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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."
I guess it's going to be back to Barter World...
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
If you give government a power, it will use it -- for its own purposes. Government is a business that makes money for its employees by inventing new ways to control you. Sure, it sounds like guy who lives in a van down by the river talk. The media and the $200k per year professors disagree. But history is clear on this: government serves itself, in the name of your best interests. Be cautious :)
Cashless society means that Visa, Mastercard, and AmEx can impose sales tax on everyone in form of transaction fees.
Slashdot's "Digital" category was actually created for stories related to the Digital Equipment Corporation https://en.wikipedia.org/wiki/Digital_Equipment_Corporation hence the icon.
Maybe the category needs to be retired, or given the number of stories that have erroneously had it applied to them, maybe the icon need to be changed.
Carefully consider the trade offs is more accurate.
As with most changed they are new problems that needs to be minimized and benefits to take advantage of.
Stories love to use fear. Real life is more boring and more able to plan and control.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Using paper money, backed by nothing, certainly requires a financial system.
Design suggestions?
First buy visa gift cards. Then swap them around. :p
Every few months, swap your card.
You know that cash value changes over time. Its value does not depend on gold reserves anymore. In the case of a zombie apocalypse or stock market crash, cash paper might become as valuable as toilet paper. Do you remember this African country, Zimbabwe? Its paper money became useless, so useless they had trillion dollar bills printed. So it is not a good idea to keep cash forever.
Operation Choke Point https://en.wikipedia.org/wiki/... is an illustration of what can happen. Porn actors, gun auctioneers, and other people that the government didn't like, suddenly found themselves denied bank accounts. The government's flimsy excuse was that these *MIGHT* be doing something illegal. This is on par with the IRS going after conservative non-profits.
At least for now, people can still put cash under their matresses. Even so, the police often seize cash from individuals carrrying large amounts. But imagine what happens when there is no cash option. You can't get paid because you have nowhere to deposit your "money".
Just because you're not a porn actor, or gun auctioneer, doesn't mean you're safe. "First they came for the porn actors, but I wasn't a porn actor... etc". Be very, very afraid.
I'm not repeating myself
I'm an X window user; I'm an ex-Windows user
I don't know any transsexual hookers who take bitcoin.
You are welcome on my lawn.
Isn't cash similarly not-really anonymous though? Each bank note has a unique serial number on it which could easily be scanned and recorded with modern technology making transactions pseudo-anonymous if businesses were required to scan the notes for each transaction and banks record the notes you withdraw etc. Of course that would not cover everything but it would probably cover enough that authorities could use it to track people in. This makes it similar to bitcoin in that tracking the currency takes some effort but is not impossible.
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 one nice thing about the 'cashless economy' is that(unlike a great many awful ideas) both its backers and its detractors actually largely agree on the reasons for why it will be awesome/awful; they just phrase them slightly differently. More commonly you have to deal with one or both sides fundamentally disagreeing on what the effects of the plan will be, which requires you to sort out the fact of the matter, rather than just disagreeing on whether the effects are good or not.
The enthusiasts say "Hooray, saving the un-banked from their precarious existence and enabling access to financial services!" The detractors say "feeding the last holdouts and previously inaccessible markets into the maw of the financial service industry." They aren't actually disagreeing. The enthusiasts talk about the glorious transparency and ability to crack down on bribery, embezzlement, slush funds, and various similar things. The pessimists note the relentless and inescapable scrutiny and the ability to crack down on basically any flavor of transaction you don't much approve of. Again, not really a dispute over what the plan will do. Optimists extol the ease and convenience of frictionless electronic transacting without tedious stacks of paper. The less sanguine note that that's pretty much exactly what team Behavioral Econ says is the recipe to maximize impulse spending and consumer debt accumulation.
Any given system over time is only going to be reconfigured over time to favor those with power. By those with power. In capitalism, power being money.
This drift may be too subtle to notice, but it's obvious if you ponder the effect's foundation, not the effect's subtlety.
I'm not trying to be moralistic, even the benefactors may be unaware in cases where it's just a natural consequence of the imbalance.
This same line of reasoning identifies that giving more/all control to the financial services (banks) will see drift from the lopsided influence, the only debatable point being how much.
The fundamental problem is the "scourge" of crime.
