"Ice Nine" Comes To China

Now the war on cash is being taken to a new level. China, the world’s most populous country and the world’s second-largest economy, has said that physical cash may soon become obsolete.

China has huge digital payments platforms developed by their own companies Tencent and Alibaba, in addition to traditional credit and debit cards and mobile phone payments.

Cash can be expensive to handle because vendors have to hire armored cars to move it, buy machines to count it, pay premiums to insure it and risk losses due to theft.

Once physical cash is gone, your liberty is gone because government can easily monitor and freeze all digital payments. The only recourse for the Chinese people once their cash is gone will be physical gold and silver. 

It’s what I call “ice-nine.” This refers to government’s ability to lock down the financial system in the next global crisis. And it won’t be just China.

In the 2008 crisis, governments met the demand for liquidity by printing money, guaranteeing banks and money market funds and engaging in trillions of dollars of currency swaps.

The problem is that the central banks still have not normalized their balance sheets and interest rates since the last crisis and are unlikely to be able to do so before the next one. Money printing won’t be an option, because central banks have printed too much already. Any more money printing would trigger a complete loss of confidence in fiat money and a mad scramble for hard assets.

Instead of money printing, central banks and governments plan to lock down the system and not let investors get their money out.

This will begin with money market funds and then spread quickly to bank accounts, ATMs and stock exchanges until the entire system is frozen. 

Then an international monetary conference will be convened to create a new global monetary standard, probably based on special drawing rights (SDRs), which will be printed by the trillions and handed out to governments to gradually reliquify the system.

A few years ago, the SEC changed the rules so that U.S. money market funds can suspend redemptions. Recently, China announced that it would follow suit and allow its money market funds to also suspend redemptions. Now China has halted trading in the stock of one of its largest companies, HNA.

This comes on top of the government takeover of another giant Chinese corporation, Anbang Insurance, at the end of February.

The bottom line is governments are preparing for ice-nine and the lockdown of banks and stock exchanges. That includes the U.S. government.

You should prepare also by buying physical gold and silver to be kept outside the banking system.