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The War On Cash Is Advancing On All Fronts: "First They Came For The Pennies..."
Submitted by Don Quijones via WolfStreet.com,
The War on Cash is advancing on all fronts. One region that has hogged the headlines with its war against physical currency is Scandinavia. Sweden became the first country to enlist its own citizens as largely willing guinea pigs in a dystopian economic experiment: negative interest rates in a cashless society. As Credit Suisse reports, no matter where you go or what you want to purchase, you will find a small ubiquitous sign saying “Vi hanterar ej kontanter” (“We don’t accept cash”):
Whether it’s for mulled wine at the Christmas market, a beer at the bar, even the smallest charge is settled digitally. Even the homeless vendors of the street newspapers Faktum and Situation Stockholm carry mobile card readers.
A similar situation is unfolding in Denmark, where nearly 40% of the paying demographic use MobilePay, a Danske Bank app that allows all payments to be completed via smartphone. With more and more retailers rejecting physical money, a cashless society is “no longer an illusion but a vision that can be fulfilled within a reasonable time frame,” says Michael Busk-Jepsen, executive director of the Danish Bankers Association.
World’s Biggest Cashless Laboratory
While Sweden and Denmark may be the two nations that are closest to banning cash outright, the most important testing ground for cashless economics is half a world away, in sub-Saharan Africa.
In many African countries, going cashless is not merely a matter of basic convenience (as it is in Scandinavia); it is a matter of basic survival. Less than 30% of the population have bank accounts, and even fewer have credit cards. But almost everyone has a mobile phone. Now, thanks to the massive surge in uptake of mobile communications as well as the huge numbers of unbanked citizens, Africa has become the perfect place for the world’s biggest social experiment with cashless living.
Western NGOs and GOs (Government Organizations) are working hand-in-hand with banks, telecom companies and local authorities to replace cash with mobile money alternatives. The organizations involved include Citi Group, Mastercard, VISA, Vodafone, USAID, and the Bill and Melinda Gates Foundation.
In Kenya the funds transferred by the biggest mobile money operator, M-Pesa (a division of Vodafone), account for more than 25% of the country’s GDP. In Africa’s most populous nation, Nigeria, the government launched a Mastercard-branded biometric national ID card, which also doubles up as a payment card. The “service” provides Mastercard with direct access to over 170 million potential customers, not to mention all their personal and biometric data.
The company also recently won a government contract to design the Huduma Card, which will be used for paying State services. For Mastercard these partnerships with government are essential for achieving its lofty vision of creating a “world beyond cash.”
A New Frontier
In India an even more ambitious project is under way: the Unique Identification Authority of India (UIDAI), which aims to create a centralized voter enrolment system for 1.2 billion people. It will be the largest identity platform and biometric database in the world. There’s only one snag: according to its creators, the only way to make the system work effectively will be through the widespread adoption of electronic payment systems, side by side, as always, with biometric recognition systems.
Given that cash is still king on the subcontinent, the government may have its work cut out. Finance minister Arun Jaitley has repeatedly underscored the need to transform India into a cashless economy, supposedly to “rein in the problem of black money.” However, with its huge informal economy, India remains the largest producer and consumer of currency notes after China (as well as the biggest consumer of gold).
Here’s more from India’s Financial Express:
Currently less than 5% of all payments are done electronically. Results from the ICE 360 Cash Survey 2014 show that cash is the preferred mode of payment even in Delhi, the most affluent and developed metropolis. Nearly 73% of all purchases by Delhi consumers are paid for in cash and only 17% by card.
Naturally the Indian government will do all it can to change this situation. In an article in the Daily Mail Nandan Nilekani, one of the technocrats behind UIDAI, urges the government to lead the way. “The government must be the initial driver, using the heft and reach of its social security schemes to drive the adoption of an electronic payments model,” Nilekani asserts. “As momentum grows, private players can step in.”
