Recently, Israel made headlines with a bold move towards a cashless society. Prime Minister Netanyahu spearheaded an initiative to eliminate the circulation of 200 shekel bills, with the ultimate goal of phasing out cash entirely within a few years. The stated objective behind this move is to combat financial crimes and the prevalence of black money within the Arab community.
Implications of Abolishing 200 Shekel Notes
The Israeli 200 shekel bills represent a substantial portion of the country's banknotes, totaling over 100 billion shekels and constituting nearly 80% of the public's cash holdings. Proponents of this initiative argue that a significant amount of these bills are used for hoarding black capital rather than legitimate transactions. The plan to remove these bills is projected to recover billions of shekels over the next few years and expose tax evaders.
Proposed Measures to Combat Black Capital
The policy document outlines a multi-phased approach to eliminate cash transactions gradually. This includes restricting cash transactions to 3,000 shekels within the next few years, further reducing the limit to 2,000 shekels, and ultimately phasing out cash usage entirely in favor of digital payment methods. Additionally, the plan involves leveraging AI tools to monitor and prevent tax evasion, coordinating enforcement efforts across various governmental bodies, and clamping down on possession of cash substitutes like gold and silver.
Comparing to India's Demonetization
Israel's move towards a cashless society draws parallels to India's demonetization in 2016 when the government invalidated 500 and 1000 Rupee notes. The aftermath of India's decision led to widespread chaos, with long lines at banks and ATMs, severe cash shortages, and significant economic disruptions. The policy aimed to combat corruption and terrorism, but its implementation faced numerous challenges and criticisms.
Additional Cash Restrictions in Israel
Israel has been progressively tightening regulations on cash transactions, with recent reforms limiting cash purchases above 6,000 shekels to combat organized crime and money laundering. The government aims to reduce cash usage to hinder criminal activities associated with physical currency.
Gaza's Struggle with Cash Shortages
The cash shortage in Gaza has exacerbated the humanitarian crisis, making it challenging for residents to access essential goods and services. Banks and ATMs have been impacted by conflicts and power outages, leading to a scarcity of fresh cash. The reuse of worn banknotes has become commonplace, highlighting the region's dire financial situation.
Looking Ahead
Israel's transition to a cashless society signifies a broader trend towards digital payments and increased government oversight. As governments worldwide explore similar initiatives, it becomes crucial for individuals to consider decentralized alternatives like Bitcoin to safeguard against potential abuses of power and financial restrictions.
Frequently Asked Questions
How Does Gold Perform as an Investment?
Supply and demand determine the gold price. Interest rates are also a factor.
Gold prices are volatile due to their limited supply. In addition, there is a risk associated with owning physical gold because you have to store it somewhere.
What's the advantage of a Gold IRA?
A gold IRA has many benefits. It's an investment vehicle that allows you to diversify your portfolio. You have control over how much money goes into each account.
Another option is to rollover funds from another retirement account into a IRA with gold. If you are planning to retire early, this makes it easy to transition.
The best thing about investing in gold IRAs is that you don’t need any special skills. They're available at most banks and brokerage firms. Withdrawals can be made instantly without the need to pay fees or penalties.
There are also drawbacks. Gold is known for being volatile in the past. So it's essential to understand why you're investing in gold. Do you want safety or growth? Is it for security or long-term planning? Only then will you be able make informed decisions.
If you plan to keep your gold IRA indefinitely, you'll probably want to consider buying more than one ounce of gold. You won't need to buy more than one ounce of gold to cover all your needs. Depending on the purpose of your gold, you might need more than one ounce.
You don’t necessarily need a lot if you’re looking to sell your gold. You can even get by with less than one ounce. You won't be capable of buying anything else with these funds.
Who is entitled to the gold in a IRA that holds gold?
The IRS considers anyone who owns gold to be “a form money” and therefore subject to taxation.
To take advantage of this tax-free status, you must own at least $10,000 worth of gold and have been storing it for at least five years.
Owning gold can also help protect against inflation and price volatility, but it doesn't make sense to hold gold if you're not going to use it.
If you plan on selling the gold someday, you'll need to report its value, which could affect how much capital gains taxes you owe when you cash in your investments.
Consult a financial advisor or accountant to determine your options.
How much gold do you need in your portfolio?
The amount of capital that you require will determine how much money you can make. A small investment of $5k-10k would be a great option if you are looking to start small. As you grow, you can move into an office and rent out desks. This way, you don't have to worry about paying rent all at once. Only one month's rent is required.
It's also important to determine what type business you'll run. In my case, we charge clients between $1000-2000/month, depending on what they order. Consider how much you expect to make from each client, if you decide to do this kinda thing.
You won't get a monthly paycheck if you work freelance. This is because freelancers are paid. You may get paid just once every 6 months.
You need to determine what kind or income you want before you decide how much of it you will need.
I recommend starting with $1k-$2k of gold and growing from there.
Statistics
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
