CASH AND CORONA VIRUS

CASH AND CORONA VIRUS

February 18, 2020 By Joseph P. Farrell

The corona virus continues to be the media sponsored threat-and-fear meme-de-jour, and there have been a number of stories questioning the narrative, or speculations on who is behind it, and why. For the record, I'm one of those leaning toward the explanation that it's some sort of bio-economic warfare engineered against Communist China (we'll get back to that), possibly designed to overturn the government of Emperor Xi (as outlined in these articles shared by L.G.R.):

President Xi Insists He Gave Orders To Contain Coronavirus Outbreak Weeks Before It Went Global

Is Political Change Coming To China?

There's also the counting issue, as raised by Jon Rappoport:

Sudden spike in coronavirus cases only means new method of counting

Whatever one makes of such issues, the fact remains that there is a serious outbreak of the virus in China, and as the news has been reporting, it's caused large cities to be shutdown, quarantined, and brought a halt to travel. Xi himself appears to have doubled down on his reputation in the crisis by sending his closest advisors to the hardest hit areas to handle the crisis. In other words, if Xi is not successful in dealing with it, he and his regime will take the blame, and that means he and his regime could possibly be forced to abdicate or be deposed. One could spend this whole blog (and many more) discussing all these possibilities.

Fascinating as those possibilities and tempting as the discussion of them may be, however, I want to focus on something completely different, and on the high octane speculative possibilities implied in it.  This article was spotted by D.W.:

https://www.theguardian.com/world/2020/feb/15/chinese-banks-disinfect-banknotes-to-stop-spread-of-coronavirus

A few days ago, you might recall that I blogged about a strange case of counterfeited US $1 bills, some $900,000 worth, that was intercepted by customs authorities. The bills were in crates, and came from (you guessed it) China. (See

COUNTERFEIT$ AND CORONAVIRU$?

In that blog, I pointed out the oddity of the choice of $1 bills to counterfeit:

Needless to say, this has me thinking that perhaps this virus outbreak and this counterfeiting operation, which the article clearly implies is based in China. Would nations engage in the covert counterfeiting of a rival's currency? Sure. It's been going on all the time. Think of the vast coin-clipping operations in the Italian city-states, not to mention a "highly unusual coincidence" connected to Venice, the Fourth Crusade, and the Venetian counterfeiting of Byzantine coinage. Or think of the British counterfeiting the assignats of the French revolution, or for that matter, their counterfeiting of American colonial scrip. Or think of the Nazis' "Operation Bernhard," counterfeiting such good copies of British pound sterling notes that the entire issue had to be redesigned after the war and new types of currency issued.

However, there's something very odd about this counterfeiting venture. But to understand that "oddity" and why I think it might be something indicating a connection to the coronavirus story, we have to understand a basic feature of counterfeiting operations. Firstly, counterfeiters do not counterfeit things that do not exist. They do not, for example, counterfeit seven dollar bills for the simple reason that it would be a waste of time and effort. This basic fact has been at the core of my arguments that the various bearer bonds scandals - in which the denominated bonds are denounced as fakes and hoaxes because said denominations supposedly do not exist - are really indicative of the possible existence of a wholly hidden bond market. For those who know the story, think of Japanese Prime Minister Tanaka and the so-called "57 bonds."

Secondly, counterfeiters normally do not counterfeit bills in small denominations, but rather, in larger denominations that typically can be broken down into smaller (real) denominations. Typically, this has meant that counterfeiters focus on American bills of $20, $50, or $100 denominations. These are spent, or broken, for real currency, and thus the profit is made.

Thus, in this story, the counterfeiting of $1 bills is highly unusual, for it's an indicator that profit is not the primary motivation of whomever was ultimately behind the operation. But if currency were selected as the principal means of circulating as a biowarfare platform, it makes eminent sense, for $1 bills circulate widely and quickly, from the change in the grocery store line to tips given in restaurants, and so on.

There are to my mind four corroborating indicators that this high octane speculation may have some traction: (1) the timing of the find occurred in the time frame of the outbreak of the virus; (2) the seizure of the counterfeit bills notes the ultimate source was China, via Canada, and there has already been a Canadian side to the coronavirus story, (3) the rapid spread in the USA suggests perhaps that there may be vectors of delivery we're not being told about, and finally, (4) the seizure itself suggests that the US customs was already on the lookout for something. If I can suspect a potential connection of money as a delivery vector for a bioweapon, rest assured, so can the Chinese or American customs.

Now, in this new twist,  the first thing to note is that China is attempting to sterilize its own currency, confirming my suspicion that the virus can be transmitted in this fashion. There are, however, a few additional things to note here; citing from the beginning of The Guardian article:

China is disinfecting and isolating used banknotes as part of efforts to stop the spread of the coronavirus that has killed more than 1,500 people, officials have said.

Banks use ultraviolet light or high temperatures to disinfect yuan bills, then seal and store the cash for seven to 14 days – depending on the severity of the outbreak in a particular region – before recirculating them, China’s central bank said at a press conference.

...

Fan Yifei, the deputy governor of China’s central bank, said on Saturday that banks had been urged to provide new banknotes to customers whenever possible.

The central bank made an “emergency issuance” of 4bn yuan in new notes to Hubei province, the centre of the outbreak, before the recent lunar new year holiday, Fan added.

Now, boiling all this down, this information tends to confirm the suspicion of many (including this author) that the corona virus story is a story of bio-economic warfare against China. Consider: the virus has (1) shut down travel; and, (2) shut down large swaths of the Chinese economy as people are quarantined, prevented from traveling and so on.

But now, with this confirmation that the virus is suspected of being able to circulate on currency, a further blow to the Chinese economy, both domestically and ultimately internationally, is struck: who will want to transact in cash if cash is suspected of being a carrier? As the above paragraphs also indicate, the amount of currency in circulation was curtailed to the point that the central bank authorized the printing of new notes to make up for the short fall, but when the "disinfected" currency re-enters circulation (if, indeed, it ever does, and is not simply destroyed), then China could be facing some inflationary pressure. (And another possibility: if the virus can circulate on currency, might it also be able to circulate on credit and debit cards, and be transfered from card to card-readers and back to other cards?)

And that's just the domestic side. For a country that has been striving to make the reminbi a reserve currency, this is a huge blow not only to those aspirations, but also to bilateral trade-and-currency agreements already on the books. Who wants to hold physical reminbi, or  much more to the point, the actual paper of Chinese securities, in their vaults, if they are suspected of being able to transmit the virus? And given the circumstances, would you trust the digital alternatives when the Chinese central bank is printing reminbi to meet the problem of temporary hits to the amount of circulating currency?

While we're at it, notice also another shock to the system: if one is removing currency from circulation temporarily in order to disinfect it, while simultaneously people are not working and producing, and one is also printing up more money to meet the currency shortfall, one might be looking at the nightmare scenario: a simultaneous deflationary-inflationary "vice grip", and sudden and sharp fluctuations in prices domestically might result, notwithstanding whatever price controls as might be imposed.