On February 16th, The Washington Post printed the article, “It’s time to kill the $100 bill.” This came on the heels of a CNNMoney item, the day before, entitled “Death of the 500 euro bill getting closer.” The former cited a recent Harvard Kennedy School working paper, No. 52 by Senior Fellow Peter Sands, concluding that the abolition of high denomination notes would help deter “tax evasion, financial crime, terrorist finance, and corruption.” In recent days, former Treasury Secretary Larry Summers, ECB President Mario Draghi, and even the editorial board of the New York Times came out in support of the elimination of large currency notes. Apart from the question as to why these calls are being raised now with such frequency, the larger issue is whether these moves are actually needed or if they merely a subterfuge for more complex economic manipulations by central banks to extend control over private wealth.

In early 2015, it was reported that Spain had already limited private cash transactions to 2,500 euros. Italy and France set limits of 1,000 euros. In France, all cash withdrawals in excess of 10,000 euros in a single month must be reported to government agencies. In the U.S., such limits are $10,000 per withdrawal. China, India, and Sweden are among those with plans under way to eradicate cash.

On April 20, 2015, the Mises Institute reported that Chase, a subsidiary of JPMorgan Chase and a bailout recipient of some $25 billion (ProPublica, 2/22/16), had announced restrictions on its customers’ ability to use cash in the payment of credit cards, mortgages, equity lines and auto loans. Before that, on April 1, 2015, Chase, in concert with JPMorgan, updated its safe deposit box lease agreement to provide, “You agree not to store any cash or coins [including gold and silver] other than those found to have a collectible value.”

The war on cash unquestionably has extended from government into the private banking sector. But the public is predominantly unaware of the ever-increasing encroachment of individual privacy and freedom.

On February 5, 2016, The New York Times reported, “the United States could face a new recession in 2016 due to a ‘perfect storm’ of economic conditions.” Ten days later, in an introductory statement, Draghi told a European Parliamentary Committee that, “In recent weeks, we have witnessed increasing concerns about the prospects for the global economy.”

When consumers worry about the economy, unemployment, and their own finances, spending on non-essentials diminishes. Caution results also in paying down loans and hoarding cash.

When economic growth falters, central banks lower interest rates and inject funds into the economy. But if consumer confidence falls further, cash hoarding causes a fall in the velocity of money. This stimulates central banks to discourage the hoarding of cash by introducing negative interest rates to force deposits out of banks. On February 10th, during her congressional testimony, Fed Chair Janet Yellen admitted that there had been a discussion but never fully researched “the legal issues”. However, her Vice-Chair, Stanley Fischer, already had told the Council on Foreign Relations, nine days earlier, that the Fed had discussed negative rate policy all the way back in 2012.

Should negative rates fail to force funds out of banks, governments may look to limit, and even forbid, the use of cash in large transactions. This is tantamount to a war on cash as part of an effort to eliminate citizens’ control over their wealth.

Furthermore, a war on cash could extend even to a seizure of cash deposits under certain circumstances. The confiscation of bank deposits may seem remote to Americans. However, the 2013 Cypriot banking crisis exposed the new central bank stance of ‘bail-ins’ whereby deposits could now be frozen and even confiscated to rescue a bank!

Most of the great economic growth and apparent prosperity of the past 45 years, since the U.S. broke its dollar’s last link to gold, has been financed by credit-unimaginable trillions of dollars of credit. At the heart of this massive credit system are the banks.

The current collapse of oil prices places pressure on the sovereign wealth funds of oil-rich nations to reduce deposits and to sell securities. Lower deposits reduce the banks’ ability to lend and generate profits. If simultaneously, a shrinking economy leads to bankruptcies and non-performing loans, banks would appear not only less profitable but increasingly risky. Currently, banks are experiencing many of these pressures, which threaten a credit shortage just when it is needed most to boost confidence. This helps to explain why the current downturn in markets is being led by the financial sector.

To help make sure that depositors’ money stays in banks despite the negative rates, governments have proposed measures to eradicate opportunities to pay in cash. These measures are camouflaged politically as ‘protective’ means against money laundering, especially by terrorists.

But perhaps the most insidious of government motivations to ban cash is to increase the capability of surveillance over all spending by citizens and corporations. Undoubtedly, this makes it harder for anyone to shield income from the taxman, but it also makes it more difficult to achieve any type of anonymity in the marketplace. Soon there may be no legal place to shield legitimate wealth or spending patterns from the eyes of politicians.

Negative interest rates combined with the eradication of cash appear as a desperate attempt to control global private wealth. Jamie Dimon is one of the world’s most astute and powerful individual bankers.

On February 11th, he invested some $26.6 million in the depressed stock of his bank, JPMorgan Chase. Reported as demonstrating confidence, it may be that Dimon sees the stock price recovering strongly when it is realized more widely just how much the banks might benefit from negative rates and the erosion of cash held privately outside the banks.

President Nixon’s decision to unilaterally abolish the last remnants of a gold standard in 1971 heralded a nuclear age for international trade in which nations looked to gain advantage through serial debasement of their currencies and make up the difference with massive debt creation, unfettered by any link to gold. Similar to the nuclear strategy of mutually assured destruction, it set international trade on a course of mutually assured economic destruction.

The size and scope of the political, economic and financial problems that now challenge the relative stability and tranquility of developed societies are unprecedented. Should the war on cash prove unsuccessful in its early stages, banks could be closed for long periods.

Investors should be aware of such possibilities and consider whether to hold cash and precious metals prudently outside the banking system. Better to be even months too early than a second too late should we be left facing a bank’s closed doors.