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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 summary here cites someone named "Sanders" but there is no sanders in the WashPo article. There is someone in there named Sands (note no "er" in the name) but nobody named Sanders.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
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."
In the coming Zombie Apocalypse, you can use those "$500, $1,000, $5,000 and $10,000 bills" to wipe your ass. I would not recommend using poison ivy or poison oak.
The only things that will have value, will be canned goods, weapons and ammo. Maybe a bit of clean drinking water on the side.
Hmmm Dinky Dee dog food for breakfast . . . yummy!
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
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
As far as I'm concerned the true motive is to force larger transactions to use electronic transfers, allowing the government to track more transactions.
This is purely a push for more tracking. The government wants ALL your transactions to be electronic so that you cannot ever have a private monetary transaction.
Love sees no species.
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.........
Since you have campaigns for getting rid of the smallest currencies - the penny, the $1 bill - and now a campaign for getting rid of the largest, we should meet somewhere in the middle.
My suggestion would be to have ONLY a single cash token, worth $37.61.
In the first place, the odd amount would improve American numeracy; in the second, anything purchased below that, the change could be absorbed by the US government to offset the debt.
It could be made of plastic harvested from the ocean, so we get the industrious folks who see the effort at bitcoin mining growing too ridiculous to turn their efforts toward a public good: cash mining from the seas, and the substance itself is intrinsically valueless, which is metaphorically representative of the US gov't generally.
It's a win-win-win.
-Styopa
The $100 bill is already dead. You can hardly buy 6 real dollars (1oz silver coins) with it.
See that "Preview" button?
The $100 is ideal for gifts to grandkids (I have 7). Impressively rare to them, crisp, clean. Two $50s just wouldn't be the same!
Get off my lawn, Summers!
What exactly is a negative interest rate?
Are there banks that *seriously* expect the customer to pay them money to keep their money for them....?
There are LOTS of banks that demand customers pay them money to keep their money for them. They're called "fees" and they mostly apply to people who are too poor.
A negative interest rate is an interest rate below zero. Most frequently this comes up in lending policy, when a country's central bank decides to stimulate the economy by letting banks borrow and receive some amount of interest for borrowing. That means there's no real advantage to an institution in holding cash, so yes, they may pass on a negative interest rate to a consumer. So there is an incentive to hold the money in cash (or better yet, in equities).
This stimulates the market because *borrowing* costs go down, so the cost of capital goes down; it's easier to borrow money to finance your business or your home improvement project.
There's a difference between 500 Euros and 100 Dollars. About 5x difference. Imagine getting rid of everything above 20 Euros. Wouldn't fly at all.
Not only fly, but the take-off procedures are already well underway. Some European countries are planning a full abolition of physical money.
Also, more than once I've been to restaurants where the smartcard readers weren't working. It still happens. So you'd need to carry a stack of 20 Euro bills just in case.
No, you wouldn't. You'd pay with your phone, either through phone billing or by direct transfer (giro). Because the transfer systems uses universal routing and is bank-agnostic (except for in the UK, which clings to its old fashioned branch based accounts) and is payer based unlike the US payee based, anyone can pay anyone else in seconds, and there's no "hold" time.
If all phone and internet services were down too, well, what would you do if a cash register was broken or you run out of change? It's not much different - you take people's names and addresses and send them a bill.
Why is the rationale for getting rid of the $100 bill explained by making an example with a different currency worth significantly more?
There's a perfectly good rationale: spin. It makes the contrast in numbers look bigger, it makes the figures harder to check, and lazy readers will mis-remember it as if it were comparing like with like. (I didn't say it was an honest rationale, did I?)
While I prefer to assume cock-up before reaching for conspiracy, the "unit soup" gambit is so common in journalism that I do wonder...
In a survey of 100 programmers, 111111 thought that duck-typing was a good idea.
It is about tighter control of the rest of population, not the criminals.
