Backlash Against “War on Cash” Reaches Washington & China

The electronic-payments industry, which gets a cut from every electronic transaction, wants to kill cash. But wait…

By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.

Not so long ago, it seemed that the death of cash was both inevitable and imminent. The war against physical money was advancing on all fronts. Cash, already with technological and generational trends stacked against it, faced an imposing array of enemies, including private banks, fintech firms, telecom behemoths, credit card giants, assorted NGOs, tech magnates like Bill Gates and Tim Cook, a bewildering alphabet soup of UN agencies and many national governments. All wanted (and to a great extent still want) to accelerate the demise of physical money, for their own disparate motives.

But a study released in June by UK-based online payments company Paysafe confirmed that consumers on both sides of the Atlantic continue to cling to physical lucre: 87% of consumers surveyed in the UK, Canada, the US, Germany, and Austria said they had used cash to make purchases in the last month, 83% visited ATMs, and 41% said they are not interested in even hearing about cash alternatives.

Now, even certain branches of government are pushing back against the cashless trend. In Washington D.C., city councilors have introduced a new bill that would make it illegal for restaurants and retailers not to accept cash or charge a different price to customers depending on the type of payment they use. The bill is in response to efforts by retailers in the city and around the country – like the salad chain Sweetgreen – to go 100% cashless.

Such moves have been decried as discriminatory against the roughly one-quarter of people in the U.S. who would have trouble using a card or some other electronic means of payment, not to mention those who would just prefer to use cash. “Certain underbanked customers have to use cash; they don’t have other alternatives. Other customers feel more financially responsible if they use cash as opposed to digital payments,” said Wei Ke, a partner at Simon-Kucher & Partners, a management consulting firm.

Another important institutional body that has leaped to the defense of physical money is the People’s Bank of China (PBOC), which last Friday announced that all businesses that are not e-commerce must resume accepting cash by mid August or risk being investigated. In a statement the central bank also warned businesses and individuals not to hype up the “cashless” idea when promoting non-cash payment.

Given that China is the world’s largest mobile payment market, with a record 81 trillion yuan (US$12.8 trillion) in mobile payments last year, the PBOC’s move to defend cash is significant. China was widely expected to be the first major nation to move towards a completely cashless society.

Its mobile payments market is dominated by a few Internet behemoths, with Tencent (owner of Tenpay) and Alibaba-backed Ant Financial (owner of Alipay) occupying respectively 40% and 54% of the third-party mobile payment market. In August 2017 the two companies promoted the idea of a cashless economy by distributing rewards to customers and shops using their platforms. During the marketing campaigns, some merchants rejected cash as payment, arousing complaints from customers.

The central bank deemed the refusal of RMB illegal, which prompted Ant Financial and Tencent to quietly remove the word “cashless” from their promotion materials. What the PBOC wants is to establish greater oversight and control over China’s vast mobile payments industry as well as gradually erode the dominance of Ant Financial and Tencent. To that end, it recently mandated that mobile payment groups must channel payments through a new clearing house, of which central bank-affiliated institutions are the largest shareholder.

“The regulation for non-banking payments was relatively loose in the previous years in order to support the innovative industry,” said analyst Wang Pengbo at research firm Analysys. “As it is growing much bigger, the central bank is taking more control.”

Now, the PBOC has taken its defense of cash a step further by giving physical stores just one month to get back to accepting cash or risk facing an investigation by authorities. According to Forbes, Chinese retailers’ rush to reject cash was causing “unforeseen” issues, such as excluding some consumer sectors (e.g. foreign visitors to the country, the elderly and children) from parts of the economy.

This exclusionary feature of cashless payment systems is an issue that keeps cropping up in countries that are close to eliminating cash. In Sweden, the first European country to enlist its own citizens as guinea pigs in a radical economic experiment — negative interest rates in a cashless society — the pace at which cash is vanishing is even beginning to worry the same authorities that wanted to get rid of it in the first place. If physical money disappears too quickly, it could be difficult to maintain the infrastructure for handling cash. And that may be enough to spark a crisis.

Apparently, most Swedes do not even want to live in a fully cashless economy. In a recent survey on the matter 85% of the oldest demographic, the 65-year-olds, wanted to keep cash. Even among the 18-29 year old respondents 56% declared that they still want to keep cash while 38% said they would welcome a cashless society. Their reservations will probably have grown in recent weeks, following the outage of Visa services in Europe in June, which left millions of customers across the region unable to make payments using their cards. The incident served as a reminder of one of the great benefits of cash: it doesn’t crash.

Until a cashless system can be created that is 100% safe from the threats posed by natural disasters, accidents, cyber criminals and basic human incompetence and does not exclude large swathes of the population from participating in the economy, most consumers in most countries will continue to cling to cash. No matter how aggressively banks, fintech firms and credit card companies “nudge” their customers towards digital services, the death of cash may not be as imminent as it seemed just a few years ago. By Don Quijones.