Those private players will no doubt include banks. After all, in a world where every transaction – or at least every “official” transaction – must be electronic, the power of banks over individuals is likely to dramatically increase, as Brett Scott warns in an article for The Guardian:
With this comes the specter of bank surveillance, where every transaction you ever partake in is authorized and recorded by a privately run commercial bank, giving it a transaction-by-transaction history of your entire commercial life. If such a bank does not like an enterprise – such as Wikileaks – it can just freeze it out.
The New Cost of Doing Business
An oft-overlooked benefit of cash transactions is that there is no intermediary. One party pays the other party in mutually accepted currency and not a single middleman gets to wet his beak.
In a cashless society there will be nothing stopping banks or other financial mediators from taking a small piece of every single transaction. They would also be able to use – and potentially abuse – the massive deposits of data they collect on their customers’ payment behavior. This information is of huge interest and value to retail marketing departments, other financial institutions, insurance companies, governments, secret services, and a host of other organizations.
Another very important perk of cash is that it significantly limits central banks’ ability to continue conducting arguably the greatest financial heist of the modern age, i.e., negative interest rate policy (NIRP). The only way that central banks can maintain negative interest rates ad infinitum is by abolishing cash altogether, as the Bank of England chief economist Andrew Hadlaine all but admitted. As long as cash exists, there’s no way of preventing depositors from doing the logical thing – i.e. taking their money out of the bank and parking it where the erosive effects of NIRP can’t reach it.
So in order to save a financial system that is morally beyond the pale and stopped serving the basic needs of the real economy a long time ago, governments and central banks must do away with the last remaining thing that gives people a small semblance of privacy, anonymity, and personal freedom in their increasingly controlled and surveyed lives.
The biggest tragedy of all is that the governments and banks’ strongest ally in their War on Cash is the general public itself. As long as people continue to abandon the use of cash, for the sake of a few minor gains in convenience, the war on cash is already won.
A war conducted by bankers, politicians, academics, even startup guys.
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From monetary and government authorities' standpoint a cashless society's primary value is the ease with which they can expropriate you.
Bankers and government bureacrats would like to collect fees, and taxes, respectively, more efficiently and effectively.
Economists would like the ability, when they believe you are not spending enough, to reverse that decision by making savings a losing position.
The thing is, it is an impossible task.
The closest they can come is to make OFFICIAL cash electronic-only.
But they can't stop you from simply doing as they say...and trading every last digit for tangible items of value...or even intangible ones that can themselves be traded.
The irony is that in their quest to drive the common man out of holding cash and into ever-more-wild spending...they might just succeed.
If they do...then of what utility are their digits?
E.U. has also started War on End-to-End encryption. U.K. fired the first shot and indirectly it may also affect the cryptocurrencies, such as BTC:
Our future is to be as Doug Casey calls us "MIlk Cows" except we will have chips in us that record everything we say, eat and drink...no privacy just work for the .gov. a new kind of slavery.
Jorgen wrote: "E.U. has also started War on End-to-End encryption. U.K. fired the first shot and indirectly it may also affect the cryptocurrencies, such as BTC "
this new "War on Encryption" is a British thing. Specifically, a Tory Party British thing. Read up on "Five Eyes", and you'll note that it has very little to do with the "E.U."
QUOTE: "The biggest tragedy of all is that the governments and banks’ strongest ally in their War on Cash is the general public itself." - END
Let's see if that outdated text with that "magic man in the sky character" had anything to tell us on the topic.
"But evil men and impostors will grow worse and worse, deceiving and being deceived."
"For our battle (struggle with the power of evil) is not against flesh and blood (any specific individual), but against the rulers, against the authorities, against the world powers of this darkness, against the spiritual forces of evil in the heavens."
"But know this (strongest definititve used): difficult times will come in the last days. For people will be lovers of self, lovers of money, boastful, proud, blasphemers, disobedient to parents, ungrateful, unholy, unloving, irreconcilable, slanderers, without self-control, brutal, without love for what is good, traitors, reckless, conceited, lovers of pleasure rather than lovers of "the magic man in the sky", holding to the form of [religion (profound faith in ones own ways)] but denying its power. Avoid these people!
For among them are those who worm their way into households and capture idle (lazy or careless) women burdened down with sins, led along by a variety of passions, always learning and never able to come to a knowledge of the truth."
