chapo” Guzmán, the Mexican drug lord, two months ago, authorities found a room containing more than $200m, and this was not a first.) Then again, dollars and euros, including large-denomination notes, are also used for legal purposes. Even so, there still appears to be a very large share circulating in domestic underground economies, estimated to be at least 7-8 per cent of gross domestic product for the USand considerably higher for Europe.

Of course, if governments could credibly issue an anonymous electronic currency, the problem of the zero bound would still be solved and central banks could keep pushing their product. Even if this outcome is feasible, however, it is hardly desirable. Note that if governments do stop issuing anonymous currency, then they would probably have to ensure that the private sector did not proffer a Bitcoin-like substitute. Otherwise, illegal activities would proceed unabated, and the government would forfeit even the small inflation tax revenue it gets now. Finally, a shift away from anonymous paper currency would ideally involve co-operation among governments.

Perhaps the right place to begin is by phasing out large denomination notes. This might be enough to accomplish the main objectives. It is time to consider whether paper currency is vestigial, or worse.

The writer is a professor of economics at Harvard

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Letter in response to this article:

Electronic currency isn’t free from crime / From Ms Janet Tavakoli


Sorted by newest first | Sort by oldest first
Report Geoffrey Gardiner | May 30 8:05am |
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In the late 18th century the British government and the BofE issued little currency. The public used bills of exchange, as they had been doing for 4,000 years. As late as 1837 a Mr Leatham found that 95 per cent of the clearing was in the form of bills of exchange.

In mediaeval times the debt of a merchant was preferred as a means of exchange and store of value to government debt. The former was 'monnaie forte' and the latter was 'monnaie faible'. See the papers by A Mitchell Innes, reprinted in 'The Credit and State Theories of Money'. edited by Prof Randall Wray. Renaissance rich preferred to have a receipt from the Medici than state currencies and to pay an 'Agio' of 9 per cent per half year for the privilege. See Adam Smith's chapter on 'Money'.

Few academic economists have ever seen a bill of exchange, so they do not understand its importance. Report David Merkel | May 29 6:49pm |
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Idiot economist. You think in a partial equilibrium manner to achieve one or two stupid unachievable goals, an neglect all the effects on society should we eliminate a paper currency.

Currency has to be a store of value. Aiding and abetting the government stealing from its citizens is shameful, and you ought to be ashamed, Rogoff.

What's worse is that eliminating currency will not spur economic growth or reduce crime much. People will adopt a new currency of their own. They will hoard and trade commodities, using them for private exchange. Eliminating currency will drive much legitimate economic activity into the black economy.

Finally, FT Alphaville, you should be ashamed that you published this -- it is irresponsible to advocate theft, even if it is done by a government. Report Trofimov | May 29 6:17pm |
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@anonymn - yes you can.

Currently the Bank of England pays interest to banks that leave money (deposits) with it. If, instead, it were to charge these banks for the privilege then there would be a negative interest rate on these deposits... Report SecondMoment | May 29 5:19pm |
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The loss of seigniorage is not necessarily a negative as Rogoff suggests. Seigniorage is a non transparent way for a government to tax its citizens by stealth and it is in the interest of ordinary citizens to see the end of governments having that ability. Report anonymn | May 29 4:53pm |
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'if central banks try setting rates too far below zero, people will start bailing out into cash.' - sorry don't understand...you can't literally have negative rates of interest, and we don't. Report Matt Andersson | May 29 4:39pm |
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The author fails to disclose that the largest adulteration of traditional currency occurs in the hands of government--both in the fiscal and monetary management of currency value, and in the appropriation for illicit activity, including the lucrative narcotics trade that is nearly a government and para-military monopoly (and who could forget the images of a senior government advisor dropping into Iraq, post-invasion, with $5B in US cash flown in by lockers, to distribute for influence and control). He points to a relatively minor Mexican drug dealer in support of his thesis, which is quite disingenuous.

On the front page of the same Edition is coverage of US intent to create a multi-billion dollar "fund" for "insurgent" training and outfitting: undoubtedly they will all be handed government debit cards?

The professor's argument is merely progressive sentimentality for yet more top-down authoritarianism, with of course carve-out exceptions for government. Report ChangeMyWorldview | May 29 4:22pm |
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The penultimate paragraph belies the entire essay - Bitcoin exists.

Judging by his recent performance and the comments below, perhaps Prof. Rogoff should spend less time propagating hypothetical changes to our monetary institutions, and more time proof-reading his Excel spreadsheets. Report Helveticus | May 29 3:55pm |
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Would professor Rogoff please take into account the interests of citizens, not only of central banks? To reduce money to electronics with the explicit aim to confiscate its value through negative interest rates is abject and transfers power absolutely to central political authorities. And absolute power corrupts absolutely (Lord Acton).
It is a central good of money to store value. If this function is destroyed, money is destroyed. Report Unimportant1011 | May 29 3:52pm |
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You've got to be kidding me. Report Benign Brodwicz | May 29 3:28pm |
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Negative interest rates will not stimulate much spending among people who have no money to begin with, and are useless against those with money, who get it out of the banking system as soon as possible.This is a moronic idea. The real problem is all the bad debt clogging up the banking system, swept under the carpet at the Fed, or put on the taxpayers' backs--and the absolutely broken distribution of income that only fires on the 1% cylinder.. The banks are already printing themselves money at the discount window in the carry trade to Treasuries. Could the monetary authorities be any more abusive of common people?

However, adopting such idiocy might spur the ever sedated Western publics to reform their central banks, or get rid of them. Report pinkerspost.com | May 29 3:28pm |
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Has Professor Rogoff been to the shops lately? Or, indeed, monitored the share price performance of banknote printer De La Rue over the last couple of years? It would not appear so. Had he done so, Pinkers very much doubt he would have wasted his precious time writing this article. And as for "anonymity" in the age of the world wide web: Like paper currency, surely on the list of endangered species, facing certain extinction before long. Report chrisgil | May 29 3:23pm |
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A classic case of academic myopia. It's amazingly easy for willing parties to create a currency with which to settle their trades. Abolishing high value official notes would simply hand profits to private purveyors of currencies like bitcoin. This is such a side issue to real economic problems that you have to wonder why anyone wastes their time on it. Report 250GTLUSSO | May 29 3:17pm |
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What about the environmental impact, less paper wastage and crime reduction incentives. Imagine to old someone up for their cash or in this case code as the new transfer would leave an electronic trail Report ramclean | May 29 3:05pm |
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Phil - of course gold has intrinsic value. Not only is it beautiful colour, but it is non-toxic and does not rust or tarnish. If gold were a common metal like iron, then the door handles in my house would be made of gold. But gold is scarce, about 14,000,000 times scarcer than iron. So, of course gold has intrinsic value. Report Adam Bartlett | May 29 2:47pm |
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@Phil Axion - zero bound means the point where interest rates reach zero. Sometimes economists mean specifically the Central Bank's base rate, sometimes they mean for commercial banks.

