In the ten years from 1985 to 1995m government seizures increased by 2000%. Yet fewer than 30% of those whose property was seized were ever charged with committing a crime.

There are now more than a hundred different federal forfeiture statutes addressing a huge range of "illegal conduct" - both criminal and civil. The implications of this are serious, especially when you consider that, in a US civil forfeiture proceeding, there is no presumption of innocence for the property or its owner. The burden of proof lies with the owner to show that he is not associated with any crime. So, you are guilty until proven innocent. And proving innocence means a lot more than merely demonstrating a lack of guilt.

Congress has also passed laws requiring cash transactions over a certain amount be reported to the IRS. Other laws permit the confiscation of cash.

You can be walking down the street and have your cash confiscated from you by a member of the law enforcement agencies. It is my opinion that governments worldwide will not be happy until they can trace all transactions made as they are happening. One-way to do this is to eliminate cash altogether.

Your cash can be confiscated!

Let's look at this issue of cash confiscation.

The Controlled Substances Act permits the civil forfeiture of proceeds of narcotics transactions, and property facilitating or purchased with such proceeds. It's one of the tactics the government would like you to believe is all part of their war on drugs - a phoney war in which the aim is not to safeguard ordinary US citizens. The aim is to line the pockets of certain employees.

In Valusia County, Florida, sheriff's deputies seized more than $8 million dollars in cash from motorists between 1989 and 1992. They would stop cars that, they claimed, met a secret "drug courier" profile. Then they'd set sniffer dogs to inspect the car. These dogs are trained to bark when they smell narcotics. When the dogs barked, the sheriffs simply took whatever cash the occupants had on them. Of course, no one has asked whether the dogs were trained to bark at some other signal given by the sheriffs.

The problem for the owners of the cash is that to recover it they have to prove in court that they earned it legitimately. Usually, the cost of such a legal battle outweighs the amount that has been taken; so most cases are settled out of court.

But here comes the really outrageous part of this scheme - or should that be scam?

Virtually all law enforcement agencies have concluded that the presence of narcotics residues on cash provides probable cause that the currency was generated in narcotics transactions. Sounds logical to me, until you find out that, according to 21 federal agencies that seize cash in this way, the drug-contaminated notes are not destroyed.

They are deposited back into banks and then re-enter circulation.

Think about that next time you use an ATM machine, or cash a check in your local branch to get some money for the week's groceries. Are you putting evidence in your wallet that could lead, not only to the loss of your hard-earned cash, but perhaps to a conviction against you as well?

The phoney war on drugs

In 1985, a laboratory of the Drug Enforcement Administration issued a classified report. The findings of this report were not made public for more than seven years. The findings of this report were that (and I quote),

"The Federal Reserve may be contaminating the currency through normal procedures."

Researchers had found that belts from the Fed's own high-speed sorting machines were actually contaminated with cocaine. The machines themselves were therefore tainting huge amounts of currency.

Given the changes in policy allowing the seizure of cash from people on the street, and given the fact that all those involved in each seizure get a bonus for their work, it makes you wonder how and why cocaine could have gotten into the Federal reserve's sorting machines in the first place. I'll leave you to speculate on that one.

In 1999, the Know Your Customer Programme was introduced. This made it legal for all banks to monitor all "normal transactions" in and out of your account.

A picture is built up as to the regular habits of each account holder. If anything unusual happens, a computer will be alerted and an investigation launched.

If you withdraw $5,000 in cash to go on holiday and you do not regularly do this, you will be subjected to an investigation.

If you sell your house and get paid partly in cash, which you then deposit in your local bank, once again you will be made a target.

This is not the behaviour of rational government. It is the behaviour of dysfunctional despots.

You may not like to hear this, but the fact is that your privacy is being steadily and subtly eaten away. And for the most part it is the government that is doing it.

Now we have the phoney war on terrorism too - and that's not so subtle!