All those who keep contemplating that it is so easy to carry 500 Euro notes, are also of the opinion that the value embodied in the paper bill represents time and efforts, savings, work and sweat, of the people who worked to get 500 Euros. Yet assholes such as Larry Summers consider all that money to be owned "by society" which is only temporarily in the hands of the "criminally minded" individual.
Two hundred years ago farmers would have chased you out of the village with the pitchforks if you would try to pay with the pieces of paper. For several hundred years there was a statement on every paper note stating that every paper note is exchangeable to gold, no questions asked.
Then there was WW1. Latin Monetary Union, established by Napoleon, has evaporated. Most of the promises pffft... and evaporated, except perhaps for Switzerland. Then, eventually, governments realized that many people are conditioned to accept paper money and it does not need to be backed with gold, and fiat currencies became widely used.
When electronic money has been invented, it has been realized that the money no longer needs to be printed. However few problems have remained: paper money is still a relatively convenient way to make a payment as it is not heavy and semi-anonymous. Also, it has been realized when negative interest rates were introduced, simple $100 bill would effectively become and interest bearing interest. Introduction of negative interest rates would IMMEDIATELY cause massive cash hoarding by the people and the bank runs.
Those who try to ban cash should be upfront with their thinking. They should state what they think:
1. We, the government people, do not like cash because it allows anonymity.
2. Anonymity allows people not to pay taxes
3. Cash makes it harder to introduce negative interest rate.
The hard cold reality is that 95% real tax evasion, crimes and corruption, measured at the dollar value and volume is not conducted in cash, and is mostly conducted by by the top 1% by corrupt politicians and their private sector partners.
It is not about petty crime. It is about control of the common people
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.
Because everyone will take all of their money out of the bank robbing the bank and the monetary wizards their negative interest rate. In turn the banks collapse due to the negative interest rate inspired bank run.
Yeah, it's about control, and using "official" channels to purchase goods and services. I buy and sell vehicles and go to auctions where credit cards aren't taken, or are heavily surcharged-- as almost all forms of electronic transfer except debit mechanisms take tiny nibbles of your purchases. Screw that. Those tiny nibbles are MY tiny nibbles.
Add to the problems, devices like credit card skimmers, smoking hot security breaches at major organizations, the inability to police the Dark Web, and I'll stick to cash where it makes sense. This is all about control, folks. Make no mistake about it.
---- Teach Peace. It's Cheaper Than War.
When the globalist elite scumbags of the world recently met at the World Economic Forum in Davos, one of the decisions was apparently to begin a "War on Cash". Mario Draghi soon proposed eradication of the 500 Euro note and Summers is proposing an end to the 100 FRN. Central banks around the world have either implemented(Japan) or are entertaining the idea of negative interest rates. As of now, this only applies to deposits at central banks, but how long before this insanity filters down to the retail banking sector? i.e. rather than getting tiny positive interest on your bank deposits, you must PAY the bank to hold your funds. In order to prevent mass withdrawals and people hiding their money in the mattress, the banking cartel needs to outlaw cash.
There is another more insidious reason for the War on Cash. When the bankers get into financial trouble, like in 2008 (and again in the very near future), they want deposits to be treated as just another liability that can be restructured in bankruptcy. It's called a bank "bail in" which forces depositors to take a "haircut" on deposits. It already happened in Portugal. Think it can't happen here? The Bank of England and FDIC published a paper in 2012 called "Resolving Globally Active, Systemically Important Financial Institutions". Under the proposed strategy, the losses of a bankrupt bank could be apportioned to "unsecured creditors"(depositors are the banks creditors). In exchange for your confiscated deposits, you would receive stock in a new holding company that has been "recapitalized" (with your money).
Canada has also put forth a deposit confiscation proposal in the "Jobs, Growth and Long Term Prosperity: Economic Action Plan 2013". The plan states (in part) that an insolvent financial institution(a TBTF one)
"...can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital."
The "certain bank liabilities" meaning the customers' deposits of course.