Two of the world’s biggest retailers — France’s Carrefour and the UK’s Tesco — announced plans to form a global purchasing alliance to help drive down costs as they respond to German discounters Aldi and Lidl and fast-growing online rivals such as Amazon. It’s a brutal environment. Read…  Under Fire, Biggest Brick & Mortar Retailers in Europe Seek Refuge in Cartel Economics  
 

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  92 comments for “Backlash Against “War on Cash” Reaches Washington & China

  1. Robert
    Jul 21, 2018 at 10:44 am

    ” The bill is in response to efforts by retailers in the city and around the country – like the salad chain Sweetgreen – to go 100% cashless.”
    Since the dollar is “legal tender for all debts public and private,’ what is to stop a customer at the check-out line from demanding they accept dollars? The refusal to accept dollars- in other words, renunciation of our legal tender laws- means that there should be nothing to prevent a merchant, for example, from demanding payment in gold or silver- and we know that is not permitted!

    • Matt P
      Jul 21, 2018 at 12:48 pm

      It’s not a debt until the good has changed hands. If you’re in a sit down restaurant and finish your meal, they have no choice but to accept your cash. If it’s a pay up front arrangement, then they can better dictate your payment method.

      • Cal
        Jul 24, 2018 at 10:56 am

        Of course you can always “sample” some of the food you are about to buy before paying as in a cafeteria. The only place they have you in a cashless vice is when you have to pay before the order is made.

    • van_down_by_river
      Jul 23, 2018 at 7:54 pm

      Why would you want to carry cash in the U.S. after the supreme court ruled civil forfeiture to be constitutional (despite two amendments to the constitution – within the Bill of Rights – that state otherwise).

      Any policing body, within the U.S., can confiscate any cash they find on you because, as the supreme court ruled, the pocession of cash is enough probable cause to presume the cash may have been obtained through illegal activity. The policing body may take the cash without evidence, cause or formal charges and they can do with it what they please including employee bonuses.

      Think of that the next time you pass through a TSA checkpoint – they can take any cash you have on your person. But it’s worth the cost because now you are safe.

      • Fredrick S Arnold
        Jul 24, 2018 at 11:40 pm

        Cashless? No way!! True story: Few months ago my wife and I were in a mjr grocery store in Nashville, waiting in line to check out with a full cartload. Over the speakers came this message…”attention XYZ customers, the electronic payment system is down, no electronic transactions will be processed until the system is fixed..” 
        People began griping and scrambling. We two seasoned citizens were in line and we always pay in cash.
        I asked the cashier..”ma’am, I have CASH, and correct change….may we go on and check out?” She replied “Yes you can check out now”. One other older couple had cash and the 4 of us got our food and went on our way. The rest of the ‘shoppers’ were walking out empty handed, griping and complaining and giving us nasty looks. Simple lesson for when things get SHTF-sticky and the grid goes down. Our CC was hacked twice in the last 5 years, ..we always try to pay with cash.

      • Bill
        Jul 25, 2018 at 10:01 am

        You think cashless digital bank accounts are safe? Whats to stop hackers or the government from confiscating or freezing bank accounts electronically.
        What happens when you wish to remove all funds from your bank account because you perceive an economic
        crash. What will the bank give to you in a cashless society?
        Thomas Jefferson said it best, ” a central bank is more dangerous than a standing army”.

  2. Petunia
    Jul 21, 2018 at 10:51 am

    Having lived through 5 major hurricanes and one massive flood I would advise everyone to always have some cash around. In one case I had no power at home for a week and in other cases no power around town for days. During the flood one of the biggest phone services went down too, so your mobile payments may go out as well.

    The biggest problem with going cashless for govts is that they can’t control people from using other currencies, which is probably the problem China is experiencing. Not everybody transiting thru China is connected to their mobile payments system or wants to be.

    BTW, it is already illegal in the US to reject cash as a form of payment. I think it’s part of the Federal Reserve Act of 1913. The legal tender statement on the note is there to affirm that it must be accepted as payment.

    • L Lavery
      Jul 21, 2018 at 12:14 pm

      It seems not to be the case, at least according to this site[1]. Not sure how it is in the UK or other countries. And I don’t know how you could enforce it on the likes of on line vendors such as Amazon!

      Anyway, should firms be forced to accept cash, with all the bother and cost it might entail? Accepting just cards means they don’t have to own a big safe and/or take a load of notes and coins to the night safe every evening (do night safes still exist?).

