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It's Time To Kill the $100 Bill, Says Larry Summers
HughPickens.com writes: The NYT has an interesting editorial on why getting rid of big bills will make it harder for criminals to do business and make it easier for law enforcement to detect illicit activity. That's why officials in Europe and elsewhere are proposing to end the printing of high-denomination bills. According to a recent paper from Harvard's John F. Kennedy School of Government, a stack of 500-euro notes worth $1 million weighs just five pounds and can be carried in a small bag, whereas a pile of $20 bills worth $1 million would weigh 110 pounds and would be much more difficult to move around. Lawrence Summers, the former Treasury secretary and former adviser to President Obama, has argued that the United States should get rid of the $100 bill. "The fact that in certain circles the 500 euro note is known as the "Bin Laden" confirms the arguments against it," says Sanders. "Technology is obviating whatever need there may ever have been for high denomination notes in legal commerce."
Critics who oppose such changes say the big bills make it easier for people to keep their savings in cash, especially in countries with negative interest rates. Some people also prefer not to conduct transactions electronically because they fear security breaches. According to Sanders the idea of removing existing notes is a step too far but a moratorium on printing new high denomination notes would make the world a better place. "The United States stopped distributing $500, $1,000, $5,000 and $10,000 bills in 1969," concludes the NYT editorial. "There are now so many ways to pay for things, and eliminating big bills should create few problems."
Critics who oppose such changes say the big bills make it easier for people to keep their savings in cash, especially in countries with negative interest rates. Some people also prefer not to conduct transactions electronically because they fear security breaches. According to Sanders the idea of removing existing notes is a step too far but a moratorium on printing new high denomination notes would make the world a better place. "The United States stopped distributing $500, $1,000, $5,000 and $10,000 bills in 1969," concludes the NYT editorial. "There are now so many ways to pay for things, and eliminating big bills should create few problems."
The critics are increasing on this one, there's a lot of paranoia about ending physical currency, negative interest rates, bank bail ins, etc.
I generally tend to be partially susceptible to a good / interesting conspiracy theories, within reason. With this one, I'm starting to see it crop up though from a fairly significant amount of financial market doomsayers, although some of them seem to have reasonable credentials.
http://davidstockmanscontracorner.com/ for example
https://en.wikipedia.org/wiki/David_Stockman
I don't know what to think personally. I certainly feel, based on a few years of reading some of this looney news, watching some of the youtube videos on how 'money is created' essentially, the printing since 08 of money and generally how finance is handled internationally that the whole world has no fucking clue of what's going on.
APPARENTLY the G20 meetings recently approved significantly more bank bail ins in many more countries, mine included.
These are quite serious concerns, example a recent pensioner suicide, due to the banks / govt, effectively STEALING this poor bastards money, it's outright theft.
http://www.bbc.com/news/world-europe-35062239
Honestly at this rate some of the "new world order, new currency for ALL!" stuff is ... almost, ALMOST sounding fucking feasible. I'm willing to swallow a bit of the old conspiracy theory bullshit but as more and more evidence piles up, I'm begging to feel like it's time to buy a shitload of gold, silver and ammunition.
Well regardless of your thoughts on this post, how it's moderated, it's not going to change much - there's little, exceedingly little we can do if there's merit to any of this. So scaremongering aside that's the real concern, we simply don't have power as people in general.
NOTE / Disclaimer: Australian here, who DIDN'T buy into the ridiculous bubble housing market here, out of work now and living off cash saved, if that shit gets 'confiscated' there will be trouble.
I sure as heck do not need my savings, that I worked hard for, I scrimped for, I didn't go into debt for like most else, being confiscated / overly taxed or NIRP'd into oblivion. Disgusting concept.
https://www.google.com.au/search?q=NIRP&hl=en&meta=&gws_rd=ssl (NIRP)
This would be a terrible idea. Bank fraud and laundering is still a pretty popular way to shuffle money around, even though it's riskier now than it used to be, and cash has no impact on that if it's all done electronically. Likewise, from what I've heard, many criminal enterprises will disguise money in physical property such as houses, or even run a legit business and shuffle the money into it. Even if this is (initially) aimed at larger bills, preserving the ability to use cash is an important part of our civil freedom because cash is still pretty much the only way to purchase something without being tracked. You also don't have to worry about people stealing your card and draining all of your life savings out of it, it can't fail because of a faulty magnetic reader, and it's much more convenient for smaller purchases. Larger bills are an easy way to spend money when you're on vacation, it serves a legitimate purpose, and I have trouble envisioning the mafia (or the yakuza) being unable to very easily adapt to this problem while we're all left out to dry.