You probably know the rest. In normal times, the first choice monetary policy tools for responding to low growth, especially with low inflation, is for CBs to lower their base rates and / or inject more money into the economy, the aim being to cause a corresponding lowering in the interest rates of commercial banks, to encourage spending and productive investment. This tool stops being useful once interest rates are already near zero.

Major problems appear when commercial banks try to apply negative interest. Regular depositors dont like monthly charges just for having a positive balance. Instead of investing their funds, many simply withdraw most of their balances as cash to avoid the negative interest. This did happen briefly for large account holders at certain banks a few years back. So at the zero bound, conventional monetary policy loses its effectiveness. Report Kenners | May 29 2:28pm |
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@Nikkiz it would mean that for the crims Report jbx | May 29 2:18pm |
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I would love to be a contrarian and be on your side Ken but I just can't. Today, I looked at my credit card statement and saw a 2% forex spread on paying for something in US$ on a £ card + a 2.75% foreign card utilisation fee. With cash, what you see is what you get. Report SligoBoland | May 29 2:14pm |
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It is of course "desirable to strip away the cloak of anonymity from those engaged in tax evasion and crime" -- in theory. In practice, this will only allow the existing organized crime syndicates who have achieved a state of global regulatory capture to tighten their grip, and squeeze out competition in the process. Remember: drug money kept the world solvent in 2007-09. Be careful what you wish for. Report Phil Axion | May 29 2:04pm |
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By the way, I do not accept the assertion that gold has intrinsic value. It has uses for decoration and certain industrial applications. It has a traditional status and a mystique. But it is otherwise no different from paper bearing the chief cashier's signature. Report Phil Axion | May 29 1:54pm |
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I am out of touch; could somebody explain in simple terms what the zero bound is please? Report Gian Marco Mensi | May 29 1:50pm |
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I hope that Professor Rogoff is in favour of a referendum to check whether his theory is in sync with the will of the people. If not, an arbitrary choice on a matter of this importance would be an act of tyranny, removing citizens' right to store part of their savings in liquid form with the certainty of keeping their nominal value intact. Cash is the only insurance against negative rates and oppressive government control. Report dant | May 29 1:28pm |
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Dear God this is insane. Report Dr Hotspur | May 29 1:14pm |
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Professor Rogoff makes some interesting and salient points, although I think he perhaps overdoes the crime aspect. But he also ignores some key elements which also illuminate this discussion:

Firstly, the vast majority of in use today is not hard cash. It is largely electronic book entry. A quick glance at the components of most countries' money supply reveals this simple truth. In that respect we are already moving towards the kind of future Professor Rogoff envisages.

Secondly, and possibly more importantly, the history of money reveals it to be a SOCIAL medium. As the late Sir John Hicks noted: Money is what money does, which means the general public must have confidence in whatever is being used as money, else it is doomed to fail. Any move away from physical forms of money towards virtual or e-money has to be evolutionary rather than revolutionary if it is to gain public acceptance. This can be seen in the history of the replacement of the cheque by the debit card, something which has taken decades and is still not complete.

Thirdly, and related to this, is that all forms of money suffer in a crisis as confidence is reduced considerably. This is where the "gold buffs" have a point; any money which has intrinsic value is more likely to retain confidence in a crisis than pure fiat money, and it doesn't get more purely fiat than e-money!

Finally, there is the macroeconomic issue of inflation. I am sure that the late Nobel Laureate Milton Friedman is turning over in his grave at this suggestion, which would lead to no limit to the creation of money, unless ALL central banks were completely independent of government and limited by law in their powers to expand the e-money supply.

I would need to think longer and harder about the possible interest rate implications, especially given Keynes' view on the instability of interest-rate expectations as a determinant of liquidity preference (which is NOT the same as the demand for money per se).

But thank you to Professor Rogoff for stimulating this long overdue discussion. Report SoS | May 29 1:05pm |
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Better ask what Nigel Farrage thinks of the idea Report Monkeytennis | May 29 1:01pm |
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Well done everyone. This article was always likely to be catnip for the freemen and you haven't disappointed. Special mention for Treepower and Bernhard Otto Report forgotten man | May 29 12:55pm |
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"Finally, a shift away from anonymous paper currency would ideally involve co-operation among governments."

Bearing in mind governments are increasingly becoming THE biggest threat to freedoms then having a move towards a "world Government" , or at least a number of cooperating ones would be a major backwards step.

There has been a steady movement towards... , "Now, we never can annihilate a penalty. We can only divert it from the head of the man who has incurred it to the heads of others who have not incurred it. A vast amount of "social reform" consists in just this operation. "

Or more succinctly "Locks are for keeping honest people out".

In this less than ideal world the price we all pay for some level of freedom is the misuse of those freedoms by the various criminal organisations. All the governments strive to do is own and make the latter "legal".

The view from Kenneth Rogoff's ivory tower must be very breathtaking. Report jacques courtois | May 29 12:52pm |
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Frightening. In effect Rogoff advocates a world where governments get to see (and thereby ultimately control) even the smallest personal purchase. As I doubt this is what he intends this is yet another case of the tremendous danger naive academics pose to the world. Report Brutto | May 29 12:38pm |
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What Rogoff is saying is that government confiscation through "acceptable" inflation of 2 to 4 per cent isn't working so well any more. And this "benign" confiscation is crucial to maintaining the illusion that governments can keep buying votes and make "promises" for the future to their populace.

It's just like Piketty's argument from a different angle. Absent inflation borrowers get poorer and poorer and lenders get richer and richer (never mind that the borrowers "spent" and the savers deferred consumption). And since borrowers are in charge they will help themselves to what they want. Democracy, anyone...? Report MarkGB | May 29 12:26pm |
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Welcome to the matrix Mr Anderson.