      [1] https://www.expertlaw.com/library/consumer-protection/it-legal-refuse-cash-payment

      • benv
        Jul 24, 2018 at 9:45 pm

        drop safes (your ‘night safes’) still exist. I sell and service them for a living in SF. People still break in and steal too!

    • alex in san jose AKA digital Detroit
      Jul 21, 2018 at 9:25 pm

      Petunia – Agreed. It’s all about control.

      The lights go out, your bank goes bust, your money’s gone. Cash, bank of Serta or Sealy, your choice, is best.

      • sierra7
        Jul 22, 2018 at 10:57 am

        Even though I use several credit cards, you’ll….”…..have to pry my cash from my cold dead hands!”
        Just experienced an incident at a gas station I’ve been patronizing for more than 15 years. Pump card pads were not operating correctly; inside the “swipe” “chip” reader also….refused my card (and others had the same problem)…but almost always carry a small amount of cash for emergencies….good thing.

    • elysianfield
      Jul 22, 2018 at 6:57 pm

      “Legal tender for all debts, public and private….”

      Petunia,
      More specifically, if a debt is denominated in dollars, the dollars are legal tender and must be accepted. Regarding a merchant owning a small business, he can accept or refuse anything he wants, as the debt is not generated until title to the goods exchanged…the market will define whether his judgment is/was sound.

  3. Otishertz
    Jul 21, 2018 at 11:14 am

    Cash is the last bastion of privacy. No cash no freedom

    • Argus
      Jul 21, 2018 at 2:45 pm

      Yes. I would add cash/gold/silver.

      I make a point of using cash for relatively small purchases, on principle.

      I haven’t encountered a charity that refused my cash.

    • MCH
      Jul 21, 2018 at 6:42 pm

      Freedom is overrated. Corporations like to Use words like freedom and empowerment as a feel good exercise while turning people into products or debt slaves or both. My guess is that even cash can be used to track people, after all, there are all these embedded features in the dollar to keep counterfeiters at bay. It is easy to imagine tracking features built into those strips in the dollar. RFID chips…

      • David
        Jul 24, 2018 at 4:49 am

        Really? Freedom is overrated? Maybe so, I prefer the word liberty! I personally would like to see a return of gold and silver certificates. Gold and silver are the chaperons of government! That’s why Governments and their central banker friends have had them tied up in the basement for decades….it will not end well. I can’t believe cash is suspect but everyone is happily jumping on the electronic/bitcoin litecoin etc bandwagon. The best thing I have seen come from the computer revolution is the 3D printed firearm!

      • Jul 24, 2018 at 11:44 pm

        > RFID chips…

        Microwave ovens.

        Any security feature that can’t be checked by every single cashier isn’t useful — instead of catching the criminal they catch the businesses the criminals bought stuff from.

    • Gershon
      Jul 21, 2018 at 7:39 pm

      Yet the sheeple can’t give away their freedom fast enough.

    • kiers
      Jul 22, 2018 at 3:27 pm

      US treasury, in it’s freedom loving munificence, just allowed anonymous payments to 501c3/4 etc corps, by executive fiat.

      http://fortune.com/2018/07/17/irs-nonprofit-donor-disclosures/

  4. Tom Jones
    Jul 21, 2018 at 11:50 am

    Must accept cash for all legal payments is Ignored: my landlord has never accepted cash in the decades I’ve lived here. Checks or money orders only. I suspect if we all tried paying our taxes in cash…the IRS would fold up just counting all the money. No matter what the law says about legal tender, it is meaningless when it gets in the way of business profits.

    • gary
      Jul 21, 2018 at 1:59 pm

      Sorry but I don’t think that’s a strong argument.

      A check is just one level away from cash, and with negligible fees if you have a checking account.

      It’s perfectly reasonable that landlords/caretakers don’t want to accept cash (they would be very vulnerable to robberies).

      • A Citizen
        Jul 23, 2018 at 7:09 am

        …and audits.

      • David
        Jul 24, 2018 at 5:00 am

        Yes, but for the sake of what is best for your landlord their tenants are forced into a relationship with a bank or to give up some of their money to buy a money order!

    • Frederick
      Jul 22, 2018 at 6:15 am

      I once had a landlord in NY that only wanted cash for rent payments He was a shady guy and I’m sure he didn’t declare it as income Many Times suppliers in the building trades would delete the sales tax if you paid cash Not so much anymore from what I’ve heard as the state has cracked down as they’ve gotten more desperate for the funds

    • Jul 24, 2018 at 11:46 pm

      > Must accept cash for all legal payments is Ignored: my landlord has never accepted cash in the decades I’ve lived here.

      They can still evict you for paying cash. Legal Tender doesn’t apply until there is a debt.

      So if you insist on cash, get evicted and thrown out, and your landlord refuses cash as a final payment against rent in arrears (due to the time consumed by the eviction process), then yes, in that one case Legal Tender laws will nullify that particular debt.

