Eliminate physical cash - make all transactions electronic - what could possibly go wrong?
Posted on 08/20/2017 8:40:15 PM PDT by Lorianne
Visa recently unveiled its own offensive in the war on cash. Visa is offering certain merchants a $10,000 reward if they refuse to accept cash in the future.
Not surprisingly, Visa’s competitor is also part of the war on cash. Mastercard is increasing its efforts to encourage merchants to refuse cash. Here’s Bloomberg, quoting the CEO of Mastercard:
“Mastercard Chief Executive Officer Ajay Banga has been one of the most ardent supporters of ditching paper currency in the U.S. The 57-year-old first declared his war on cash in 2010.”
These private efforts by Visa and MasterCard exist side by side with official efforts to eliminate or discourage the use of cash coming from governments in India, Australia, Sweden as well as the United States.
These efforts are always portrayed in the most favorable light. Private parties talk about convenience and lower costs. Governments talk about putting pressure on tax cheats, terrorists and criminals.
Governments always use money laundering, drug dealing and terrorism as an excuse to keep tabs on honest citizens and deprive them of the ability to use money alternatives such as physical cash and gold.
But the so-called “cashless society” is just a Trojan horse for a system in which all financial wealth is electronic and represented digitally in the records of a small number of megabanks and asset managers.
Once that is achieved, it will be easy for state power to seize and freeze the wealth, or subject it to constant surveillance, taxation and other forms of digital confiscation.
The war on cash has two main thrusts. The first is to make it difficult to obtain cash in the first place. U.S. banks will report anyone taking more than $3,000 in cash as engaging in a “suspicious activity” using Treasury Form SAR (Suspicious Activity Report).
The second thrust is to eliminate large-denomination banknotes. The U.S. got rid of its $500 note in 1969, and the $100 note has lost 85% of its purchasing power since then. With a little more inflation, the $100 bill will be reduced to chump change.
Last year the European Central Bank announced that they were discontinuing the production of new 500 euro notes. Existing 500 euro notes will still be legal tender, but new ones will not be produced.
This means that over time, the notes will be in short supply and individuals in need of large denominations may actually bid up the price above face value paying, say, 502 euros in smaller bills for a 500 euro note. The 2 euro premium in this example is like a negative interest rate on cash.
The real burden of the war on cash falls on honest citizens who are made vulnerable to wealth confiscation through negative interest rates, loss of privacy, account freezes and limits on cash withdrawals or transfers.
The whole idea of the war on cash is to force savers into digital bank accounts so their money can be taken from them in the form of negative interest rates. An easy solution to this is to go to physical cash.
The war on cash is a global effort being waged on many fronts. My view is that the war on cash is dangerous in terms of lost privacy and the risk of government confiscation of wealth. India provides the most dramatic example.
How would you like to go to bed one night and then wake up the next morning to discover that all bills larger than $5.00 were no longer legal tender? That’s essentially what happened in India not long ago.
The good news is that cash is still a dominant form of payment in many countries including the U.S. The problem is that as digital payments grow and the use of cash diminishes, a “tipping point” is reached where suddenly it makes no sense to continue using cash because of the expense and logistics involved.
Once cash usage shrinks to a certain point, economies of scale are lost and usage can go to zero almost overnight. Remember how music CDs disappeared suddenly once MP3 and streaming formats became popular?
That’s how fast cash can disappear.
Once the war on cash gains that kind of momentum, it will be practically impossible to stop. That’s why I’m always saying that savers and those with a long-term view should get physical gold now while prices are still attractive and while they still can.
Given these potential outcomes, one might expect that citizens would push back against the war on cash.
But in some places, the opposite seems to be happening.
A recent survey revealed that more than a third of Americans and Europeans would have no problem at all giving up cash and going completely digital.
Specifically, the study showed 34% of Europeans and 38% of Americans surveyed would prefer going cashless.
Notably, Germans are the most resistant to going cashless. Almost 80% of transactions in Germany are done in cash, and many Germans never use credit cards.
