Cancelling Euros

QUESTION: Dear Martin,
you are very right that govs intend to terminate high denomination euros.
In Germany it has been impossible to pay cash with a €500 note for quite some time now – at least at most of the shops I usually go to on a weekly basis. At the end of last year they exchanged the ATMs in my house bank, so now €500 bills aren´t dispensed any more.
It seems to me the gov is going to cancel these notes completely, i.e. withdraw them from circulation.
What would you advise to people holding €500 notes at home?
Thank you very much in advance.
EZ

ANSWER: There will be a cancellation of the  €500. That is the rumor behind the curtain. I would convert them as soon as possible to small bills and/or US dollars. There remains a distinct possibility that we will see Europe try to cancel its currency and take up the IMF’ proposal to move toward a cryptocurrency. They are desperate for taxes and they will raise taxes even further. As far as cash is concerned, as we move into 2020, it is time to make changes.

Keep in mind that the United States has never canceled its currency. That is a common occurrence outside of the USA. More than 40% of the physical paper dollars circulate outside the USA. It will be a political difficulty to cancel the dollar. It will take a major economic crisis. The USA will be the last to do such a thing.

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