  5. Ishkabibble
    Jul 21, 2018 at 11:56 am

    Average people, remember three things.

    First, https://www.youtube.com/watch?v=I8P80A8vy9I

    Second, the experiences of average Greeks and Cypriots over the last 6 years.

    Third, if you don’t have your “money” or “investments” literally at hand, in your own posession, under an ever increasing number of emergency situations (because the word “emergency” is becoming more and more loosely defined as whatever the Elite and their TBTF banks desire), YOUR money in THEIR possession will be more and more at risk of either “perfectly legal” outright theft or onerous, “perfectly legal” restrictions placed on your access to it.

    Push is coming to shove. You’ve been warned.

    • L Lavery
      Jul 21, 2018 at 12:30 pm

      “Third, if you don’t have your “money” or “investments” literally at hand, in your own posession…”

      Yes – in your own possession. I didn’t think I would, but am now thinking of swapping more of my fiat savings for crypto (bitcoin in particular), at least you know you own it.

      • Frederick
        Jul 21, 2018 at 3:51 pm

        Crypto indeed Do you even know what it is you own if anything? Physical gold, silver and cash is the ONLY safe way to go Iskabibble is spot on

        • L Lavery
          Jul 22, 2018 at 3:09 am

          Yes, I understand what I own, I understand bitcoin (and how second layer solutions, like the Lightning Network, will enhance its value). With the way things are going I think bitcoin is likely to hold, if not increase, its value while fiat will lose value, hence my thoughts about acquiring more crypto.

      • RC
        Jul 23, 2018 at 2:22 am

        Not a single business in my city of 130,000 people accepts bitcoin or any kind of crypto as payment. I won’t mess with that shit until I can go to the local grocery store and buy supplies, pay my rent, pay my utilities, etc.. it’s totally worthless if you can’t actually use it for anything. On top of that, crypto has a huge vulnerability in that its existence depends on electricity. A man understands a gold coin when you show it to him.

        • Silver Savior
          Jul 23, 2018 at 6:43 pm

          I use crypto to buy gold and silver with. It’s real and it works.

    • Argus
      Jul 21, 2018 at 2:51 pm

      Interestingly, German and Swiss banks have recently refused physical delivery of big clients’ supposedly allocated gold. (This didn’t stop them from charging the higher storage fees attendant on al allocated gold account, though)
      Fortunately, perhaps, my own holding is very small and I have no need to keep it in a bank.

      The Greeks and Cypriots had no access to their ‘safety’ deposit boxes when the banks declared a holiday. In the event of a bail-in in the West, what are the chances safety deposit boxes won’t be raided along with regular accounts?

      • Rusty Brown in Canada
        Jul 26, 2018 at 3:44 am

        Well, “safe deposit box” actually. The “safety” version is a misapprehension apparently created by someone who wasn’t listening very closely.

  6. Bookdoc
    Jul 21, 2018 at 12:12 pm

    I may be a bit paranoid but the idea of leaving a paper trail any time I spend money is not appealing. I turn off all locators on my phone and am not on any social media wholesale info collection sites. After what I have seen the government doing, I want them to have only the necessary info on me and I can decide what to allow.

    • Mean Chicken
      Jul 21, 2018 at 6:04 pm

      Men at the pentagon conspire continuously yet, they portray raggedy-ass backwoodsmen as the world`s biggest organized military threat.

      Perhaps they mean well?

  7. raxadian
    Jul 21, 2018 at 12:14 pm

    Nothing is 100% safe, not even cash, so I guess the cashless society is a very long way ago then?

    • 2banana
      Jul 21, 2018 at 12:46 pm

      Yes – nothing is 100% safe.

      But over the 3,000 years of modern man – you can see what works most of the time.

      Small tight knit communities that help each other
      Nuclear families with a husband and a wife
      Sound money
      Faith that the law will be impartially administered
      Reward for hard work and penalties for the lazy
      Small and inexpensive government
      A place where honest and hard working folks are seen as a models

      And you can usually tell when a society is heaping for the trash heap of history when they ignore what has worked in the past

      • raxadian
        Jul 22, 2018 at 12:17 pm

        We have seen all those things fail quite bad. Were you being ironic?

  8. Cashboy
    Jul 21, 2018 at 1:21 pm

    I try to pay everything in cash.
    I actually draw cash out of the ATM and pay all bills I can in cash.
    I actually don’t like keeping more than £2,000 in any bank account.