No thanks Professor Rogoff, I'm sure you mean well, but the people who scare me the most are governments, and the people who hate them. I never thought I'd defend paper currency, but given sound money is in hibernation, and barter is impractical, I'd prefer to keep some paper so that if and when a cyber war breaks out openly, I can still get a can of beans without having to dig my grocer's garden!

In the meantime I'm happy buying real assets - you know, physical stuff that will still have value when the Central Banks' electronic Ponzi schemes trip over a pile of derivatives that no-one noticed were lying there.

Thanks Prof, but I'll keep taking the red pill if you don't mind. Report Ian Campbell | May 29 12:19pm |
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To execute the abolition of paper currency in favour of an electronic alternative would require the abolition/ confiscation of other possible 'real' currencies - gold, silver, diamonds and other precious metals and items that can be used as an exchange of value. Is that in the wider interests of mankind and freedom? Would it be accepted without a revolution?

Come on Prof. Get out of bed the other side tomorrow. A truly disappointing suggestion from someone who has done much good work. Report Adam Bartlett | May 29 12:09pm |
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I can see massive advantages, but even as someone relatively socialist and trusting of government, I'd need a lot of convincing that it's worth the loss of personal freedom.

Incidentally, a couple of weeks back in Hatfield town centre I was given a DVD warning of the end of cash by a Christian group. First time that's ever happened, maybe those End Timers are onto something after all... Report lizNNP | May 29 11:46am |
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Where there is money, in any form, to be manipulated or stolen, there will always be those individuals who are greedy enough to do it. Report Mark70 | May 29 11:40am |
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Imagine...

One day in the not too distant future.

You go overdrawn at the bank. By accident or design, it doesn't really matter.

The bank stops your card.

You cannot now get a bus, a taxi, buy food, pay any bills, buy petrol.

Because of this, other direct debits that come out that day are refused... your TV goes off, your gas gets cut off, your electricity goes off....

Because of all that, it will be 10 years before anybody lends you a s*dding farthing.

Everything you do will be tracked. Real time. You will automatically be flagged as desperate and a potential criminal.

Welcome to the future without anonymous paper money. Lovely isn't. Report Chris Cooke | May 29 11:27am |
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So imagine the consequences, in an electronic money world, of a banking crisis. Like Cyprus for example. Your current account will be converted into a two-year time deposit. Any maturing time deposit, likewise switches upon maturity into a fresh two-year time deposit. Very handy for buying milk, bread or even FT newspapers. Of course, if your intention is to assist with your mass financial control of your population then no doubt we will hear arguments like "reduces crime", "increases tax revenues" as an excuse to pursue an act of pure dictatorship. Alternatively, you could say "relax, we'll never have another banking crisis anyway…." Report Boris | May 29 11:19am |
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Government confiscation!

It's bad enough we're forced to use currencies that can be manipulated by centralised institutions in the first place. Now we just want to subordinate our economic existence almost entirely to the state.

How about electronic property then? Why not just plug our minds into the Matrix so that whenever the voters or NSA want they can just pull the plug on you? Report CP72 | May 29 11:17am |
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I will start by saying that I enjoyed reading the article by Prof. Kenneth Rogoff. I will add that I also enjoyed reading the 'Ascent of Money' by another Professor at Harvard, this time a history of economics professor, Prof.Niall Ferguson. The use of money has been a key 'invention' that has changed our civilised society. We no longer need to go down to the market with our produce to barter with the farmer for a chicken we can use money at our local supermarket. Digital or Paper.

Let me cast your minds back not centuries ago but March 2013, where a small island in the Mediterranean got front page news. The small island of Cyprus with barely one million inhabitants had a complete shut down of the banking system. This was in order to allow the relevant government authorities to decide what to do with the 'digital' money in peoples savings account.
While the two weeks of public shock ensued the ECB had to fly in paper Euros to compensate for the high demand at Cash points. The crisis was resolved when it was decided that a haircut would be the appropriate action. So if you had x + €100,00 in your bank account you would now have in Laiki just €100,00. The x disappeared. It was rather simple you just changed the computer algorithims and poof like that it was gone.

So I will conclude by saying that I really enjoy reading all these publications by Harvard Professors but Ive seen what happens when a group of top economists and financial wizards get together. We generally foot the bill. I bet the woman who took her money out of the banks in Cyprus and hid them under the mattress will be feeling very glad she did so..... Report GDCC | May 29 10:30am |
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Paper money contains crime in both senses of the verb contain. You suppress cash and who knows where crime will migrate. It has boundless adaptive skills. You need to find other ways to combat evil. Report ColdFeet | May 29 10:27am |
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Does he ever go shopping for small-value items? I can envisage a monthly account arriving, detailing every newspaper, chocolate bar, coffee and whatnot that I've bought. Ludicrous! Report Africa Rising | May 29 10:17am |
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Banks should incentivize people to phase out paper money and use electronic payment instead. Report Norman Lloyd | May 29 9:56am |
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Holding a wad of Ben Franklins in your sock drawer is just good, conservative and prudent management in countries with a known history of hyper-inflation and exchange rate controls - for example Argentina.

Having a personal store of paper money close at hand is not necessarily the stamp of thievery, but more likely the actions of a shrewd saver in the third world - everyone throughout South America, from business moguls to maids, holds US dollars in a spare wallet.

An electronic solution wouldn't work in countries where the central bank/government regularly freezes accounts, or where banks have no credibility among depositors.

Professor Rogoff's idea just won't fly in developing countries - he ignores the fact that paper money is an important store of wealth in times of crisis, and certainly more liquid than gold. Report Nikkiz | May 29 9:54am |
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Kenneth Rogoff - for a moment I thought that this article would be about returning to the gold standard! 3 words for you - Are You Mad???? Report ceejay | May 29 9:53am |
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500 and 200 Euro-currency notes are rarely accepted by commerce in France. Even changing them at banks there will raise questions for answer. Eliminating cash altogether is ok up to a point. And, that point of no return is the age of the individual payer. In a world turning rapidly to on-line income tax declarations, smart-phones for all types of convenience payments, internet/paypal transfer payments and the use of debit/credit cards, older people are going to find these methods of technological payment systems increasingly a mental and physical inconvenience. All these hi-tech systems have been thought out by/for young people. The day will come when payees do not receive what they expect, because old-aged payers will not be able to handle the ever-changing tech procedures, together with a myriad of forgotten passwords. Y2K was one thing. Old age, in an aging society, tired with the techy demands on them to handle simple payments, will make the threat of Y2K very small indeed. Report Brutto | May 29 9:52am |
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If you think this is Orwellian utopia....Italy has already "forbidden" cash payments for amounts above EUR 1,000.. desperate measures for desperate failing states... Report Trutheludes | May 29 9:48am |
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I don’t remember having read any other FT article greeted with such an almost unanimous condemnation - except perhaps yet another Harvard don Larry Summers’ of a couple of years ago - as this one. Shows how far removed these intellectuals are from the mainstream currents of thought.