The "War on Cash" has very little to do with stopping illicit activity. The government and their masters in the banking cartel want control of all your liquid assets. That way they can skim a little more of your hard-earned wealth(negative interest) and confiscate what you have in the event of some TBTF bank getting in trouble. Also nice for them because they could record even more of your financial transactions and lock you out of the economy if you step out of line.
once again our wonderful elites think that fucking over all but the handful of bad actors is a *great* thing to do. Why? Because they can consolidate power. No cash means all transactions are traceable. What a gift to the IRS, FBI, divorce attorneys, hackers or anyone on a fishing expedition. You know what you need to replace the buying power of that $1,000 note cancelled in 1969? $6,530! Put another way, a "$1,000" note today is worth $148.69 of 1969 money. And they want to elimiate the $100? all $14 of it?
Good for government, good for corporations, bad for citizens. My response is "oh hell no!". I commonly carry $100 bills for travel and they beat plastic hands down for incidental expenses.
Even if it does not cost you any money, the real costs are your privacy and the fact that you are ever more forced into the arms of the same institutions that create money basically out of fraud. The more money gets digital, the less it has to exist in the first place.
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
As someone who has dealt with cash flow issues in the past (gotta love that Army pay), I'd say that the banks would probably love to do away with cash, as they could charge customers overdraft fees more often if they don't just let them withdraw a chunk of cash once.
Way back when I was an E-4 with an ex, a toddler, and a new wife, if I needed to make it 5 days until payday, and didn't want to get charged 20-35 bucks for each thing I bought using overdraft, I would withdraw $100 in cash and get charged once. It's like a fixed-cost loan with an interest rate that gets less ridiculous the more you borrow.
If you get rid of cash, the banks do great. I guess you could still do something like the above by purchasing a reloadable mastercard or visa, though.
"Murphy was an optimist" - O'Toole's commentary on Murphy's Law
It's cute how you assume that data about what exactly you bought, and when, is not stored anyway. Sure it might be technically illegal to do that: until TTIP passes, at least. But how exactly are you going to prove that they do not analyse the data regardless? Most large retail operations are multi-nationals anyway, who might have their data centres in a different jurisdiction to begin with.
Nah, if you pay with plastic, you get tracked. Anywhere, anytime. Period.
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.
You're right tax avoidance can be easy with a cash transaction. If you want 100% electronic transactions at your businesses you need to eliminate the electronic transfer fees. You fucked that little store out of their profits if you used your debit or credit card for that carton of milk. Cash is better for all but the government and the banks. For instance a business doesn't get charged anything for all of the money the deposit or withdraw from the bank. Well they might get charged a small fee if they need a lot of coinage because the banks have realized there is a lot more work to transport $200 of coin vs several $1000s of paper. If a business is doing tax avoidance then let the government come down on them but don't penalize the other legitimate small businesses. Which btw the small businesses are the real backbone of the economy. Together they drastically out weigh all other parts of economy.
There are considerations other than your day-to-day convenience.
Ever buy or sell something used from the classified ads or CraigsList? How's that going to work without cash? Every single person must be set up with the capability to make electronic transactions or pay a fee to an intermediary?
Do some web searches about Negative Interest Rates. It's happening at central banks and if the government forces us to go cashless, it's going to happen at your bank. How would you like to be charged a 5% fee on your deposits simply for the privilege of having your money deposited in a bank. Isn't loss of purchasing power to inflation bad enough?
What happens when your bank gets in financial trouble, like in 2008? There are proposals floating around in Europe and North America suggesting that in the future, TBTF banks should be rescued by allowing them to "recapitalize" by seizing their customers' deposits. They take your cash and give you some stock in the new, restructured bank.
Be careful of what you wish for.
Translation: "I am going to ignore your points, dress them up with conjecture, and then go about believing what I did before, evidence be damned".
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.
I've never seen a drive-through that won't take credit cards. Unless their machines or network are down, but then they wouldn't be able to take cards inside, either.
is it? because how do banks offer overdraft insurance if its illegal?? I cant get murder insurance in case i kill someone
have you seen my sig? there are many others like it but none that are the same
It's time to kill Larry Summers
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?
