King Cash

There are mornings when every columnist must feel he faces an embarrassment of riches. For me, this is one such.

Telling of his recent sailing vacation around the coasts of Italy, Michael Ledeen reports thus:

The spring weather has been unusually unpleasant, which no doubt accounts for at least part of the problem, but this lovely part of the world has long attracted lots of visitors regardless of the temperature. Most of the merchants I talked to blame the Treasury Police, whose numbers have increased as the tourists’ have dropped. The Guardia di Finanza have huge powers to snoop, and they have taken to boarding yachts and asking all manner of questions of those on board: Do you own this? If not, from whom did you rent it? How much are you paying? How are you paying? Which credit card did you use (remember, you cannot pay in cash for anything more than a thousand euros)? And so forth. So when I hear European leaders carry on about stimulating “growth,” I’m not very sympathetic. All over the continent, state organizations like the Guardia di Finanza are showing their citizens that the most important thing is tax collection, not freedom to create new wealth.

You hear stories every day that show how avid our governments are to get their hands on our money. I was talking to an American friend who married an Italian about 40 years ago, stayed married, got dual citizenship, and is now being asked by the Italian government to tell all about what she owns in the U.S., and by the American government to tell all about what she owns in Italy. We all know this is part of the scheme to get her money into the government coffers. Two coffers in this case.

But then, Italy is famous for the adversary relationship between its government and its people. Its "invisible towns," where citizens and companies labor and prosper in artful concealment from government recognition and attention, have been irregularly famous. The citizenry's tolerance of organized crime is part and parcel of the opposition between Italian Man and the Italian State.

In George Will's most recent column, we read of the following:

Russ Caswell, 68, is bewildered: “What country are we in?” He and his wife, Pat, are ensnared in a Kafkaesque nightmare unfolding in Orwellian language. This town’s police department is conniving with the federal government to circumvent Massachusetts law — which is less permissive than federal law — to seize his livelihood and retirement asset. In the lawsuit titled United States of America v. 434 Main Street, Tewksbury, Massachusetts, the government is suing an inanimate object, the motel Caswell’s father built in 1955. The U.S. Department of Justice intends to seize it, sell it for perhaps $1.5 million and give up to 80 percent of that to the Tewksbury Police Department, whose budget is just $5.5 million. The Caswells have not been charged with, let alone convicted of, a crime.

Radley Balko has another tidbit along these lines:

When the Brown County, Wis., Drug Task Force arrested her son Joel last February, Beverly Greer started piecing together his bail. She used part of her disability payment and her tax return. Joel Greer’s wife also chipped in, as did his brother and two sisters. On Feb. 29, a judge set Greer’s bail at $7,500, and his mother called the Brown County jail to see where and how she could get him out. “The police specifically told us to bring cash,” Greer says. “Not a cashier’s check or a credit card. They said cash.” So Greer and her family visited a series of ATMs, and on March 1, she brought the money to the jail, thinking she’d be taking Joel Greer home. But she left without her money, or her son. Instead jail officials called in the same Drug Task Force that arrested Greer. A drug-sniffing dog inspected the Greers’ cash, and about a half-hour later, Beverly Greer said, a police officer told her the dog had alerted to the presence of narcotics on the bills — and that the police department would be confiscating the bail money.

Finally, we have this outrageous report from Tennessee:

"You live in the United States, you think you have rights -- and apparently you don't," said George Reby.

As a professional insurance adjuster, Reby spends a lot of time traveling from state to state. But it was on a trip to a conference in Nashville last January that he got a real education in Tennessee justice.

"I never had any clue that they thought they could take my money legally," Reby added. "I didn't do anything wrong."

Reby was driving down Interstate 40, heading west through Putnam County, when he was stopped for speeding.

A Monterey police officer wanted to know if he was carrying any large amounts of cash. "I said, 'Around $20,000,'" he recalled. "Then, at the point, he said, 'Do you mind if I search your vehicle?' I said, 'No, I don't mind.' I certainly didn't feel I was doing anything wrong. It was my money."

That's when Officer Larry Bates confiscated the cash based on his suspicion that it was drug money.

"Why didn't you arrest him?" we asked Bates.

"Because he hadn't committed a criminal [act]," the officer answered.

Truly, "policing for profit" has made it to the shores of these United States.

* * *

The evidence is more than adequate to conclude firmly that America is in a state of civil war. The combatants are its government(s) and its citizenry -- the State on one side, and the people on the other.

Governments are inherently rapacious entities. Their hunger for power and money knows no natural bounds. That's because they're staffed and operated by people -- the sort of people who like the idea of using State power to seize others' property and deprive them of their freedom.

A naive notion has been making the rounds for quite some time: that if Americans would just wake up to what's being done to us by our own governments, we'd "turn the rascals out" and put honest men in their place. In a sense, that's what we strive to do every two years at the ballot box.