I have little doubts now, someday a Harvard or Harvard-like University Professor will theorize that for the sake of incorruptibility and efficiency human societies should better be governed by intelligent robots. He would argue this could be the next higher stage of human evolution. Report RiskManager | May 29 9:41am |
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Great idea, and inevitable I think. Why should a pound earned in a bubble and held as cash have more right to retain its value than a gold coin bought with that pound at the time? Both pounds earned were not real, of full value, as they we both "earned" in a bubble. The same can be said of debt.

And most people already do the majority of their transactions electronically anyway. Maybe Gold coins for the fearful can make e-currency politically acceptable?

End anonymity and properly supervise govt. would be my suggestion. I think we already properly supervise govt. Report LG | May 29 9:34am |
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What a scary article. We would become nothing but slaves. Report Primitivo | May 29 9:19am |
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People will invest in gold instead. Report Anson | May 29 9:11am |
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And remove one of the last areas of relative anonymity from aggressive snopping governments. No thank you. Report justthinking | May 29 9:09am |
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How about phasing out parts of the government instead? They are the biggest sources of power abuse. Why you want to hand even more power into the hands of few is a mystery to me. Report Pgporfirio | May 29 9:08am |
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There are a great number of people that do not have access to electronic means of payment. It really amazes me that an economics professor from Harvard can ignore such an important social issue. Or am I missing something fundamental? Report What "free" market | May 29 8:55am |
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While Mr. Rogoff's desire to see a curb on tax evasion is laudable, that problem could be substantially reduced if governments tried harder. One can be sure that GCHQ and the NSA would quickly thwart the anonymity of an "anonymous electronic currency" and we would face a loss of freedom to buy too many McDonalds if we were too fat. Places where currencies break down quickly find substitutes - does Mr. Rogoff propose monitoring "anonymous electronic" whisky, cigarettes, works of art, stamps, diamonds, precious metals or virtual rogue regimes issuing their own anonymous paper currencies. Report Diogenesxz | May 29 8:20am |
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This article unfortunately is all too representative of how politically-motivated academics write in order to manipulate opinion. Take an unpopular political objective you are paid to promote - in this case facilitating the inflation tax - and plausibly connect to it to another objective which no-one can oppose - in this case facilitating the fight against crime. If large denomination notes are the issue for crime, then stop issuing large denomination notes. And please drop totalitarian ideas that are based on the principle that all savings and incomes belong to the State. Report Economic Generalist | May 29 8:19am |
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Finally, it should be noted that the last 35 years have been a bonanza for the rentiers (home and share owners). Broadly, it's stupid to have one policy instrument (interest rates) to tackle multiple problems - the real economy (inflation and growth), the interest rate that governments decide to pay on their debt and asset prices. And it's stupid to constantly use the asset price effect of ever lower interest rates as a policy instrument - essentially this means making the non-monetary rich ever richer in the hope of them spending an ever smaller proportion of the extra wealth they gain. The asset-price gains should be neutralised by a property/land value tax, implemented and adjusted as a macroeconomic instrument (e.g. by the Bank of England) Report Economic Generalist | May 29 8:13am |
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Paper money can be retained with negative interest rates (e.g. -5%). Option 1: notes (and coin) are time limited, but still with some value at the expiry date, exchangeable for new notes in the final year with a fee. Notes have a finite lifetime anyway this works. Option 2: They need to be (electronically) stamped. This could be done with a chip. You could probably rely on shops to update cash as the seller is charged a fee for card-based transactions, so this would just mean that cash was treated the same.

I'm not surprised by the negative reaction in the comments, but few people have engaged with the economic arguments. Basically, do we want to live in a world like Japan where a large, indefinite, deficit is needed to retain nominal GDP. Better find a way to reduce interest rates below zero. If there are libertarian-friendly ways of doing so, that's probably for the better. As for savers, if you want a real return, please invest in the real economy rather than hoarding cash, then you deserve your real return. Report Elib | May 29 8:11am |
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Legalizing drugs is the simplest way to eradicate organized crime. It kinda worked for alcohol. Report Camilla T | May 29 8:10am |
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I am surprised the author did not mention the cost of processing cash which in Europe, equates to 0.5% of GDP per annum - that is much more powerful than the profit central banks derive from printing paper currencies.

However getting rid of cash is not possible whilst a large part of society remains 'unbanked'. Once there is an easy way to pay for things electronically without needing a bank account THEN getting rid of cash might be more plausible but generally, I think the article underestimates the role that cash plays in society, particularly across lower income brackets. Report susanmary | May 29 7:56am |
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As I understand it, one of the two arguments he advances in support of his paperless theme is to be able to punish savers.....
Whose side is he on?? Certainly not ordinary people. Better not let him near the real world. Report Kleroterion | May 29 7:46am |
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Phase out large denomination notes?

Seems like here in the UK they've done it already! Have you tried getting hold of £50 notes? No cash machine in the UK will do so. Traders are very leery about accepting them.

So it's wads of £10s and £20s, or use bank cards and let them snoop on you. Welcome to 1984! Report Monitor Monitor | May 29 7:14am |
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This guy is incredibly irresponsible . . . Report bobo | May 29 7:01am |
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claiming a completely paperless economy is paranoid delusional. at the press of a button, citizens may be erased. apart from the database authoritarianism, the only thing I can imagine If we were to make this thing work, would be to get every breathing person on this earth chipped! If that is delusional. But then again, countries fall nowadays at the press of a button.
o tempora o mores! Report Cashcollateral | May 29 6:57am |
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Couldn't read past the sentence about breaching zero lower bound.