It has changed. They all have bank accounts, and cards, and phones with those cards on them so they can buy stuff.
There are two types of people in the world: Those who crave closure
That's your opinion, but it really is just that.
I'm going on vacation soon, and I want to have cash money so that I can lock in the exchange rate, and know how much money I have. If I had to have $20s instead of $100s it would be pretty much impossible to carry without a fat wad of bills. As it is, I have my envelope full of cash which will be my spending money so I know how much I start with and how much I have left.
When I go out to a restaurant I prefer to pay in cash. Same for a bar.
Why would I want everything I ever do to be tracked, analyzed, reported on, correlated, sold, and provided to any entity who wants it? Even if I'm not doing anything illegal, that is nobody's fucking business. You think tracking is bad on the internet? Try having everything you do in the real world correlated to everything you do on the internet, and the entire picture of your life becomes part of Big Data. Fuck that.
You may have a desire to live in a surveillance society in which everything you do it monitored and tied directly to you, but I sure as hell don't.
It would mean everything you ever buy and the location and time you bought it is tracked and recorded. Which means law enforcement, insurance companies, divorce lawyers, ad companies, marketing companies, and every other asshole in the world who wants more information about what you do will likely have it ... it would be pretty much a total erosion of privacy and your right to do something without reporting it to the nanny state and whatever corporations have access to it.
Sorry, I think getting rid of paper notes is a stupid fucking idea, and would so fundamentally change some aspects of society as to be a terrible idea.
The right to do some things anonymously is not one you want to lose. So, you go ahead and plastic, the rest of us wish to remain the choice to not be constantly fucking spied on for everything we do.
Don't give me any of that "if you have nothing to hide you have nothing to fear" bullshit, either. It's my fucking privacy, I'll decide on its value.
Lost at C:>. Found at C.
Yeah, let's ban all cash, drive interest rates negative (except for top tier savings accounts with balances greater than $100k or so), force everyone to either invest in the stock market or continually buy stuff in order to try to maintain the value of their earnings. Real estate prices will skyrocket because that will be one of the places people will want to stash their earnings.
The top 1% will become the top 0.1%, the bottom 99.9% will be reduced to a half-assed barter economy, no personal savings, and mortgage and loan debt beyond belief.
Left MS Windows for Linux Mint and never looked back!
Vote for Bernie in 2016!
Let's talk about this when transfer fees are zero, and p2p payments are as easy as p2m. That's what cash does for you.
For most Europeans, that has been the case for a long time now. Payer initiated transfers are generally instantaneous, with the money being actually available for use by the recipient immediately too, and with no charges for personal use (except for cambio charges, printed receipts or other extra services).
Truly, the banking system in most of Europe has been like Paypal (except far more instantaneous and cheaper) for years now. The giro system is about 50 years old, and improvements like unified account number systems with built-in routing, abolition of float (where the bank keeps your money for 1-2 days for no reason other than to reap interest), abolition of cheques, and, of course, internet has made it ubiquitous. It works, and better every year. I can wave my phone at a condom machine, enter my password, and by the time the condoms are dispensed, the money has already been deposited into the seller's account.
When I moved to the US from Europe back in 1999, I had already gone for years without using cash. My last use of cash was emptying my wallet in a busker's guitar case, wondering why the heck I was carrying around that useless change.
When I came to the US, I was flabbergasted that they still used checques, and that I couldn't pay my bills online without setting up "direct deposit" agreements for those few companies that supported it. Forward 16 years, and the situation has not improved much.
So...where is here for you?
Slashdot is a US Centric site, so, most conversations are geared to assuming you are in the US....and checks, while not as common as they used to be, are certainly NOT a rare commodity. Direct electronic transfer is still fairly rare here, unless you use PayPal or the like....
Electronic transfer in the US still often entails paying a fee....checks do not.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
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.