    In the UK a new regulation came out in March 2018 that one is not allowed to put physical cash into someone elses bank account.
    It is also becoming impossible to go to a bank and pay credit cards, utility bills etc. with real cash. The bank clerks insist that you put the cash into your bank account and then pay the bill through your bank account.
    This is becoming a problem for me because I often am away from the UK for a couple of months and need someone to pay the bills for me.
    The young think it is cool using their apps to pay for everything electronically. They don’t seem to realise that if there was 100% cashless, the banks and governments can stop you freedom such as locking your account, unable to even pay for a flight ticket or petrol to run away from society.

    • gary
      Jul 21, 2018 at 2:08 pm

      Good points Cashboy, and I would add another danger of cashless is that the various network operators would jack up the fees once they had a monopoly on payment systems. (I think that’s actually the big one)

      • Argus
        Jul 21, 2018 at 2:58 pm

        And how long before governments introduced a small tax on every cashless transaction, since they can so conveniently track it?

        Sorry, I’ll stop commenting now but it does make the blood boil.

        • Frederick
          Jul 21, 2018 at 3:54 pm

          It’s the Russians I tell ya

    • Ishkabibble
      Jul 21, 2018 at 5:44 pm

      “The young think it is cool using their apps to pay for everything electronically. They don’t seem to realise that if there was 100% cashless, ThE BANKS AND GOVERNMENT CAN STOP YOU FREEDOM SUCH AS LOCKING YOUR ACCOUNT, unable to even pay for a flight ticket or petrol to run away from society.”
      =========

      Very good point.

      Have you noticed how every despicable act that the US has committed overseas has “flown home” to roost? Rights and freedoms and privacy of “foreign” populations severely restricted. Militarized police forces provided to foreign nations to control the populace. The removal of legal restrictions on foreign governments to propagandize their populations.

      The latest phenomenon to “fly home” from foreign-use-only is the instigation of civil war for the ultimate purpose of regime change. We see it playing out right before our eyes.

      I can already see another foreign-only phenomenon on the horizon, flying closer and closer to home right now — the “slapping of economic sanctions” on foreign nations and foreign nationals who don’t follow the US corporate Elite’s diktat. You won’t have to be told when this bird has landed. You’ll know it.

      In “our” wonderful upcoming cashless society, those members, or organized groups of members, of society who do not follow the diktat of the Elite and their TFTF banks will have perfectly legal “sanctions” “slapped” on the “money” in their bank accounts. When their behavior becomes acceptable, THEN they’ll be able to use/spend their money. Of course these people, like the people in innumerable foreign nations, will be “free” to continue their unacceptable behavior. That’ll continue to be their legal right in a free society. But they will have to figure out how to live without their money and what it buys.

    • MCH
      Jul 21, 2018 at 6:51 pm

      You mean like they can keep you from buying a plane ticket in China now with their social credit system?

      Being an old sucker and having had the experience as a young person, I can say uniformly that most young people are too stupid to know what’s going on. The best description for them is Sheeple. I should know, I was one of them… and in fact I can say that I am still reasonably sure I am stupid, the difference is that I know I’m dumb.

      • alex in san jose AKA digital Detroit
        Jul 21, 2018 at 9:30 pm

        MCH – Here you go!

        https://www.telegraph.co.uk/news/2018/03/24/chinas-social-credit-system-bans-millions-travelling/

        (There are other write-ups besides this one on the Torygraph.)

      • Frederick
        Jul 22, 2018 at 4:11 am

        MCH I don’t know You’re comment sounded very intelligent to me You should substitute “ignorant” where you used stupid for the young at least most of them anyway Some are genuinely stupid

        • Wisdom Seeker
          Jul 22, 2018 at 11:59 pm

          But, on the plus side, about half are above average!

  9. Ambrose Bierce
    Jul 21, 2018 at 1:32 pm

    The notion of one integrated global financial system is in full retreat, and the idea of defending cash is ironic (less than a year ago the experts were telling you to dump cash the government was coming for it!) Digital currency is instant and universal.

    • Unamused
      Jul 21, 2018 at 3:03 pm

      – > less than a year ago the experts were telling you to dump cash the government was coming for it!

      Which ‘experts’ would those be? Could you name a couple? Recognized ‘experts’, please, not marketing flacks.

      ->Digital currency is instant and universal.

      Well, no, it’s not. I don’t accept digital currency, and neither do a lot of people. If you seem disingenuous I won’t take your personal cheque either.

      • JD
        Jul 23, 2018 at 5:37 am

        Larry summers for one. Between naps during the obama regime, he was promoting getting rid of $100 bills ‘because criminals use them’ … it’s all about total control … has nothing to do with ‘efficiency’ or crime fighting

  10. JD
    Jul 21, 2018 at 1:48 pm

    A cashless society is one hatched in the minds of evil men … they will kill most of the homeless and those who fall on hard times

    • Unamused
      Jul 21, 2018 at 3:10 pm

      It’s another system of control. Besides, it’s so much more efficient to disappear a troublemaker’s accounts than to disappear the troublemaker. No muss, no fuss. No overtime, for one thing, and consignment to a gulag in Siberia or Colorado may be cheap but it’s not free.