Yes, surely the solution to making people spend more is reducing their disposable income even further.

God why are we even still entertaining this idea at all. Report Poorbuthappy | May 29 6:56am |
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Please no! - yet another attest to take personal freedom away and leave us passive recipients of whichever bureaucratic or political power chooses to manage us, giving and taking away from individuals what it wishes... Report Mark70 | May 29 6:09am |
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Oh my God. Eliminating paper money? Can you even comprehend the absolute power banks, corporations and governments could have over its populations if that ever happened?

Too scary to even comprehend. Report Dan Pedersen | May 29 4:32am |
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I think you are on the wrong track. It is the Federal Reserve that should be phased out.

As for paper currency, it's not necessarily a problem as long as it represents real value ie; pegged to something tangible like it once was. The problem is that any currency, whether it's paper or electronic, is a problem if central banks or governments are allowed to create more of it.

You are right about one thing though, "society may want to preserve the right for individuals to make anonymous payments in certain activities..." How about all activities? Do people really want all of their transactions to be tracked electronically and available to be scrutinized by authorities? Report Hush | May 29 4:11am |
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This would be great for gold...maybe we should abolish that also Report Jerryjb | May 29 4:08am |
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The Tea Party is looking better. Cross the government, they erase your money. The NSA spies on you. Google and Facebook track you. The Stasi would be proud. I think Americans will wake up one morning and say they have had enough of free speech and they ask for their privacy back. Will it be too late? Report Mr E | May 29 3:16am |
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Why are we talking about cyber-currencies when a significant share of the world population does not even have access to the most basic banking services. And if I am not mistaken, even in the US quite a lot of people do not have a bank account.
And what would all the people in dollarized economies do? For them, adopting another currency is often the only credible way to tame inflation. I doubt they will have the computer systems to deal with virtul currencies.
What would Italian landlords do, who exact cash from their renters because they distrust banks? What would the Swiss do, who largerly reject credit cards because it gives them a feeling of being indebted?
Cash will be around for a very long time, because it is needed.
I hope there are better ways to fight organised crime than to get rid of cash. Report Mozzie | May 29 3:01am |
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The elimination of physical currency would also have a huge public health benefit. The porous structure of paper money transmits infectious organisms, like the blanket of someone who had smallpox. Report Hunter | May 29 1:16am |
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I agree with unclepie. Computing the numbers in the article there is only $1.3 trillion circulating currency in the US?! Hmmmm. As for the "zero bound" we already have it beat, they're called account fees. Are you trying to make banks (and bankers) richer than they already are Mr. Rogoff?

How about this. Mint coins in denominations up to $100 or whatever in varying shapes and sizes made with the laminated metals the US uses might suffice. Coins outlast "paper" by eons and some of the coins made by the US, designed by Morgan and St. Gaudens for instance, are works of art. This might just fix a couple of the problems with "paper"; it would reduce the expense of continually printing and designing replacement bills and $200 million (also from the article) would have a volume and weight so great as to make hoarding and moving it too expensive. Not to mention that secrecy would probably be nonexistent. While we're at it we can get rid of the penny as it's practically useless except as a nuisance. Report Paul Murph | May 29 12:31am |
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"then they would probably have to ensure that the private sector did not proffer a Bitcoin-like substitute"

Two points Mr Rogoff:

1. No one uses the word proffer anymore.
2. You clearly have no clue how bitcoin works, it's a string of open source code, government can't destroy it. Report MTGG | May 29 12:29am |
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the NSA will be utterly delighted with this proposal. Everyone else, horrified Report Wolfgang S. | May 28 11:56pm |
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right for individuals to make anonymous payments in certain activities Report EMMEXICO | May 28 11:25pm |
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The decline and fall of Rogoff is clear. Well, he can become an economist! Report jolsen | May 28 11:21pm |
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"First, it would eliminate the zero bound on policy interest rates that has handcuffed central banks since the financial crisis. At present, if central banks try setting rates too far below zero, people will start bailing out into cash."