I don't think there is any conspiracy going on. It is just that the central banks cannot do anything other than manipulate interest rates to attempt to stimulate the economy. So if there is another crash with interest rates already at zero, what do they do? Perhaps they will sit by and let the whole thing collapse, hoping that the bottom is reached before people turn up in the streets with pitchforks. However, ask yourself this - who is most likely to want to turn the system on its head: a bunch of people with zero asset, and now no job, house, hopes, or ability to feed their families? Or a bunch of middle class savers who are pissed off that their savings are being raided by the central bank? The reality is that savers have skin in the game, so will complain bitterly but get on with it. Those who have nothing might just decide the game needs changing by any means necessary if nothing is done for them.
Personally I don't think there are any simple ways out of our present mess. A lot of stuff has been proposed: UBI, people's QE, central bank infrastructure funding. However all of them have potential problems either from a practical point of view, or politically. In the end it may be that just continuing to beat the economy with interest rates is all that central banks can do until we can see how things like UBI experiments and the AI jobs armageddon work out. I mean, the reality is that if you were paying 10% on cash trapped in your account, you would more than likely just go out each week and spend all your money, even if you don't really want anything you are buying. The stimulatory effects of this occurring in aggregate should not be underestimated. Of course the massive asset bubble and the destruction of the planet from rampant zombie consumerism will likely catch up with us eventually, but I guess Yellen and Carney figure they will be long retired by then.
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.
Err....since when do 13yr olds have checking accounts??
I never had one, nor needed one till I was about 16yrs and got my first job....
I had one in 3rd grade, when I first started learning about money.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
Nahhh. Big bills are good to not over stuff your wallet with stupid ones and fives and tens. I'm on the road a lot and do as much purchasing as I can with credit cards, but must carry some cash on the road as I need to know I can get necessities should electronic connections etc break. Fifties and hundreds absolutely have a place. Frankly, I never want to spend them, but like insurance, they are a necessity. I do not need or want the monster bills $1000.00 and up but a couple of fifties and hundreds might buy me a night at a motel or a tire change should I get stuck when there are power/internet outages.
Were the world perfect, and credit card servicing companies always available for every transaction, large and small, with everyone I want to do business with, 24/7... I'd consider changes. Given the total insecurity of our power grid, it's going to be a very long time till I feel safe with just plastic.
Then again, if I am selling something as a private citizen on craigslist or similar, would I take anything but cash? No way. I guess I'd accept a big stack of singles, but why are people making everything harder for the many to prevent malfeasance by the few? Do I want to carry big piles of little notes to buy a used computer? Do I want to inflict them one someone? Not really.
Reducing us to small bills is crazy.
Don't step on the baby.
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?
Considering that Belgium happens to be in Europe, and the considerable penalty for breaching European privacy laws, I would say yes, they would bother to exempt Belgium, since the cost of not doing so can potentially be HUGE, if caught.
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.
Direct transfer, of course. You transfer the money, and he or she sees it in his or her account within a minute, and it's instantly usable.
About 8% of adults in the US do not have and/or cannot get bank accounts. Banks will not give everyone who asks for one an account and some people cannot afford even the modest fees that come with a low end bank account. Unless you want the government getting into the banking business this isn't going to change any time soon either.
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.
No it doesn't take a half hour. as some one that is currently working one part time as suplimental income it takes 5 to 7 minutes to balance a till less time yet for the back office as they use a machine to count bills and change.
---Saying gnome 3 is better than windows 8 not so much a compliment as it is damning with light praise.
Every government, since the dawn of civilization, has craved power.
Too much is never enough. The nature of government -- all government -- is to attempt to increase control at the expense of Liberty. It's what governments do. And it's why the framers of the US Constitution said that the ONLY legal tender would be gold and silver coin. They wrote that because they *knew* that money was one of the most important mechanisms of control -- and tyranny.
Government already pulled a fast one on the American people by gold standard. But even that massive sleight of hand is not enough for the ravenous, power hungry beast at government is: They want even more power.