Unfortunately, we're in a state of Industrial level crime: from cartels, to terrorism, to state sponsored shenanigans.
Most of these cash free laws aim at abetting crime. Cashless laws are supposed to stifle money laundering, ransoms, drug payments, gun payments, etc.
Anonymous transactions enable criminal transactions.
But free societies need to allow for crime, especially low grade crime. Nobody wants cartels, or terrorist groups, or even state sponsored shenanigans. But I do want to be able to pay people under the table for painting my fence. Or buying some weed on the street corner. Or buying a stolen stereo from the back of somebodies van.
With the pervasive surveillance society, we can't prevent crime, but we can post-mortem hunt down the perpetrators. We can run the tape back. Watch the guy with the knife walk backwards out of the convenience store in to his car. The car drive backwards down the street. The broken window suddenly reassembling itself as the guy pulls the hammer out of it and walks backward to the back alley, where he rides his bicycle backwards to his house.
But, we've been solving petty crimes like that forever using classic detective work and simply relying on people being people, and criminals being stupid.
That pervasive surveillance that nailed this guy with a mouse click is so oppressive as to stifle the real creativity of society. The growth of society. The change of society.
Adding money transfer tracking just broadens the net.
Cartels and terrorism are social issues, not criminal issues. It's a different category of ill. But pervasive surveillance, is worse.
"That is how it was done for thousands of years" is one of the worst arguments you could make for doing something. Especially on a tech site. 0/10.
-- Let us endeavor so to live that when we pass even the undertaker shall be sorry. -- M. Twain
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.
This article is very US Centric and ignores many facts and counterpoints, one of which is Canada, which is already a cashless society for all intents and purposes (were down to only 44% of transactions using cash and it falls by roughly 10% a year). Furthermore it makes the assumption that a cashless society incurs costs on the poor, when that is only true in the USA where undertaking of the poor is an epidemic and Visa and Mastercard have a vice grip on the debit card industry, charging high fees for merchants and consumers. Thesent are US specific problems, not problems with cashless societies in general.
It's not like the government would ever make it illegal to own gold!
https://en.wikipedia.org/wiki/...
Reality check. You believe that paying with a credit card does not cost more than cash? You may not see the cost as it may be charged to the store instead of you, but you pay in higher prices for all goods and services. In fact you not only pay higher costs for all goods and services because of a card, you pay for the theft on all of those insured cards.
If the banks did not make money from cards do you think you would get them for free? How do you think they make money on those cards without collecting service fees that you pay for? Those are rhetorical questions, don't continue to prove PT Barnum correct.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
Using paper money, backed by nothing, certainly requires a financial system.
The gold bar at Fort Knox weighs about thirty pounds. Even in more manageable form, coin or bullion isn't practical for anything but the simplest of transactions. You need vaults, you need guards and armored couriers. You need standards of weight and measure.
You need stability --- which means at the very least that someone has to regulate the amount of gold in circulation.
The 1869 Black Friday financial panic in the United States was caused by the efforts of Jay Gould and James Fisk to corner the gold market on the New York Gold Exchange. It was one of several scandals that rocked the presidency of Ulysses S. Grant. When the government gold hit the market, the premium plummeted within minutes and many investors were ruined. Fisk and Gould escaped significant financial harm.
Cornering The Market
You WILL embrace it. For it is written, for it is done. You can toss all the hunnerd dolla bills at your monitor all you want. Amazon won't send you shit.
So many comments and so few mentions of the mark of the beast?
What people value in money is the ability to spend it as they wish. A cashless economy removes this freedom. This will drive people to seek other means of trade. Expect barter, silver, gold, bit-coin, soup cans, laundry detergent bottles, whatever.
I heard some people discuss alternative currencies on late night talk radio not too long ago and the expert they had brought up several means to bypass reserve notes and coins. The topic was not on a cashless society exactly but more generally about the value we place in government issued money.
One thing mentioned in this talk show was the potential use of currency from another country. There are laws already existing in the USA protecting the right of people to keep foreign bank notes. For a cashless society to work then laws like this would have to be repealed to prevent people from just using Euros or whatever, not that it'd prevent it completely but it would drive it underground.
As mentioned in the article there's just too many transactions where electronic transfers just aren't suitable. There's a lot of charities and such that live on small cash transactions, we even have a name for them, "a penny drive".
