Where Has All the Money Gone

When conducting the original research for this Report, I contacted several central bankers to ask if they could account for their local currencies. The experience was a true epiphany. Everyone I spoke to knew where their money was. Everyone knew who held which percentage of it and why. Everyone thought that the question was stupid. The problem was, everyone consisted of only four people. The rest, claiming state secrets or not even bothering to produce an excuse at all, refused to be made accountable to the public. This shows clearly that all is not as it should be.
Most countries are able to track down about 80 per cent of their national currencies at any given time. That is most, Uncle Sam cannot perform quite so well. At present, the US Treasury can account for only 18 per cent of its currency, at best. Of course, the Treasury would never tell you this. In fact, the Treasury refuses to speak with anyone directly. Instead, we are forced to rely on other sources to come to an understanding of the truly massive amount of US currency that for all intents and purposes has just disappeared into thin air. Ron Paul, a former US Congressman, has spoken a great deal about the manner in which the government has invaded personal and financial privacy. He estimates that currently somewhere in the vicinity of US $150 billion worth of US currency is “unaccounted for”.
Where has all of the money gone? A great deal of it has made its way to third world countries where it has usurped local currencies as a medium of exchange. This is not the area that is of great concern to Uncle Sam. Instead, he is interested in the unknown amount that has either gone into hiding or is currently floating about the ever growing underground economy. Today, it seems that almost everyone in one form or another deals in black market activities. Many do so without even realizing that their actions can be labelled as such. If you buy or sell merchandise privately or even pay maids or babysitters in cash, you are contributing to the underground economy. According to your government, such activities are illegal, unless you file the appropriate government forms and, of course, pay the appropriate tax.
As the underground economy grows, an increasingly large part of the overall economy is hidden from government scrutiny. Naturally, what your government does not know about, it cannot assess and tax accurately, if at all. In other words, the growth of the underground economy is a trend that your government is only too anxious to put an end to. Ironically, it is government actions themselves that have produced this trend in the first place. Increased taxes, heavy financial scrutiny and the multitude of regulations that have come into effect recently have worked together to send a lot of money into the fold of the black market. To curb this unwanted side effect, your government realizes that nothing will work more simply and effectively than its loosely veiled currency recall.
All Uncle Sam need do is declare that, as of a certain date, old currency notes will no longer be valid. This one simple act will force literally billions of dollars out of hiding. Many may choose not to exchange their money, realizing that anyone changing over a few thousand dollars will become the focus of unwanted government scrutiny. The government will win in two ways. First, from the taxes it will demand and confiscations it will conduct. Second, the millions of dollars that do not surface will also at the end of the day become government property as the new bills that it prints will never be exchanged for old. This windfall could go a long way towards helping the US out of its current financial crisis, at least over the short term. It will be disastrous for many investors concerned with privacy.