It hasn't worked out terribly well, has it?

The Founding Fathers believed that Americans, aware of their sovereignty and the importance of the franchise, would elevate only men of high principles and good character to public office. To hedge against the possibility that they were wrong about that, they built numerous "checks and balances" into the republican system: organizational and procedural brakes that could reasonably be expected to slow a possible descent into tyranny. But the efficacy of those brakes, tragically, depended on the willingness of the men at the levers to invoke them. Once they'd been corrupted, and a system installed to prevent them from being replaced by anyone not similarly minded, the "checks and balances" scheme failed of its objectives.

When one faces a predatory entity which one cannot deter or reason with, only two alternatives remain: fight and flight. Americans by and large are not prepared, materially or emotionally, to fight the State that oppresses us. Neither do we put much stock in a change of the hegemony from Left to Right. So we seek to elude it...evade it...hide from it. We strive to "go underground:" to conceal our doings to the maximum possible extent. In that undertaking, the critical material commodity, the sine qua non that makes enterprise, commerce, and cooperation possible, is cash. Cash, as they say, is king.

And so the State seeks to eliminate cash.

* * *

Cash, functionally speaking, is any commodity which need not rely upon a government to achieve acceptance as a medium of exchange. There have been many forms of cash throughout history. In America alone, tobacco, buckskins, liquor, seed corn, copper, silver, and gold have been widely used as cash. Note the fundamental similarity among these things: They all have value apart from their acceptance as a medium of exchange.

Today we use the term "cash" loosely, mainly to refer to Federal Reserve Notes bearing the legend "legal tender." But Federal Reserve Notes are not cash functionally. If the legal tender law had never been passed, no one would have accepted irredeemable paper notes on an equal basis with the precious metals. Americans had to be forced by a Federal edict to surrender their gold and accept paper in exchange. (Prying the silver out of our hands took longer, but was easier of accomplishment.)

All the same, say "cash" to a hundred persons and ninety or more of them will assume you mean Federal Reserve Notes. Most people who demand cash for their wares are perfectly happy to accept those notes. Therefore, please include them in the enveloping category of cash while reading what follows.

* * *

You're probably aware that cash deposits and withdrawals at the bank, over a certain threshold, are reported to the Internal Revenue Service. The original threshold was $10,000. Recently it was lowered to $5,000. The rationale, of course, is the War on Terror. You're probably aware that the civil asset forfeiture laws, under which three of the horror stories in the first segment were perpetrated, once required that the person whose assets were seized had to be (at minimum) accused of a drug-related crime. No longer: now all that's required is "suspicion." And you're probably aware that over 90% of the Federal Reserve Notes in circulation today test positive for traces of cocaine. Not too hard to derive "suspicion" from a $20 with a trace of coke on it, eh?

It's getting ever harder, less private, and more hazardous to deal in Federal Reserve Notes. We're being unsubtly nudged toward the use of noncash techniques -- mainly bank instruments and Electronic Funds Transfers -- for our routine dealings. Inasmuch as that concentrates the State's targets for snooping and predation, it suits our political masters very well.

But cash alternatives remain. Many barter clubs have moved toward the use of privately coined (i.e., non-U.S. Mint) silver rounds as a medium of exchange. Very large transactions are sometimes conducted in gold. And of course, "traditional" barter, in which goods or services are exchanged directly for one another, remains a viable technique.

Don't think our political masters are unaware of this. Don't think they're not planning a counterstroke. Cash is their enemy. The rapid replacement of older Federal Reserve Notes with notes bearing magnetically encoded strips -- strips that can be re-encoded as they pass through a metering instrument, thus recording their histories internally for later perusal -- should make clear how badly they want to eliminate cash.

I have yet to hear of a motorist being stopped and deprived of his gold or silver rounds, but I don't expect to have to wait much longer.

* * *

Under current circumstances, the advantage of the free citizen, if he has one, lies in his mobility and maneuverability. Governments cannot act as swiftly as individuals and small associations thereof. But they can sense a threat to their agendas and act against it; therefore, the free citizen determined to remain free must always be flexed to move in a direction the State has not anticipated.

The peril of cash is a paramount subject for such flexibility.

Do not expect that much more time will pass before Washington writes "laws" constraining the possession and sale of the precious metals. Indeed, should Obama hold the White House in November, that time could be upon us quite soon. Those of us who hold significant portions of our savings in those media must be flexed and ready to elude any tightening of the State's grip.

Today cash is king...and forever uneasy lies the head that wears the crown. But there's another saying of some importance, particularly to a society of well-armed men whose patience with the State's voracity is almost gone:

"So you plan to shoot at the King? A word of advice: Don't miss." -- Author unknown.