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Why We Should Fear A Cashless World (theguardian.com)
An anonymous reader writes: Dominic Frisby writes with a very interesting, albeit heavily opinionated, article from The Guardian discussing why we should all fear a cashless world. He argues "it will hand yet more power to the financial sector in that banks and related fintech companies will oversee all transactions." Every payment you will make will be traceable. While inequality is already a problem, it may be exacerbated even further in a cashless society. Frisby writes, "Cash, on the other hand, empowers its users. It enables them to buy and sell, and store their wealth, without being dependent on anyone else. They can stay outside the financial system, if so desired."
Design suggestions?
First buy visa gift cards. Then swap them around. :p
Every few months, swap your card.
When we have a cashless society we have slavery. Anyone who has deposited an out of town check has already discovered that you don't have the money right away. Oh, the bank where you deposited it has it that night. But you can't have it for up to 10 working days. This is called the "float". Banks "float" huge sums of money daily - your money - and lend it back to you and others at exorbitant interest rates. The banks, of course, keep those (up to 29% annually of the amount borrowed) interest collections. You can already, in the USA, transfer money only 10 times per month in the USA - even between your own accounts at the same bank. So already, you don't own your money and can't do with it what you please. You earned it. You've already paid taxes on your earning, but you still don't actually own what's left to do with as you please. You have restrictions on how much you can draw at a time etc. etc. Your money can be confiscated, blocked from usage and be divided by 1,000 overnight. Just ask anyone who lives in Argentina. You can literally go to bed a wealthy person, having worked fervently and saved your whole life, and wake up in the morning where every $100 you had in the bank is now only 10 cents. When your money is *completely* controlled electronically you are at the mercy of your government and the banks. Totally. You are effectively a hostage, if not a slave. I know, I've lived it already.
The difficulties presented by bartering have historically led to the introduction of an alternative currency instead.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
NIRP = Negative Interest Rates, a situation where a central bank tries to push interest rates below zero (instead of getting interest on your savings, you pay the bank to hold your cash). The theory is that THIS is the thing that will force consumers to spend their wealth, and yadda yadda, the economy starts growing and adding jobs (the reason for the 2% inflation target is similar, to make debt more attractive as one can pay it off in less valuable currency, and to institute a "use it or lose it" tax which doesn't need to be voted on by the legislature).
The PROBLEM is that if rates get too negative, then people will convert their wealth to cash. Large denomination bills enable that. That's why there has been a push on to eliminate the 100 dollar bill, under the guise of battling terrorists and criminals. The head of the European Central Bank has recently proposed eliminating the 500 Euro note for the same reason. A happy coincidence is that this makes it harder for people to convert their wealth to cash.
This won't be instituted all at once. This is how it is introduced, under a false casus belli.
A cashless society means you are a captive audience to these sorts of experiments. Additionally, while cash doesn't require infrastructure to complete transactions, cashless transactions require a great deal of infrastructure. Buying something electronically means you are requesting permission to buy - either via authentication or other constraints.
Humans have been using currency for thousands of years. Instead of hastily rushing to do away with it, we should approach the situation with a lot of caution. Something proponents most certainly do not want.
Currency is already a logical construct. The slips of paper are inherently worth very little. They don't even function that well as toilet paper (not that I would know). Currency which becomes an electronic logical construct gives a tremendous amount of power to the people running the servers. And even more importantly perhaps, their cronies.
Gold bug or not, if money became worthless or too restrictive people would find other ways. Unleaded gas, beans, rice, canned goods, there are a host of items that are as good as if not better than gold and which could easily be used to determine value. A cow will cost you 1000 cans of vegetable or 300 gallons of gas. Sure, not as convenient as saying $800 but still very workable in a pinch. A can of vegetables or a gallon of gas has a very know value to virtually everyone.
Fear is the correct word.
Few living people are able to remember the days when a wheelbarrow of cash was needed to buy a week's groceries. In various parts of the world in various times, inflation has created this situation where the traditional currency became worthless. It can happen anywhere, anytime.
The central banks who manage our financial experience can snap their fingers and put YOUR currency in that category. When that happens, you have to sell everything of value to get through the next month. When all the common people have released everything they hold dear to those who can pay (the 1%), the currency will normalize and they can buy their stuff back at the new (much higher) price.
This boom/bust cycle has repeated itself through history and is one way to keep the bulk of humanity in debt to the (sing along with me) 'one percent'. Fear is the correct word as millions have already learned on their way to an early grave. Forget history and reap the consequences.
...omphaloskepsis often...
Cute, but I think you know this isn't accurate. The worst thing that can happen to any currency is rampant deflation. It serves to make it useless, just like rampant *in*flation, but the impact is even worse. When there's not enough money supply to service incomes and day to day transactions the entire economy of labor shuts down, potentially overnight. Add that to the fact that most of the world pegs the value of their currency (either directly or indirectly) to the US dollar and you'll understand why the bailout wasn't an option, it was a necessity. Once you understand that, then you should understand why nearly every political issue up for debate should be taking a back seat to monetary policy and banking reform.
If it ain't broke, don't fix it.