Oh, and the biblical reference to a mark of the beast will cause a problem with a lot of people.
I am armed because I am free. I am free because I am armed.
You know, actually anonymous instead of pseudo-not-really anonymous.
Design suggestions?
Pointers to existing "bitcoin 2.0 the actually anonymous version" projects?
Bitcoin core developers are highly motivated to introduce better fungibility or privacy features to the blockchain. Right now a user can use Bitcoin in a mostly anonymous manner (Absolute anonymity doesn't exist) but must be careful and take several steps where these new features will further automate privacy. Some wallets already have some of these features built in like eliminating address reuse (unique addresses for every tx ) and coinjoin mixing services built in but we really want it done at the protocol layer where privacy is by default and one has to choose if they want to be transparent. Confidential Transactions looks promising , but we may go with something on a 2nd layer to add privacy like the lightning network if CT cannot be made more efficient .
https://elementsproject.org/elements/confidential-transactions/
This isn't a theoretical, academic problem. In 2013, the Cyprus government made a shock announcement, stating that they would be taking a "one-off" 'bailout levy' of 10% from any accounts over a certain balance value. Article on BBC News here:- http://www.bbc.co.uk/news/worl... This was proposed because Cyprus, like Greece, had a failing economy and owed the European Central Bank some $13 Billion as part of a loan repayment. The economy was tanking, the government didn't have the tax revenue, so they decided to go after the savers. The really wealthy in Greece kept their money off-shore and were not hit, but ex-pats from other EU nations could have been hammered if this went through. The interesting thing was that before the proposal was announced the Cypriot government put rules in place to prohibit people withdrawing their cash [since that would have started a run on the banks]. We should not underestimate the danger of this proposal.
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.
It works just fine until the government makes them illegal to sell.
What is the point of your post exactly?
No alternative currency or system of exchange or even barter would be immune from that.
There is no need to charge a direct service fee for credit card purchases. In the US, businesses and banks hid this long ago so the fees behave much like a tax. Store estimates 200 card transactions/week and the bank charges the business 2.00 per. So the cost of everything gets elevated to cover the 400.00 that is going to the bank.
That it is not called out as a separate line item on the customers bill does not mean that the bank is not making money on every transaction and that _everyone_ is paying additional fees to cover the difference. We are also paying for fraud on those same types of transactions, but they hide those costs too. Marketing people are not stupid, and if people saw these fees and how much fraud they paid to cover they would potentially not use the cards.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
Quick, somebody teach all the hole in the wall cash only restaurants we know and love to use ring signature based alternative cryptocurrencies. /s
Right now we are advising all our clients to put everything they've got into canned food and shotguns.
Time to corner the market on can-openers and shotgun shells, I guess.
When our name is on the back of your car, we're behind you all the way!
This idea was part of the plot of Margaret Atwood's excellent The Handmaid's Tale.
The story is about a post war world in which fertility has plummeted due to the use of chemical weapons (I think), and the US is now run by an ultra-conservative christian authoritarian government (think a Christian version of Saudi Arabia), and the limited number of fertile women are essentially "breeders" (the Handmaids of the title), slaves who bare children for the ruling elite. It's a fantastic dystopian novel.
The authoritarian regime that controls the US in the story did away with cash. Then at a later point they simply suspended women's access to any kind of payment system. Without recourse to cash they were utterly powerless. I've always felt The Handmades Tale was a far scarier book than 1984 (which is also great), because it seemed much more plausible, especially as such societies essentially already exist.
Unlike some of her other books, The Handmaid's Tale is a short and quick read, well worth an evening or two.
Paul Leader
That would be their daddy's P-38. Or the can opener on each of their many multi-tools, or just use one of their many big knives. Demand for can-openers not likely to be as high as you expect.
I'm too lazy to compose a creative sig.
You don't need a can opener, just a rough surface like (relatively smooth) concrete, or even a smooth stone. Rub the top of the can on it until you wear through the outer layer of crimped over metal and the lid pops right off. Just sayin'...
Found the gold bug!
Remind me again, was it the Illuminati or the Lizard Men who took us off the Gold Standard?
