KW: The articles below are taken from Jim Rickards Strategic Intelligence newsletter. Occasionally there are references to Rickards work, his books and other publications

The War on Cash Comes to India, and Quickly Causes a Crisis

We’ve been warning investors for months about the war on cash. This war has been in full swing in Europe and the U.S. for a long time. Governments plan to use negative interest rates, confiscatory taxes and other techniques to rob savers of their wealth. In order to do this, they have to force savings into digital accounts at large government-controlled banks. As long as savers can hold cash, they can avoid many of these confiscation techniques. Therefore, governments must eliminate cash. The latest battleground in this war is India. In a shock announcement on Nov. 8, India declared that 500- and 1,000-rupee notes are no longer legal tender. Imagine that — the money in your wallet or purse is instantly made worthless by government decree. That’s what happened. There were limited exceptions for hospitals and gas stations. Naturally, gas lines formed everywhere, and some people rushed to hospitals to prepay for future medical care with now worthless bank notes. The other exception to worthlessness was if you deposited the notes in the bank. There you would receive “digital credit” in your account. Of course, the tax man was waiting at the bank to ask you where you got the money. Those without an acceptable answer can expect trouble from the Indian Revenue Service. Click here to read why this is not the end of the war on cash. It’s just the beginning.

II. After the War on Cash, Get Ready for the War on Gold

India’s decision to make 1,000- and 500-rupee notes worthless (see story above) is having devastating ripple effects in the Indian economy and the market for gold. The consequences of the decision are both appalling and encouraging — appalling because they show governments’ ability to destroy wealth, and encouraging because they show the ingenuity of individuals operating under the thumb of an oppressive government. One immediate consequence is that paper money began trading at a discount to face value. In plain English, you might be able to sell your illegal 1,000-rupee note to a middleman for 750 rupees in smaller denominations. You would get legal tender for your worthless 1,000-rupee note. The middleman presumably has some connection with the banks that allows him to deposit the funds without being harassed by the tax authorities. It’s not unusual for bonds to trade at a discount due to changes in interest rates or credit quality, but this is the first time I’ve ever seen cash trading at a discount (although I did predict this development in Chapter 1 of my new book, The Road to Ruin, released today). The second distortion is that gold is selling in India for over $2,000 per ounce at a time when the world market price is about $1,275 per ounce. This is because Indian citizens are rushing to buy gold for cash. The gold dealers can then deposit the cash for full value. This is just another form of discount on the face value of the cash. It’s not that gold is more valuable; it’s just that your $2,000 is worth only $1,275 (in rupee equivalents) when it comes time to buy the gold. Click here to read how, by Friday, Nov. 11, the entire banking system in India was beginning to run out of cash and alternative forms of payment such as gold and barter were emerging. Don’t think of this as something that happens only in poor countries. Click here to see how similar scenes will play out in the U.S. and Europe as elites become more desperate to take your money.

Ken Rogoff Is out to Steal Your Money. He Just Can’t Decide How

This new article by Ken Rogoff has three ideas to steal your money. The first is negative interest rates. The second is the elimination of cash (governments can do this by declaring the $100 bill worthless, just as India did last week with the 500- and 1,000-rupee notes). The third way is to set higher inflation targets. Rogoff wants to raise the Fed’s inflation target from 2% to 4% per year. At a 4% rate, the value of a dollar is cut 75% between the time you’re 30 years old until a normal retirement age of 65. The money you save in your younger years is nearly worthless by the time you need it. Why should we care what Ken Rogoff thinks? Because Rogoff is not just another big brain. He’s a professor of economics at Harvard University and the former chief economist of the International Monetary Fund. More importantly, his name is frequently mentioned as a possible nominee for a seat on the Board of Governors of the Federal Reserve. If Rogoff were on the Fed board, he’d be in a position to turn his confiscatory ideas into policy. But even if Rogoff remains at Harvard, his views are highly influential on economic policy in general. Rogoff is not alone in his views. If you do not already have a 10% allocation of investible assets to gold, it’s time to make that allocation. Click here to see why gold is almost the only way to avoid the plans for confiscation that Rogoff and others have in mind.