"Set a man a fire, he'll be warm for the rest of the night. Set a man afire, he'll be warm for the rest of his life."
They got together at Davos and agrees that eliminating cash was necessary to roll out negative interest rates. A zerohedge article said Europe could go as low as negative 4.5%. Why would you keep your money in a bank that steals 1/20th per year. It's criminal. Don't buy into this BS about preventing crime. They are trying to delay the day of reckoning where their bad banking practices and fraudulent derivatives blow sky high. #2008^2
I would posit that it is NOT just the govt that hates cold hard cash, but also big business too.
Retail and insurance companies would just LOVE to force everyone to shop cashless and be able to more readily track your purchasing habits.
Retailers, for the obvious reason.....insurance, well, thing of how much they could do if they could track your purchases, consumption of bad foods, alcohol and *gasp* smoking products?!?!
I'm having to think the Feds, since they are moving more and more into the health care area...would love to gather and digest that sort of information on you too. Spending habits can paint quite the picture of a person, and fill in gaps of information they might not have readily at this time.
I don't think it is just crime they are trying to prevent...
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Handling money costs money. That is the reason Europe stopped using cheques. In Belgium tracking customers is pretty limited. When I go to my supermarket, they are not able to track my buying habbit when I pay with a credit card, as they are not allowed to do so. The CC Co,pany knows where I was, but not what I bought.
In Belgium the CC Company is not even allowed to do an analysis on the way the card is used (In NL it is allowed) So in Belgium you can not target people who use it mainly on Internet or mainly for tanking or mainly when traveling, which is possible in e.g. NL.
The only way they can trace you is if you use a store card and they are not allowed to sell that data.
Sure, some companies will do so regardless and sooner rather than later will either have to adapt or close.
The sole reason why they like automatic payment so much is the cost of handling cash. You have to count it several times. Once when you get it from the customer. Once at then end of the shift. Once at the end of the day. Once before you bring it to the bank/ Once at the bank. And at each point you are able to make a mistake. Paying with plastic? One paymet at the customer and the rest is automagically done.
So that is one reason. The other obvious reason is fake money.
The third one is that it is reality that the majority of big bills is used to do things that you do not want the governe,ent to know. Not even talking about drugs or terrorism. This is basically to doge taxes. And doging taxes ,eans mine are higher as they still need the same amount of income.
So if I want to buy alcohol and cigarettes, I go to the supermarket and pay with my CC. They will never know, as they do not know if I bought that or milk.
So what you need is stricter privacy laws that are in favour of the people, not of that of business.
Don't fight for your country, if your country does not fight for you.
Why not get rid of paper money denominated over $20, and introduce coins instead. After all, what difference does it make for most valid uses whether the material we make our physical money out of is paper or, say, stainless steel? And lets adopt a simple convention that $10,000 in coins denominated $50 or above weighs a kilogram. That makes the coins easy to count, and you can easily carry several thousands of dollars in cash on your person, but a million dollars in coins would weigh 100 kilos.
It'd still be possible to put your life savings under your mattress. Steel has a density of roughly 8000 kilos/m^3, so a million dollars of coins would still be quite compact. However paying for that $10 million dollar cocaine shipment would be extremely inconvenient to do in untraceable cash because it'd literally weigh a ton.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
It would be in our best interests to keep criminals using cash, rather than switching to the new virtual currencies. Kidnapping for ransom used to be a major problem in the US until improvements in police tactics eliminated all viable means of transferring cash ransom.
But recently we have seen a proliferation of ransomware attacks, because so far it has been the perfect crime. Bitcoin has proved to be untraceable. If we eliminate cash and push the thug community into making the technological leap to Bitcoin, we will see a wave of kidnappings eclipsing anything we have seen in Mexico.
Before we start worrying about cash; why not actually crack down on all those 'respectable' financial institutions that are more than happy to launder money?
Sure, maybe filthy proles use stacks of grubby bills to do their crimes; but so long as HSBC and the like can launder billions in drug money and handle transactions for a variety of theoretically-embargoed states(and face zero criminal penalties either as a company or on the part of any of the people involved); only little people smuggle cash.
Without a flamethrower-cleanup of the financial sector, making noises about high-value notes is basically just bigger criminals whining about the fact that they have to deal with lesser criminals who might find using money mules cheaper than buying bespoke financial services for the multijurisdictional client who values discretion.