      • Cynic
        Jul 22, 2018 at 2:32 am

        It was rumoured that MI5/6 in England would do this in a basic but effective fashion: go to the bank manager of a domestic troublemaker and persuade them to withdraw the targets overdraft/loan, or even close their accounts – this quickly gives someone more to think about than making waves.

        Simple, effective, and no need to bother with pesky things like the law, fair trial, etc. No need for assassination, either.

    • Frederick
      Jul 21, 2018 at 3:57 pm

      And do you think those “evil men” could care less about the homeless They would be happy to see them gone no doubt I remember a Mel Brooks movie with that theme Can’t remember the name

      • VarAway
        Jul 21, 2018 at 4:59 pm

        Not Blazing Saddles, right?

      • Lion
        Jul 21, 2018 at 8:48 pm

        Maybe “Life Stinks” ?

        I think those in power aren’t interested in the small change stuff. Probably why only paper money, not coins, are part of the Fed Reserve.

        Maybe we should go to a barter system. Of course the taxman would not like that one bit

        • Frederick
          Jul 22, 2018 at 4:12 am

          Life Stinks That’s the one Thank you Lion

      • JD
        Jul 23, 2018 at 5:43 am

        No … I don’t believe they care .. they are psychopaths … that is why I referred to them as ‘evil’ and I do not use the term lightly… they are pursuing their ideological agenda without the slightest regard for its effect … ie: all wars are banker wars
        And we know how ‘fun’ wars are

  11. Mean Chicken
    Jul 21, 2018 at 5:34 pm

    “Now, even certain branches of government are pushing back against the cashless trend. In Washington D.C., city councilors have introduced a new bill that would make it illegal for restaurants and retailers not to accept cash or charge a different price to customers depending on the type of payment they use.”

    This is great news b/c as a result of being a bonafide tightwad, I have a literal ton of pennies I need to unload and I just noticed that unlike my stacks of $2 bills acquired long ago, “Legal Tender” isn’t stamped on them anywhere! ;)

    • Frederick
      Jul 22, 2018 at 4:13 am

      Take those pennies and go out and get yourself a Burrito (:

    • Setarcos
      Jul 22, 2018 at 9:02 am

      If the pennies are pre-83, they’re worth over 2 cents in copper value.

  12. Stan
    Jul 21, 2018 at 5:56 pm

    I wonder if the pushback against a cashless system in China might be related to the corruption at all levels of society (especially among government officials). After all, those thirsty AIs will be tracking and compiling everything into your “Social Score” automatically soon, and cashless (under the table) transactions could negatively affect your place in society. I suspect there will always be a powerful demand for cash from the informal economy, the criminal economy and the corruption economy. These forces may be powerful enough to prevent a totally cashless system.

    • Mean Chicken
      Jul 21, 2018 at 6:17 pm

      If they can get you asking the wrong questions, they can prepare comprehensive answers in advance.

  13. JB
    Jul 21, 2018 at 7:01 pm

    If i am not mistaken when you deposit money in the bank you become a unsecured creditor . You may have your money converted to equity via a “bail in”. cash is king . as always great reads.

    • Jul 21, 2018 at 8:01 pm

      Yes, in the US, your deposit is an “unsecured” loan to the bank, but it is “insured” up to $250,000 by the US government (FDIC). Even during the big bad Financial Crisis, no insured depositors lost a dime. This includes me with a CD at Washington Mutual (5 year, 5.5%). It was transferred to another bank over the weekend. And on Monday morning, only the name changed. Interest and principal were there, no problem.

      You can have a lot more of FDIC insured deposits if you follow the FDIC rules….

      https://www.fdic.gov/deposit/deposits/brochures.html

      • Mean Chicken
        Jul 21, 2018 at 9:54 pm

        There’s some conflict of interest issues between FDIC and banks gambling in the market using other peoples money, IMO.

        • Jul 21, 2018 at 11:54 pm

          Big time. The FDIC is a much stricter regulator and opposed many things that the Fed, which dominates bank regulation, allows.

      • Frederick
        Jul 22, 2018 at 4:15 am

        Yeah great Your deposit of printed fiat is insured by more printed fiat Isn’t this a sort of Ponzi scheme and don’t you realize that it will end very badly for the latecomers to the party? Got gold?