Maybe - and is that really an argument for? Report Saverio Merola | May 28 11:19pm |
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THANK GOD! a 100% of readers and ordinary folk understand simple issues that seem to escape Mr. Rogoff. It is exactly this (Mr. Rogoff's) kind of pseudo-scientific gormless thinking that has succeeded in destroying our society, by creating and abettig a monstrous Orwellian system. Be it the state, or anybody else spying on our everyday activities. They want even more of this, and of course it is for our own good!! I suggest Mr. Rogoff should study history and see what has happened every single time freedom was restricted 'for the very good of the populace'. Thousands of other different objections are well illustrated by other readers before me. But it is US who must raise our voices and put a stop to all this nonsense once and for all. BEFORE IT IS TOO LATE. Report E. Scrooge | May 28 11:17pm |
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Ken if there was such a thing as a electronically secure "safe" for your money. But as the news media announces virtually everyday a new hack or cyber theft, consumers will have very little confidence in electronic money. Not to mention counterfeiting, cloning, I suspect it is much easier in the virtual world than in the paper currency world. Sure, it all can be insured, so say goodbye to the cost savings of paper currency, and say hello to high cost of electronic security and insurance costs. But, it seems for every secure site, someone is able to make it insecure. Report CTYankee | May 28 11:00pm |
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resourceful entrepreneurs (criminals included) will always find a way around repressive and
bureaucratic regulations, restrictions and inventions
governments want anonymity to disappear; individuals want to be free to associate and to
trade with whomever they wish.
electronic money is here to stay and increase its sway- but there will always exist
money substitutes, and there will always be an underground economy: human nature
seems to want it that way.
Rogoff's magic wand seems to be a quixotic sword in the hands of a looming global
governmental godzilla- Orwell and Huxley were absolute correct, and also predicted
rightly that no one would listen to the future they foretold.
pity the common man, he is ground underfoot. why? because some are more equal
than others..
let us hope that a new breed of rugged individualists will rise from the ashes of collectivism
to lead the charge- else the planet shall perish in a welter of malaise and mediocrity toward
which it meanders. Report bubble bear | May 28 10:24pm |
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time to ditch deflation phobia, Professor Rogoff, which you help promote devastatingly back in 2003 as IMF Chief Economist with such disastrous results. A large and stable demand for high powered money of which cash is a key component is essential for any rules-based monetary system in which interest rates could again be determined freely rather than by the monetary bureaucrats who have caused so much harm Report West Tipp | May 28 10:08pm |
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@Blanket - I am with you. Yes, its all about control.
A conversation in my local post offce this morning; the postmaster and I were lamenting about the absurdity of the State and its Masters, good for nothing politicans, and us the servants. His closing words were "there will be not state before long".
I drove off thinking how wonderful it would be! Report Henry the Investor2 | May 28 10:00pm |
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1. Outlawing physical currency would necessitate outlawing private ownership and use of gold and silver coins/bars for obvious reasons.
2. Many activities are legal but disfavored by some. If I see a prostitute in a jurisdiction where it is legal (Parts of Nevada) no crime is committed, or order a disfavored book, contribute to a marginalized political party, (Tea Party, National Front, etc.) In some cases blackmail is the consequence. In others, blacklisting.
3. We are slowly moving towards a Post Orwellian nightmare: the Total Surveillance State. Every tiny life event recorded, forever: where I drive; when I walk, who I see, what we said. What I read, eat, smoke, drink....Suggested future FT article title - "Private conversation is unfit for a world of high crime." Report Henry Law | May 28 9:52pm |
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Most people in Sweden use plastic for most transactions. Money is for giving to church collections and beggars and toilets. Some shops will not even accept notes and coins. Report Bazán | May 28 9:44pm |
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A not so clever solution to a non-existing problem. So like Rogoff Report Brics-trader | May 28 9:11pm |
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Government Plan Would Transform Israel Into The World’s First Cashless Society-
http://www.zerohed...t-cashless-society Report Tim Young | May 28 9:07pm |
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Another failed establishment economist dreaming up wheezes to coerce cautious savers into sacrificing their savings to give the leaking bubble one more pump, instead of asking why equilibrium real interest rates appear to be negative. Can it be that such cautious savers see that the bubble is not quite deflated, and the more that it seems to need desperate measures to stop it deflating, the more willing they are to accept the zero return on money rather than become the last bigger fools? Perhaps, but you cannot expect middle aged academics at the peak of their property holding with pension wealth committed to stocks to admit the need to let the risky asset price correction reach a natural conclusion. Report Michael McPhillips | May 28 8:58pm |
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A viewpoint formed I think from the ease by which Harvard's computers using algorithms on its multi billion investment portfolio can make hundreds of millions or a billion or two a year in profits automatically and not a dollar note in sight although when a New York taxi costs a million dollars and it takes four or five million to become a Congressman one could suspect that by the time QE finally ends the professor may be thinking that if physical currency still exists then wheelbarrows may be the only way to go shopping or to take home one's pay. Report bernhard otto | May 28 8:56pm |
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It is unbelievable !! This is worse than communism as far as the economic policy is concerned. This Prof from Harvard thinks he is doing a good thing when eliminating the untaxed sector of the economy. This is complete tyranny. This is not hitting the criminal sector of the society but its weakest parts as well as its most productive parts. The last really functioning economic part of the society would be destroyed within a few months.
The black market economy on which many small people do depend to make halfway a decent living would completely disappear with results which would be horrible. This would backfire badly. Whole sectors would disappear, prices would go up, shortage of services would be imminent. It would be a paradise for rich people but hell for the lower classes including the anyhow already shrinking middle class.
One can compare this with the policy in East Germany when even small enterprises producing low value goods with cheap laborforce (the owner and his family members) were confiscated and integrated into the 5 years plans. This was such a desaster, this move was breaking a mayor carrying part of the economic society. After the fall of the Berlin wall this was even admitted by the leading economists of former East-Germany. The top banker of the GDR stated, that this was their biggest mistake.
The author seems to have no idea how important even today this sector is for a functioning society. And also the tax man gets his bite since most of the money circulating in the black economy is really circulating. Its moving fast, used to pay food, gas, construction materials, cosmetics, clothes you name it. Since there is a VAT added in most parts of the world this means, that lots of taxes are paid when this money is finally spent and returning into the official economy.

A good finance minister would never try to eliminate the black market economy of the small people because fighting it would destroy much, much more compared to what he can gain. This is also the reason why 500 Euro bills are in circulation. This cash pool is the capital of the untaxed sector of society. Without this money appx 15% of GDP would disappear within a short time. Disappear !! Report Enda O'Brien | May 28 8:53pm |
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This is the economics equivalent of American televangelism. The first time I saw US televangelists, I didn't know if they were being serious or engaging in an unusually subtle form of comedy. Amazingly, most of them were serious. I have the same reaction to this article by Prof. Rogoff. Is he really serious, or just having us on? Either way, another reason to weep for 21st century civilization. Report crc | May 28 8:48pm |
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The idea that we can defeat organized crime by abolishing paper money assumes no way will be found to cheat every bit as successfully with the electronic alternative.

Dream on. Report A_Reader | May 28 8:14pm |
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Dear All,

Once I had talked with a very bright professor about a good work I had done inspired by his own work. The fellow was rather controversial to say the minimum. Each one of us has its own idiosyncrasies and he could not be that different.

Generally speaking I had used what I had learned from his work to a certain very practical complex problem.

Then I went to talk to him.

Our work has been a lot to do with rather different ways of seeing reality.

During that for rather illuminating talk (I dare say) one of the things he had let me know was that one should better stay far, but very far from / of the so called "top universities in / of the world".

This article is an example of why one better do so (and stay very far from those so called "top centers").

Best regards,

A_Reader, Ph.D. Report minatomirai | May 28 8:11pm |
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"Anonymity, for example, facilitates experimentation at the fringes of society with activities that might ultimately become legal (buying marijuana, for instance)."