The German experience with hyperinflation after WWI and additional monetary chaos after WWII certainly plays a part in this resistance to the cashless society.
Incidentally, the German word for debt, schuld, also means guilt.
Other countries, such as Romania and Bulgaria, which have recent experiences with currency and financial crises, also tend to use cash extensively.
Of course, there’s no denying that digital payments are certainly convenient. I use them myself in the form of credit and debit cards, wire transfers, automatic deposits and bill payments.
The surest way to lull someone into complacency is to offer a “convenience” that quickly becomes habit and impossible to do without.
The convenience factor is becoming more prevalent, and consumers are moving from cash to digital payments just as they moved from gold and silver coins to paper money a hundred years ago.
But when the next financial panic comes, those without tangible wealth will be totally at the mercy of banks and governments who will decide exactly how much of your own money you’re allowed to have each day.
Just ask the citizens of Cyprus, Greece and India who have gone through this experience in recent years.
It will come to the U.S. soon enough.
Other dangers arise from the fact that digital money, transferred by credit or debit cards or other electronic payments systems, are completely dependent on the power grid. If the power grid goes out due to storms, accidents, sabotage or cyberattacks, our digital economy will grind to a complete halt.
That’s why it’s a good idea to keep some of your liquidity in paper cash (while you can) and gold or silver coins. The gold and silver coins in particular will be money good in every state of the world.
I hold significant portion of my wealth in nondigital form, including real estate, fine art and precious metals in safe, nonbank storage.
I strongly suggest you do the same.
I’ve already lost the war on cash. I have none lol.
Classic example of the government/corporate complex.
Of course they want cash done away with. They’ll get a piece of every monetary transaction by government mandate.
Government will be able to track all buying activity. (taxes)
This is a form of monopoly control on money, a cult taxation by banks, forcing people to use their institutional tools
Any ‘brick & mortar’ store that I go into that refuses my cash will never get a dime’s worth of business from me..
As of today, it is illegal for a merchant to refuse cash. Not saying what the future may bring, though, since credit cards are already accepted by fu@@ing parking meters, even. Soon, pay toilets?
What’s a poor man to do? Asking for spare change on the street, met with a blank stare and asked “Do you take VISA?”. Oh, the huge manatee.
I use cash for almost everything. Easy to tell when to stop spending, your wallet gets thinner when the cash disappears. Makes you think twice about buying when only a few bills are left in the wallet. Plus there is no tracking database on your purchases if you use cash and don’t give your name.
Rev. 13:16: It also forced all people, great and small, rich and poor, free and slave, to receive a mark on their right hands or on their foreheads, 17 so that they could not buy or sell unless they had the mark, which is the name of the beast or the number of its name. 18 This calls for wisdom. Let the person who has insight calculate the number of the beast, for it is the number of a man.[e] That number is 666.
I wonder if it would be grounds for a lawsuit — after all, the note says “THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE” doesn't it?
“Mastercard Chief Executive Officer Ajay Banga “
And the president of Google is Sundar Pichai-——these names are hard to remember——Oh for the good old days.
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Trash article
Thus far, none of the stores where I shop refuse cash. However, the first time they do will be my last time there.
I use a debit card for online purchases and at the ATM. And some of my monthly bills are paid through bank transfer. But all the day to day stuff, eating out, grocery, gasoline, etc. is paid with cash.
As they say, “Cash is king!”
The debt is not incurred until the item is sold. If the merchant refuses to sell the item, then no transaction has taken place. Merchants generally have the right to refuse to deny service.
Potential customer: "I want to buy this with cash!"
Merchant: "Leave my store!"
Regards,
I stopped paying with cash years ago. Wouldn’t have it any other way, now.
Click-bait articles have a way of, say, writing click-bait statements.
Then there are the a-holes who use a hundred to pay for a $5 purchase.
Good work.
[The U.S. got rid of its $500 note in 1969]
Uhh, I had $500 and $1000 bills in the 1990’s. Several times.
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