Posted originally on Sep 25, 2025 by Martin Armstrong |  

The European Central Bank (ECB) is urging citizens to “keep calm and carry cash.” The ominous message is a warning of trouble ahead. Bank runs, defaults, war, grid failures, pandemics—the current banking system cannot rely on what’s ahead. “Cash provides essential redundancy – a ‘spare tire’ – for the payment system,” the study’s authors write. “This redundancy is vital for any system, as no system is infallible.”

Indeed, no system is infallible. I have been consistently warning for decades that tangible assets are a necessity. Cash is freedom, which is precisely the reason that governments want to transition to digital and CBDC. Cash is anonymous, untraceable, and outside the immediate reach of bureaucrats. The entire fight against “money laundering” and the push to link biometric data to bank accounts is a direct assault on cash. Every penny will be tracked, and if they decide you owe taxes, they can simply deduct it without a trial.

However, you cannot simply flee with cash in a suitcase as the majority of nations consider that a crime and will seize your money. Customs agents do not need evidence of a crime, and even if the courts clear you of wrongdoing, there is no guarantee you will ever receive it back. Money is whatever someone is willing to accept as payment. I have long advocated for silver coinage that is easy to carry and identifiable as one such alternative, especially valuable if the currency fails.

“The sustained demand for banknotes has been amplified by sharp increases in public demand during major crises, which highlights the unique role and attributes of physical currency,” the ECB states. The 2014-15 sovereign debt crisis in Greece led to massive bank runs, and people had no access to their funds. There were surges in withdrawals during COVID and at the start of the Russia-Ukraine wa,r and the ECB knows that banks simply do not have the liquidity to provide customers with cash in the event of a true bank run.

Central banks are issuing specific instructions for civil protection. “For instance, authorities in the Netherlands, Austria and Finland suggest holding amounts ranging from approximately €70 to €100 per household member or enough to cover essential needs for about 72 hours. Some jurisdictions, like Finland, are even exploring “disruption-proof” ATMs to ensure access during digital failures.” The ECB is keenly aware that trouble is around the corner.

The recent power outages in Spain and Portugal led to a significant disruption in the financial system. Grids will be targeted during times of war. Nations bordering Russia have seen a much higher demand for cash withdrawals, “with issuance levels reaching six to ten standard deviations above their respective historical norms.” The ECB reports that this level of deviation is “highly unusual,” but in times of panic, people hoard as a survival tactic. There was a 36% spike in daily net banknote issuance during the first month of the war. Expect this figure to multiply when it becomes obvious that the war is expanding beyond Russia and Ukraine.

Keep cash on hand for day-to-day needs, but remember that its use will be increasingly limited, and its portability across borders almost impossible. The real hedge will remain tangible assets that cannot be canceled by government. Next year will be devastating. If you are in Europe, the best thing you can do is get your affairs in order and leave immediately.

Posted originally on Sep 22, 2025 by Martin Armstrong |  

Over 100,000 people took to the streets of France to protest government mismanagement. The people are demanding that Prime Minister Sébastien Lecornu reverse former Prime Minister François Bayrou’s decision to cut €44 billion in services. The government cannot maintain steady confidence and therefore leadership; Lecornu is the fifth prime minister in two years under President Emmanuel Macron. The deeper-rooted issue of fiscal irresponsibility has been lost, as the people still believe government spending can be offset through taxation.

Thousands voiced support for the Zucman tax, named after economist Gabriel Zucman, who proposed a 2% rate on assets surpassing €100 million. The proposal was passed by the lower house of Parliament but later blocked by the Senate over the summer. The proposal was estimated to generate 20 billion euros annually and would have impacted 1,800 wealthy households. What if people flee for a nation with lower taxes? The European Union is actually considering a bloc-wide taxation on wealth to compensate for fleeing capital.

As for France, the national debt stands at €3.345 trillion, equivalent to approximately 113.9% of its GDP. France surpassed the 100% debt-to-GDP threshold in 2020 and has been rapidly spiraling further down the hole. Estimates state that debt levels will rise to 121% of GDP by 2027, and yet, the government continues to spend without regard for budgets. Government spending will reach a low estimate of 57.6% of GDP in 2025.

France spends 14% of its GDP on its failing pension system, and retirees now outearn working-aged adults. Social protections at large compose 40% of national spending. Macron raised the defense budget to 64 billion euros or 2.3% of GDP, with plans to increase spending to 3.5%-5% to meet NATO requirements.

Governments raise taxes, cut services, and claim they are “saving.” The people believe that everyone must pay their fair share into the system and are targeting the rich for paying less. The rich could give all their wealth to the French government and it would still remain beneath current spending and debt levels.

Austerity never works because it punishes the people for the errors of politicians. The bureaucrats waste money on ideological projects, endless regulation, and absurd pension promises, and when the bill comes due, they demand ordinary citizens tighten their belts to pay. This is why the French are famous for taking to the streets.