Guilty as accused, at least up to a point.
However, it is certainly not conjecture that most large retail outfits are actually multi-nationals. Which, by and large, centralise their IT, purchase and logistics operations across countries to some degree. It is also pretty much both logical and normal that said multi-nationals routinely store and analyse data about customer behaviour.
Do you really think that the likes of Rewe and Tesco would bother to exempt Belgium from these analyses?
EFTs in all their forms (Debit, credit, ACH, various electronic pays) cost money:
0. Cost of terminal or software.
1. Processing fees to your acquirer(s).
2. For software, data management and security.
3. Cost of chargebacks (refunds, voluntary or involuntary).
4. Cost of funds during payment float (usually none, but for small merchants this can be up to 7 days - Stripe being one such processor).
'Credit' or EFTs are not without cost. Some banks do charge cash deposit fees, I'm sure, but not 2.5-2.5%, and chargebacks for cash transactions do not happen. the cash/credit price differential at gas stations etc reflects this, and the increased risk of EFTs.
Gas stations are an interesting case. Gas & oil as an industry poses unique challenges to EFTs, mostly due to the potential for repetitive charge amounts and the unsupervised terminals (gas pumps) that pose security risks. But convenience stores are commonly used to test stolen cards, buying a soda and gum for a small amount, then off to the casino to rack chips and change those into cash. Don't get caught, the casinos will not let you back in. Ever. Anywhere.
While EFTs are attractive for a variety of reasons, theft is not one, nor is convenience. Check your receipt at big stores when you spend a lot, an unscrupulous cashier can add on a cash back amount and you may miss it. They will apologize, 'must have hit a button'... yeah, take a moment and tell the manager, there is no 'button'. Obvious fraud such as cloning will diminish as EMV (Chip) cards start to take over. CHIP+Signature as we have in the US is a half measure - CHIP+PIN is the next necessary step, and then they've got ya. If you claim unauthorized use, you must have given your PIN to someone, or disclosed it, and that's your problem. Card-not-present transactions are still at risk. But we aren't mailing money orders to Amazon any time soon, so we are stuck.
Cash is still very desirable sometimes. Tough. Tell the Fed NO.
deleting the extra space after periods so i can stay relevant, yeah.
You're completely ignoring the cost of cash. For a small store, it typically takes at least half an hour per to balance the register at the end of the day if most people have used cash. That's three hours of employee time per register that you have to pay (or do yourself, if you don't want minimum-ways employees to be in a position where they can easily defraud you). You don't have to pay to deposit the cash, but you do have to pay for someone's time to transport the cash to the bank, stand in the queue, and get the receipt, and for the fuel that they consume doing so. If they're carrying large amounts of cash, you also have to pay for the security and you have to pay elevated insurance premiums for having a lot of cash on the premises.
Cash is better for small shops, but only for very small shops. Most moderately successful small shops would find it cheaper if everyone used credit cards.
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Guilty as accused, at least up to a point.
However, it is certainly not conjecture that most large retail outfits are actually multi-nationals. Which, by and large, centralise their IT, purchase and logistics operations across countries to some degree. It is also pretty much both logical and normal that said multi-nationals routinely store and analyse data about customer behaviour.
Do you really think that the likes of Rewe and Tesco would bother to exempt Belgium from these analyses?
Agreed. I think that simply because all we see on our CC bill is a total amount, it doesn't mean that the CC and everything bought aren't well connected. Every item that is purchased is tracked for inventory purposes, and it is so trivial to connect a purchase history to a person, that i'm very surprised that someone thinks that buying their booze on a credit card is a hidden transaction.
Hell, I just went on vacation down south, and since I live on a credit card, it is trivial to tell the travel days, where I stayed, and where and mostly what I ate.
It's just about unavoidable, and been that way for a long long time, so I don't worry about it. Then again, this sort of thing has been used to validate alibis.
I'd imagine the only way to achieve the level of untraceability some slashdotters demand would be a total barter economy. Just make certain no one in the chain went outside the system.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
most 13 year olds (unless things have DRASTICALLY changed in the past 20 years) donthave bank accounts (or if they dont they dont have access to it)
It depends on where you are. In Europe, I had a savings account from shortly after I was born, and a personal bank account from the day I started school, more than two generations ago. The savings account had a "needs parental signature" clause on it until I was 14 or so.
But from day one, I could certainly receive deposits into either accounts. When I took my first summer job at age 12, my wages went directly into my account.