      • Ambrose Bierce
        Jul 22, 2018 at 11:55 am

        The difficulty is that retail banking has become an obsolete business plan. At some point the government will stop propping up the system (when taxpayers revolt) Keeping idle investment assets in gold makes more sense, we have seen the last of interest rates at a premium to inflation, even the 30yr offers very little premium. The beauty of bonds is that they can be collateralized, and their principle value set according to the market. The risk in cash is far higher than its reward. Course it might be possible to sew gold threads in a hundred dollar bill, the notion of deposits which provide reserves for loans implies a virtuous circle which no longer exists and with it traditional banking. The Fed is master of nothing, which is your ah ha moment.

  14. Todd H.
    Jul 21, 2018 at 7:19 pm

    Cash is king, but our system is in need of a few changes:

    1) Replace the $1 and $2 notes with metallic coins.

    2) Promote George and Tommy from the $1 and $2 notes to new $500 and $1,000 notes.

    3) Replace the paper/cotton currency with a new polymer material as in Canada and Australia. It is nearly impossible to counterfeit.

    • JB
      Jul 21, 2018 at 10:55 pm

      i agree , when i asked the bank teller for a note larger than a $100 , she told me she has not seen a note denominated greater than $100.00 in years and certainly didn’t have any “in stock. ” silly me

  15. Beth
    Jul 21, 2018 at 7:59 pm

    Sweden has been promoting a cashless society for tax evasion and money laundering purposes but now realizes that the consequences instead lead to a total loss of control the the country’s currency. Abolishing cash makes their Central Bank powerless.

    • cdr
      Jul 22, 2018 at 7:43 am

      no, abolishing cash goes hand in hand with NIRP.

    • nick kelly
      Jul 22, 2018 at 9:45 pm

      When the Fed created trillions in liquidity to bail out banks, it didn’t physically deliver most of it as cash. It was done electronically.

      The Fed could e-credit every bank account if it had to.

      Of course there was a need for actual cash (at one stage requiring the Swiss to help print 100’s) but the Fed paid for the printing electronically.
      I can’t see how lack of physical cash limits the Fed or other CB.
      I would have thought it increased their control.

      Bu I don’t understand all kinds of stuff.

      Post a link if you can I’d like to read it.

  16. vigilant
    Jul 21, 2018 at 9:21 pm

    I think it amusing many people are so concerned with cash vanishing when they really don’t even have the right to vote. They’re provided two equally bad candidates (At least one of which is pre-selected by the elites. )

    I like cash for many of the reasons stated above but I’d say it’s days are numbered. It will survive only if the people get the right to vote for something other than the dems or republicans.

    If the powers that be can take away your right to vote and no one complains, I forsee a similar fate for cash.

  17. Laughing Eagle
    Jul 21, 2018 at 10:10 pm

    Cashless – o’ yea, in that environment you will always have to move your money before a bank does a IT upgrade-LOL. see Wolfstreet. July 10th.

  18. Kenny Logins
    Jul 22, 2018 at 4:20 am

    Cashless would be funny when it stops working for whatever reason.

    Society would collapse within days.

    Or when the rulers want to indefinitely borrow your money to save society.

    It’ll never happen. It’ll get close, then with many things, twang back to a sensible middle ground.

    Trying to hinge the function of an entire society on one vulnerable technology with no backup is guaranteed to have a finite lifespan.

  19. Laughing Eagle
    Jul 22, 2018 at 6:37 am

    The idea eliminating cash will prevent tax evasion and money laundering is another amuzing reason the banks want to use, but read “Panama Papers” at https://www.icij.org.
    The elites can hide money at offshore accounts to do both.

  20. cdr
    Jul 22, 2018 at 7:33 am

    Sorry, but the electronic payments industry is not working the War on Cash. Selling the use of plastic might be more accurate.

    The actual War on Cash is a EuroZone creation caused by Negative Interest Rates, NIRP. With NIRP, it costs you money to save money if you put it in a bank or buy high quality debt. You will always withdraw less than you deposited.

    Capital controls, aka the war on cash, makes cash go away and replaces it with electronic money. Otherwise, normal people will just hide their money in a mattress and avoid paying the bank or government to hold their cash for them.

    NIRP is a form of taxation in the eurozone and it helps sort out Target2 imbalances.

    • Jul 22, 2018 at 9:11 am

      CDR,

      I suggest you read the following, straight from the horse’s mouth:

      BTCA [Better Than Cash Alliance] is a new global alliance that brings together private sector companies, governments, and development organizations – all dedicated to promoting the transition away from cash to electronic payments. The use of technology to transition from cash to electronic payments reduces costs, has the potential to increase transparency and accountability, diminishes security risks, enhances access to financial services for the poor and can drive inclusive economic growth, with a potential for women economic development. BTCA is funded by the Bill & Melinda Gates Foundation, Citi, Ford Foundation, MasterCard, Omidyar Network, U.S. Agency for International Development and Visa Inc. UNCDF serves as the BTCA Secretariat. BTCA is looking to expand in a number of SIDS. The total cost of the project is 38.2 million USD.

