In a Cashless World, You'd Better Pray the Power Never Goes Out (mises.org)

schwit1 quotes the Mises Institue: When Hurricane Maria knocked out power in Puerto Rico, residents there realized they were going to need physical cash — and a lot of it. Bloomberg reported that the Fed was forced to fly a planeload of cash to the Island to help avert disaster. "William Dudley, the New York Fed president, put the word out within minutes, and ultimately a jet loaded with an undisclosed amount of cash landed on the stricken island. [Business executives in Puerto Rico] described corporate clients' urgent requests for hundreds of thousands in cash to meet payrolls, and the challenge of finding enough armored cars to satisfy endless demand at ATMs... As early as the day after the storm, the Fed began working to get money onto the island."

For a time, unless one had a hoard of cash stored up in ones home, it was impossible to get cash at all. 85 percent of Puerto Rico is still without power... Bloomberg continues: "When some generator-powered ATMs finally opened, lines stretched hours long, with people camping out in beach chairs and holding umbrellas against the sun." In an earlier article from September 25, Bloomberg noted how, without cash, necessities were simply unavailable:

"Cash only," said Abraham Lebron, the store manager standing guard at Supermax, a supermarket in San Juan's Plaza de las Armas. He was in a well-policed area, but admitted feeling like a sitting duck with so many bills on hand. "The system is down, so we can't process the cards. It's tough, but one finds a way to make it work."

Comments

Another reason why bitcoin is garbage

[Khyber]

The second you lose power, you're fucked. This is why cash is king, always has been, always will be.

Re: Another reason why bitcoin is garbage

[ceoyoyo]

What do you think happened before every corner store had an electronic terminal? Credit cards still existed. You put all your cash, credit slips and cheques in a bag and hotfooted them over to the bank. Someone at the bank looked through them, reconciled the accounts, and gave you a (paper) statement telling you if any of the cheques bounced. If someone blew their limit on their card, that's between them and their CC company.

Yeah, cash is pretty handy when there's no power. It's not the only option.

It's quite funny to see these dire stories about what happens when you lose power. As if credit cards and cheques didn't exist before electronic banking terminals in every store.

The more efficent the more brittle

[DarkOx]

The fact is that the more tightly integrated our society become the more brittle it gets. Specialization is more efficient but it also means "no man is an island."

Skipping intermediary exchange mechanisms like cash and doing direct transfers between accounts is faster but it also means you can't conduct exchanges when the machines that handle the accounting are not available. With cash, and even paper checks, you pay me now and I have some reasonable assurance that the money will be available for my use some time in the future.

Here is the thing though. If we have another 3-7 day blackout like the 2003 one, cash and checks will let everyone muddle thru. Where as all electronic payments being the only means would basically cause the economy to grind to a halt. If the mainland US experienced devastation like Puerto Rico just did and it was national not regional. I don't know super volcano, DPRK EMP delivery, some kind of freak mega storm, than nobody smart is going to be interested in cash!

Face it we would NOT come back from those events as a nation. No matter how big government gets there is no way a coordinated response could be manged on that scale, which means people would have to take matters entirely into their own hands. At that point its barter system at best and that is assuming local leadership/law enforcement can keep some kind of order. I actually think there is a possibility that would occur in a lot places. I suspect most sensible folks would realize that our survival is best served by at least regional cooperation. On the other hand I can see things going pretty mad max too.

Save coins.

[Z00L00K]

Since when you get to a situation where you don't have any choice anymore but cash then coins are the best alternative. It's tough to get change from the shop keepers if the power goes out.

But also realize that shops can't even do anything when the power goes out because everything has barcodes, a carton of milk and a loaf of bread will be impossible to buy.

Re:Save coins.

[Misagon]

Shops will still have price labels, if not on the goods themselves then at least on the shelves.
Electronic shelf labels with LCD's or e-paper run on batteries - not the grid - and battery lifetime is on the scale of five to ten years.

Re:Save coins.

[Kludge]

With cash and coins in circulation, it does not matter whether shopkeepers have coins or not, they can request them from their customers. Last week the guy ahead of me in line tried to pay with a 100 dollar bill, but the store keeper did not have change. I gave the guy 5 $20 bills and took the $100. He paid and left, as did I.

People have been selling milk and bread for thousands of years without barcodes or machines that read them. You just have to know the approximate price of the item, and take the money. It's not rocket science.

Another reason why cash is garbage

[DontBeAMoran]

The second you lose power, you're fucked unless you already have cash on hand and until superinflation happens it which case it's only worth something as toilet paper. That's why gold doubloon is king, always has been, always will be.

Re:Another reason why cash is garbage

[Calydor]

"After stealing the world's biggest diamond, you flee into the desert to evade capture. Two days later, parched and about to die of thirst, you come upon a man who offers you a glass of water in exchange for the diamond you stole. What do you say?"

Re:Another reason why cash is garbage

[TheMeuge]

Always found this to be an illogical and frankly dumb point of view, because somehow you think that in a world where the society has collapsed enough to worry about "someone with more guns and henchmen", you are somehow safer without a weapon. I think history pretty much says you're full of shit. I can't think of any chaotic time or circumstance when someone thought "I wish I were more defenseless."

Re: Another reason why cash is garbage

[dgatwood]

Not to mention that in the absence of a functioning bullet manufacturing company (or at least a large supply of black powder, primer caps, and material to make new bullets), a gun is a very short-term tool for survival. It's smarter in the long run to buy a crossbow, materials to repair it when it breaks, and lots of reusable arrows. With that combination, you'll still be hunting decades after the guy with the gun ran out of bullets and died of starvation (unless he used the gun to steal your crossbow, of course).

But the better strategy, really, is to have a group of people who trust and help one another. That way, one of you has the gun just in case people with a gun come to try to steal your crossbows, and the rest of you have crossbows and can be out getting food. There's strength in diversity.

Far worse than electricity

[markdavis]

>"In a Cashless World, You'd Better Pray the Power Never Goes Out"

Or malware. Or a network problem. Or ID theft puts a freeze on your accounts. Or someone maliciously attacks your records. Or your device/card/whatever dies for some reason. Or you need to transact with someone who just doesn't have the necessary technology.

In a cashless world, you also give up every last bit of privacy left, because you can neither sell nor buy without the mark of the b..... I mean, without the tools and permission of the government and big business. Everything you buy and sell will be recorded and available for review immediately and any time in the future- revealing not only what you buy, but from whom, when, and where you have been. It also makes it easier for someone to tamper with those records to assist in framing you.

Don't be quick to give allow cash to disappear, you might regret it and there will be no going back.

Re:Far worse than electricity

[Stephen Battleware]

I tend to agree here. There' are several good reason to keep paper notes. And by using them you keep them relevant, so don't be afraid to swing by your favourite ATM and take out a few bill now and then.

Re: Yup, the Digital Panopticon again...

[Stephen Battleware]

One wonders who the real criminals are sometimes, eh? I've read it gets worse, as not only will they steal someone's cash, some of these police organizations will march same to a bank machine and have their victim clean out his/her accounts. So if you ever visit the US, don't take all your bank cards.

Visa/MC get 2.5% of the economy

[DogDude]

Visa/Mastercard get 2.5% of the ENTIRE ECONOMY in a cashless world. People who don't use cash don't think about this and apparently don't care.

Here's a crazy idea

[rsilvergun]

why not stop tying basic survival to whether you've got cash on hand? Why don't we stop fighting among ourselves (while the rich and powerful take 50-60% of everything) and actually help people out when disaster strikes instead of blaming them? I know, I know, the answer is literally in the last sentence I wrote, but a man can dream can't he?