Yes, fam. Report Serf8973521 | May 28 7:57pm |
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What a perfect instrument for summary proscriptions. Report YFC-Rio | May 28 7:49pm |
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There are no more large denomination notes in US$, since a hundred dollars of 1900 would be worth some 2500 dollars now. Inflation is doing the trick...
Anyhow people always would be able to turn to gold or something else in place of paper currency; you can trust the market's creativity on this. Report Optimiste | May 28 7:41pm |
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Central Banks have already done huge experiments under the current situation that will inflict a lot of pain on many countries and hundreds of million people. Imagine if you withdraw these "handcuffs" as you nicely put it to these smart guys, it will be quickly weapons of massive financial destruction that will hang over our heads. Store some gold please ! Report blanket | May 28 7:41pm |
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it seems remarkable that the author can, with a straight face, advocate phasing out paper money solely to enable the state and banks to rip off their subjects more efficiently. Should he not be coming up with something to make money more reliable and solid, not fretting about "skimming off" and "getting round" limitations on their ability to fleece people? The argument about drug lords is specious: only a tiny amount is used in this way; you might as well say ban cars as they are used by criminals for getaways. Report andrederuyver | May 28 7:34pm |
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Is money a means to make life easier by facilitation economic transactions (instead of barter) or are people become just entities who must facilitate money transfers to the benefit of third parties (banks, governments) Report Vlady | May 28 7:23pm |
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Is this the same man who co-authored the book "This Time is Different, Eight Centuries of Financial Folly"?! How does someone go from cautioning on the consequences of financial excess to theorizing about something that would enable ever greater financial excess?

Anyway, this surely must make Rogoff a serious future candidate for Treasury Secretary or Fed Chairman. He has two key attributes: his thinking is sufficiently malleable, and he would never let a serious crisis go to waste. That's just what Leviathan needs. Report Radical Sense | May 28 7:21pm |
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Some decent points made. But if the problem is the ZLB and, more importantly, the economic malaise of which it is a symptom, how about some direct action? Not that I expect Rogain to support large, targeted fiscal stimulus, even though it would be a whole lot easier and would help get people back to work. Of course, deficits might be higher for a bit... heaven forefend. Report Stranger in the bank | May 28 6:45pm |
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i prefer paper money Report Peter J. Hunter | May 28 6:31pm |
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I have never heard before a better argument for keeping physical currency. Thank you Harvard. Report maljoffre | May 28 6:28pm |
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And speaking of crime, we have clearly seen that the biggest criminals are in the banks themselves and in financial institutions. Electronic money doesn't even slow them down, the opposite, in fact, since handling cash would be cumbersome. Try stuffing a couple of billion in your pocket and see. Report maljoffre | May 28 6:23pm |
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Are the authors figures correct? Should we have Giles check them out? Report Brussels Resident | May 28 6:21pm |
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Paper money is one of the last protections for the individual from the state. I am absolutely sure that its abolition in the US would be met with a torrent of scrip paper. Maybe the old Dixie would make a comeback. Report From the Rocking Chair | May 28 6:19pm |
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World of high crime? Is there more criminal activity throughout the world now and involving more people than at any time in the past?

For the most part, law enforcement knows who the big crime players are and generally where they reside. It's more a consideration of violating the borders of the countries where they reside that is the question. Eliminating currency is not the solution.

I'm surprised that Prof. Rogoff doesn't remember the famous paper that every economics student has or should read: "The Economic Organization of a POW Camp" by R. A. Radford, published in 1945. In the absence of currency, the POWs used the cigarettes they received in their Red Cross packages as currency. People will always find a way to find a medium of exchange, easily circulated (hence by definition anonymous) to conduct economic activity. Any undesired control or impracticability of the medium of exchange will lead to substitutes. Report heneage | May 28 6:15pm |
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and in addition to all the comments below, just try getting this to work in an Asian culture. Report Stoical | May 28 6:14pm |
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Stop that nonsense! What we need is to return to the gold standard. Report The real greybeard | May 28 6:09pm |
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Incredible academic guff.

For one the infrastructure has to work always. In the last five months my electronic payment has been refused 7-8 times because the shop had a problem with their kit.

Fot two the banks have to drop their policy of guilty until proved innocent. This means I limit my electronic payments to as infrequent as possible and/or as small as possible.

And last but not least the banks need to improve their security. Why on earth is it not legally required to print a photo on a credit/debit card? The reason is of course is that it would cost the banks a few cents and they have bonuses to pay. Report RonT | May 28 6:04pm |
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It shows what negative interest rates really are: they are a tax. We are long government IOUs to the tune = government debt, so collecting interest on it is simply a wealth tax. Studies show that if the federal debt is large enough this will outweigh any expansionary effects from people taking on more debt due to lower rates (also ignoring the issue if we should encourage growth based on private debt, looks like we haven't learned a thing). Report DisaffectedYouth | May 28 5:59pm |
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An entirely electronic currency system is great up until the lights go off and the computers are compromised. Just ask anyone who has attempted to purchase essentials during a brownout with a debit card or victims of identity theft (and apparently Professor Rogoff is neither). Report stonebird | May 28 5:58pm |
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The various attempts to start a "cashless" system (pre-filled card), have always failed because of the 1.5% taken by the Banks (although lowered to gain clients) and again from the second party to the transaction (shops).

This is simply the Governemental version of a scam. ....and it will probably be subject to BOTH Governmental "withdrawals" and BankerScams. (Cameron and the UK tax system have given themselves the ability to take directly from savings accounts - so why stop there?)

Who on earth would trust a modern-day Governement with a licence to steal at will? Report Dino Maynard Martino, the economist cat | May 28 5:56pm |
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Orwell. Here we come.. Report 1776 | May 28 5:51pm |
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The fundamental problem with this is you are asking citizens to put even more faith in governments and financial institutions at a time when trust in them is at historic lows. Trust and legitimacy are the issues not paper money. As always though the instinct of the elites is to institute even more state control rather than address the trust gap. Would you place your life's earnings in the hands of institutions that have close to single digit approval ratings? Makes zero sense at the individual level. Report UK debt marsh | May 28 5:45pm |
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Scream! This is so wrong on so many levels be they civil liberties, security, back-up for unexpected events, and of course the assumption that criminals cannot adapt or innovate. But just consider this "eliminate the zero bound" non-problem it solves. This would allow a doubling down of the sad attempt to bludgeon savers into spending to keep alive this so-called recovery, which is too fragile a flower for normal interest rates or balanced budgets. Report Treepower | May 28 5:40pm |
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Absolutely mind-blowing that the fundamental principle of financial privacy and ability to control one's own finances independently should be subordinated to the desire of central banks to compound their own incompetence. A disgrace. Harvard has indeed become a hotbed of neo-Marxist and Maoist totalitarianism. A tragedy. Really. Report fiatsceptic | May 28 5:36pm |
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Academic economics is lacking in many ways, but Rogoff’s attempt to distinguish “crime” from “experimentation at the fringes of society with activities that might ultimately become legal” really pushes the envelope on detachment. More importantly, his awareness that an attempt to remove anonymity functionality from the fiat bargain would be a major (fiat) product redefinition leading to reduced fiat market share seems rather rudimentary. Effective management of the forces now leading toward a more diverse money function, declining fiat dominance and corresponding reductions in central political leverage is going to take more coherent thinking than this wishful, sidelong glance at totalitarian systems development. Report Harshandutuyr | May 28 5:35pm |
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Mr Rogoff obviously you have not considered the vast system requirements in large parts of the poor world that will be needed to implement such a change. Report Yeah | May 28 5:27pm |
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Talking about illegal activities....How do you plan to manage the Wall Street boys ? Not that would change a thing, isn't ?