      Source: https://sustainabledevelopment.un.org/partnership/?p=7507

      • cdr
        Jul 22, 2018 at 4:53 pm

        No disagreement about that. Without national support with central banks in the middle, it’s only a fantasy no matter how influential the proponents. It’s like healthcare and asking the insurance companies and drug companies to design the nationalized plan, with central bank assistance.

        Re the EU, remember the bits about eliminating the 500 euro note to ‘stop criminal behavior’. I see a testing of the waters. It failed although the EU is becoming a little more repressive each year – like the proverbial boiling of the frog 1 degree at a time.

        Also, off topic, but I love Google and the 5 Billion fine … this is what they can expect here in a decade or so if their view of economics grows here. Somebody has to pay for it. Probably ‘the corporations’ … ha ha. They got what they asked for, literally.

        • cdr
          Jul 22, 2018 at 5:02 pm

          The 1st paragraph is a little convoluted but, w/o central bank support and control, the research paper is a big fat fantasy within a dream for who know what purpose, other than to make third party payers for commercial transactions a little better off. Get some skim off of every transaction everywhere.

          Maybe they want enforced elimination of paper billing and statements as a compromise?

      • Wisdom Seeker
        Jul 23, 2018 at 12:06 am

        If “team cashless” has friends like those, I’m definitely an enemy.

  21. Gershon
    Jul 22, 2018 at 9:08 am

    Puerto Ricans learned the hard way that after natural disasters, cash is king.

    https://www.bloomberg.com/news/articles/2017-09-25/king-cash-may-reign-for-weeks-in-storm-ravaged-puerto-rico

  22. R Davis
    Jul 22, 2018 at 10:32 am

    Common sense prevails.
    If one were to get caught up in red tape.
    The establishment do not have our backs.
    Great article & good news.
    Thank you.

  23. Ishkabibble
    Jul 22, 2018 at 10:42 am

    The results are in. The most “advanced” nation in the world is …………………………..(gulp) ESTONIA!?!? Repeat ……………….. (gulp) Estonia!?!? Whoda thunk it?

    https://www.youtube.com/watch?time_continue=18&v=2frpU6nkb_I

    The thing that I really, really like about that video is that it fully exposes the “utopia” that the trans-national Elite are trying to bring to fruition — in this case, with Estonia chosen as their real-world experiment in which, as B. F. Skinner would put it, absolutely all the variables (positive and negative reinforcements of all types, as well as their “schedules” of delivery) can be carefully manipulated and results recorded.

    I find the responses of the Estonians to their card-carrying, digital-money-only experimental existence to be interesting. I can’t help but think of how the “residents” of Treblinka might have answered the same questions, knowing full well, of course, that everything about their behavior of answering the questions was being carefully monitored by Big Brother.

    The responses of the Chinese women interviewed about their opinion of “bad people” in China’s miracle economic system was pretty telling, too.

    What might be interesting would be to watch the “progress” of Estonia and Estonians over the next few years, using the internet, of course, but, the internet of today rapidly becoming the fully-censored internet of tomorrow, the results might not be indicative of the actual situation. Better to take a vacation to the most advanced nation on planet earth to decide for yourself it’s a utopia for average people.

    That being said, however, compare Estonians’ existence to the people living in the other recent Elite experiments in Mexico, Greece, Cyprus, Afghanistan, Iraq, Yemen, Somalia, etc. etc. The results of the latter aren’t looking good, but the secret to “success” is to keep try, try, trying.

    Speaking of cashless experiments, have you noticed that after decades of careful investigation, the people of Argentina (in reality, the Argentinian Elite) just MAY have finally found a unique solution to all their economic, political and social troubles?
    https://en.mehrnews.com/news/135942/Argentina-to-host-US-military-bases

    “Be careful what you wish for because you may get it.” So don’t cry for those soon-to-be-even-poorer average Argentinians when they get exactly what they deserve from their Elite’s US rescuers.

  24. Ro
    Jul 22, 2018 at 2:03 pm

    Great read! Happy Sunday all!

  25. Anon
    Jul 23, 2018 at 12:43 pm

    What never ceases to amaze me – let alone all of the other countless reasons cash should not be obsolesced – is that if a not improbable at all solar storm/Carrington Event occurred, a cashless society would doom an untold amount of human beings with no means to purchase food or shelter.

    Further, it was not that very long ago that our dear Public Servants™ instituted quite punitive tax penalties for using credit, penalties which exist to this day.

  26. nocte_volens
    Jul 25, 2018 at 2:25 pm

    I rarely use cash. However, I keep cash in my safe. I think the consequences of something going wrong with a cashless system makes cash necessary and desirable.

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