They want to control every transaction, every penny, every measure of your wealth. This is indeed a war. But it isn't just a "war on cash" as many in the blogosphere call it. It's a war for complete and absolute control over your life. It's the very thing the framers of the Constitution feared most: Tyrrany.
The thing is, we are the boiling frog. We don't notice how hot the water has become. We think it's normal to have fiat currency. We think it's normal to have undeclared wars. We think it's normal to have unplayable debt.
We are so far down the road to serfdom that we won't notice the water getting a few degrees warmer, as the techno-pundits herald the wonderful new simplicity of our all-digital currency.
Yeah... I must be a wingbat, old-timer. I just don't get how awesome this new cashless future is.
All I can say is, resist this. If you don't your grandchildren will be slaves.
I know, I know... It sounds so fringe.
Dinner for four (with a tip) can easily approach $100. Shopping for the week can easily be $100. There is an order of magnitude difference between $100 and 500 Euros (OK, half an order, it's 5.5x instead of 10x). I have to assume that part of this is shilling for the banks, who would love to impose their 3% tax on every single dollar, every single time it changes hands. Hey, Mr. Summers, instead of removing convenience from the great mass of people, how about explaining why banks get to charge such a high percentage for, essentially, an email? (And then you can explain why phone companies get to charge ridiculous rates for data when it's in the form of text messages . . . but that's another story of the large entity being able to force its will on each of the small entities, even though the small entities could easily overwhelm the large one if they would only work together.)
The man is described as always being the smartest guy in the room yet nearly every major position he's taken on the economy has been wrong, like 180 degrees wrong. The most recent and damaging was his staunch support and very active role in the deregulation of financial derivatives.
this++. The original title missed the point: It's not a stupid example. It's a deliberately misleading example, with a deliberate appeal to emotion that is totally unrelated, and as unrefutable as it is unprovable.
Apparently, Summers doesn't understand how inflation works.
$500 of 1969 dollars would be worth: $3,267.97 in 2015
$500 of 2015 dollars would be worth $76.50 in 1969
$100 of 1969 dollars would be worth: $653.59 in 2015
$100 of 2015 dollars would be worth $15.30 in 1969
Source: Inflation Calculator.
The Federal Reserve has been working hard for the last 100 years to reduce the value of U.S. currency. It is not necessary for Congress and the Department of Treasury to aid them any further in the endeavor as they seem to be getting along just fine.
I once took an excursion to Reddit, and later HN. Unlimited up/down voting sucks when dealing with a hive-mind.
It's not unavoidable, with $100 bills you can take a decent vacation and pay cash as you go... with $20s, not so much.
What irks me is that the $100 bill is already worth roughly what a $10 bill used to be in the 1960s... why do we need to make paper currency ever more worth-less? It's not as if there wasn't criminal activity in the previous 100 years when cash was worth far more than it is today.
We could make life much harder on criminals by requiring everybody to get an RFID implant and placing readers all over, too... do we really need to go there to "stay safe"?
This isn't remotely equivalent to RFID chip implants.
Actually, they could make lots of places "scan optional" just request not to be scanned and they'll put you through the alternate security procedure...
When you choose to use your credit card, or license place, or other UID to pay for anything, however small (like a toll on a road), you're being tracked just as surely as if you had a serial number barcode-tattooed on your arm and got it scanned. Sure, the tattoo could be made invisible except under infra-red, doesn't mean it's not there, just like your CC#.
Me, personally, I have Google location tracking turned on and shared with my wife - as long as every security agency from Interpol down to the local Sheriff can track me via my cell phone if they feel the need, why not get some convenience out of it too. I think Google is being a good citizen, letting people know just how tracked they are, how thoroughly their personal e-mails are scanned and analyzed, etc.
So, no, my lifestyle and I have nothing to hide, and I don't make a habit of sealing my phone in a conductive bag and going cash only while driving around with a "borrowed" license plate... but, at least if I had a reason to, it's still an option. When the largest bill you can get is a $20, and a half dozen more tracking systems are in place, that option will be gone, for better and for worse.