Just one backdrop...by going digital, "le petit peuple" might start understanding how the "State" steal them. Report fancy_pants | May 28 5:24pm |
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Why does a Harvard professor of economics consider centralized planned currency (or anything for that matter) to be a viable substitute for market driven economics? Brilliant, though framing simple insolvency as a "zero bound on interest rates" Report A.N. Other-Hedgie | May 28 5:22pm |
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Mr Rogoff forgets the origin of organised money - precious metal coinage. Drug dealers aren't going to start taking Amex - just expect a spike in gold/silver coin demand if you outlaw large paper money. Report Status quo | May 28 5:20pm |
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Martin Armstrong was right. Wow!! Anything to control pleb and tax it at will, isn't it so Mr. Government? the 10% haircut coming to your bank account soon. Report MYTELINE | May 28 5:14pm |
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Astonishing that colossal implications for freedom and liberty are simply glossed over by the writer. Report M_T | May 28 5:12pm |
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I agree with @unclepie and others. Anyone thinking that electronic currency would eliminate tax evasion and illegal activity is mad. After thinking about it for all of two seconds it occurred to me that crime could be financed through gold or silver. One million dollars in 100 dollar bills weighs about 22 lbs, 10 kgs. So 200 million dollars is about 4400 lbs of 100 dollars bills. The same in gold by my reckoning would weigh about double that, so only slightly less convenient than 100 dollar bills. For small transactions silver (at about $20 per troy ounce) would work fine. Where convenient criminal trading could be done on a barter basis. And that's just considering workarounds to electronic money; I'm sure there would be a thriving market in laundering electronic money. Report dsimonc | May 28 5:10pm |
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I wonder why Piketty hasn't endorsed this yet Report Andrewross21 | May 28 5:02pm |
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Banknotes not made from paper; they are either made from cotton fibre, or from plastic !! Report some guy too | May 28 4:52pm |
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you are totally insane Kenneth
Phisical anonymous money is our last connection to FREEDOM
Those who conduct tax evasion and crimes have to be called to justice without comprimising the freedom and right to anonymity Report JustTheFacts | May 28 4:48pm |
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A perfect plan for totalitarian government, though it probably assumes that government will continue to need direction from Harvard. Report Tom Hutchins | May 28 4:42pm |
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I think any discussion of moving to entirely electronic currency should wait until we have suitable ways to secure it. Paper money isn't only useful at the fringes of society, but is not vulnerable to card skimming for instance. Removing large denomination notes may not be disruptive but paper money as a whole still has a useful role. Report SSC! | May 28 4:31pm |
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By phasin gout large demomination notes will not achieve a reduction in "crime transaction"... i think criminals will just start to use other ways of conducting their transaction..and i think it will lead to a real surge in precious metals.. and then it can have a real negative impact on economic growth.... Report Nick Antill | May 28 4:29pm |
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Phasing out high denomination notes looks like an excellent idea. And greater use of payment by mobile phone apps will almost certainly reduce yet further the legitimate use of cash. Negative interest rates are another thing altogether. In the absence of cash they would merely encourage the hoarding of gold, or whatever, which might not be a desirable outcome. Report Markus N. Reitan | May 28 4:25pm |
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Typical Ivory Tower argument. How about back-up solutions when technology fails? Or I guess making life generally more difficult for people is a price worth paying for enabling central banks to circumvent the zero bound (ant thereby make them even less accountable) and possibly (but probably not) making some marginal effect on crime?

I dare to suggest it would be ordinary people, much more than criminals, that would suffer most in a cashless society. Maybe we should rather get rid of Harvard economists? Report Ray in Timmins | May 28 4:19pm |
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A cyber criminal could create currency electronically and there would be counterfeit electronic currency running around. Computers are more insecure to hacking than currency is to counterfeiting with today's advances. Especially at the state level. Also with such a large portion of the US population still not using banks, how would you not stop several parallel economies, using different forms of payment from being set up. If you want to make gold even bigger than it is now in the US, try to turn the greenback into a purely digital currency. Report unclepie | May 28 4:08pm |
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Based on what we've experienced so far, electronic money would be a dream come true for cyber criminals, scammers and hackers of all sorts. As our credit card account has been hacked on several occasions, and we've gotten bills from paypal even though we don't have a paypal account, we use old fashioned cash for just about everything. Our online purchases are made through Amazon, without putting a credit card number over the internet. We withdraw cash from the bank, use the cash to purchase an Amazon "gift card" at CVS, enter the gift card number on the Amazon website, and we have a credit balance with Amazon against which we charge our purchases. As needed, we just add to the account. No charges or fees for the Amazon gift card. We wrote to Amazon suggesting they set up a payment system via their website so we can book airline travel and make hotel reservations without using a credit card online. It would be profitable for them, and more secure for us. Amazon and the merchants can divvy up the money they are saving by not paying the "swiping fees" to the credit card companies. Report Izabella Kaminska | May 28 4:02pm |
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@andy - operating servers that manage the data associated with digital currency is equally expensive. You go from printing expenses to server expenses. Delarue is replaced with a data server company instead. Report andy.l | May 28 3:18pm |
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Surely there is a massive saving in that printing notes is very expensive and has to be paid for .

Tickled to see myself in your comment dump.

Report SligoBoland | May 29 2:14pm |
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It is of course "desirable to strip away the cloak of anonymity from those engaged in tax evasion and crime" -- in theory. In practice, this will only allow the existing organized crime syndicates who have achieved a state of global regulatory capture to tighten their grip, and squeeze out competition in the process. Remember: drug money kept the world solvent in 2007-09. Be careful what you wish for.

Every monkey loves his own reflection.

..exactly how many aka's do you travel under ....