This is lame. Why do you assume that advocates of hard currency believe in lizard men? While I don't support going back to the Gold Standard (too restrictive) it is not a completely unreasonable position. It's not on the level of believing in lizard men from outer space.
And it was Nixon who took us off the Gold Standard.
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
I couldn't agree more. I would add that during the process you described, the government should have made it their first priority to correct the issues in monetary policy that caused this. Not through regulations and increased bureaucracy but through identifying the systemic causes and creating policy to correct the root of the problem. The ultimate conclusion would have been nationalizing the central bank and money creation process through a slow but steady increase of the fractional reserve requirement. The central bank could then have exclusive "new money" lending rights by maintaining a central credit database, and registering private banks as brokers of new money loans instead of creators.
If it ain't broke, don't fix it.
Canada offers gold and silver ETFs which they at least claim are backed ounce for ounce with the physical reserves of the government. You can actually send an armored truck to pick up your metal at the mint in Ottawa. How are you going to prevent Americans from owning that?
By eliminating cash and controlling all digital transactions, of course! This right here is a great case for cash. Once cash is gone, financial institutions will have the ability to deny any transaction. Remember when Mastercard refused to process donations to Wikileaks? Well what would happen if you only had a Mastercard to pay for things? Sure, there are other methods now but it doesn't take much imagination to get to a time when laws prevent certain transactions. Heck, that the case now, except cash enables us to get around them. It's not just about buying drugs or whatnot, it could be about diversifying financially, as you describe. It's just a bad idea to insert a middle-man into every single transaction. It's a recipe for oppression and control.
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
Apply a little heat to your coins, and presto, they're jewelry and exempt. After the dollar devaluation, your savings would have been intact, while everyone else's savings lost significant purchasing power.
In 1910, 20 troy oz. would buy a new car. Still does, today. Had you obeyed the 1934 dictate, the paper receipts ($20 bills) you received in exchange wouldn't buy much more than the front bumper today.
True but let's not forget Roosevelt and Breton Woods which effectively took us off the gold standard. Nixon ended the facade.
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond
This is why most preppers collect "junk" or Constitutional silver. It's a lot easier to handle day-to-day small transactions because it's recognizable and hard to inflate. Gold is for storing long-term wealth, not buying milk and bread.
Note that I agree with Bill Still wrt monetary reform. But in a post collapse scenario, silver will be king along with alcohol, cigs medical supplies and knowledge and anything of actual use. Search shtfplan.com for Bosnia. That's how it'll prolly turn out, assuming no large-scale nuke warfare.
In a total collapse, people *might* accept silver but I'm not sure constitutional silver is going to do you any good. The average person can't tell the difference between a silver quarter and the silver plated coins we have today and even if they can, what makes you think anyone will trust it more than the money that just collapsed? Sure, you can make arguments all day long but I'm not sure it's a sure thing as it's still just symbolic and has no real use in the day to day. On the other hand, gasoline, food, ammunition, and medicine are useful in any scenario. My first gut reaction is to figure out how to create antibiotic ointment in my basement as this would be a very valuable skill. This, however, only works in a stationary scenario where people trust or can see that your antibiotics actually work and you're not selling snake oil. Hundreds of pounds of food is also problematic if you're on the move. For price/weight ammunition would probably be one of the most valuable but is a very fixed supply and very hard to manufacture without a bunch of heavy equipment. Skills and physical labor are about the only highly portable currency that are a sure thing. The best thing is to stay in one place where you can gain trust from your neighbors and stockpile food and don't have to worry about portability. If I was going to be a prepper, I would try to find a way to have a 3 year rotating stock of canned goods, gasoline, and ammunition and forget about gold/silver. After that, I would try to acquire the skills for creating gun powder, reloading shells, and creating basic antibiotics and other commonly needed medicines in my basement. Oh, and gardening skills.
So, did you get that rant from a Federal Reserve executive or a random crack-addled homeless man off the street?
Deflation means the money you have is worth more, not less. Do you really think that giving money to the same people who gambled it all away in the first place is going to make the economy better? If so then you are a complete fool. They only way to fix such a financial crisis is to let the banks fail, hold the shareholders personally accountable, any "stimulus" has to be given to the people who lost their money to the banks, and then break up any remaining large banks.
If you have any criticisms of this method Iceland would like to have a word with you.