"Righteousness exalts a nation, but sin is a disgrace to any people."
I just do not envision a drug dealer in Detroit in a burnt out old home with a mobile card reader in one hand and and drugs in the other...
He'll just have to move to Colorado then I guess...
YOU KNOW ...
if they keep up this war on Cash ...
People will start going to the Cartels.
Yeah - that's right. Dealers on street corners will be exchanging dollar bills, instead of coke and weed.
Don't laugh.
It's not as stupid as it sounds.
Information is key to Predators who can employ data mining technique. They need to know where debts are concentrated that can hurt them and move to other juices where they can reap with more debts from the preys. Preys holding the bags will be forced to kick down the debts to their next gen. The whole game played on the premise that global preys do not have the DNAs to congregate and leave the Matrix.
Just remember a box of ammo is divisible by 10... :)
I am sure there are 'dirty' agents in the CIA, NSA, Secret Service and more which will help launder money or distribute cash for a reasonable price.
I am working on a list with phone numbers and email addresses now. Any contributions would be appreciated.
Those of us who understand what's happening can see a huge upside (as well as downside) to the so-called elimination of "cash". Why so?
Well, the obvious huge upside is... a great many people who find cash convenient for various [very good and obvious] reasons will switch to carrying silver [and tiny gold] "coins" (rounds) instead. And also... a great many businesses will start to accept those silver and gold "coins" (rounds) in order to increase their revenues (not to mention safely pocket a portion for themselves, as most small cash businesses have always done to survive).
The obvious downside is... this will give the predators-that-be yet another excuse to attack precious metals (the prices of which will be rising as more people adopt them for "spending money").
Nonetheless, overall... I think this move towards a "cashless society" might be positive. Why? Because fundamentally it isn't really a move towards a "cashless society", it is a move towards a "non-fiat society".
PS: If they make gold illegal, people will spend silver. If they make silver illegal, people will spend platinum or palladium. If they make platinum or palladium illegal, people will spend nickel... or any of dozens of other metals. And if they make every metal illegal, people will spend some other real, physical good. At least hopefully so.
honestann, I have some difficulties in imagining that shops that accept only electronic payments are going to make precious metals more popular
it all goes back, imho, to the point that it's not Americans that are hoarding gold and silver, in the greater scheme of things. all those ideas of "well, perhaps if..." are rationalizations, imo
in this, the "war against cash" is on the same side of the "war against gold", not "gold positive" in any way
Americans are buying PMs .... and we have some of the most efficient suppliers .... my ex just picked up 10 Buffalo silver coins from Apmex .... $17.04 each .... and free shipping .... in Mexico .... a country with a rich PM tradition .... buying PMs is costlier .... and "risklier" .... you're much better off buying Mexican coins .... from efficient US dealers .... we always here about the Chinese and Indians .... they're not the only ones buying ?
Take a step back,
Because the question is not truly one of precious metals, but one of tangible trades vs intangible ones.
Electronic-only government based currency is attractive to governments and central bankers for the ease with which they can spend your money for you.
Ann's point is that wholesale compliance with those same governments and central bankers results in the government currencies becoming worthless as a store of value, and according to Gresham's Law, traded away for tangibles immediately.
All of this destroys demand for the digital variant of government currencies, which alternately means those currencies' values will go down vs real things, or alternatively, real things will rise vs government currencies.
Now, the funny thing about shops is that they will accept whatever gives them value for the trade.
So, at what point does this turn into an electronic barter system where I 'buy' things from Amazon or Ali Baba as soon as I get my paycheck in order to preserve purchasing power, and then go to various shops, and barter delivery of those items in return for whatever the shop provides that Amazon cannot.
At the same time... How do Amazon and Ali Baba get paid?
Due to their size and profile, at first they take government currency. But they won't survive if they do that forever. Moreover, why is it hard for them to accept bitcoin? Or if not bitcoin, then some other non-managed currency? Why could not Amazon itself accept items of value you may have, even precious metals, in return for purchasing power that can be spent there.
So, we have become confused about the purpose of money. The purpose of money is third-party trade OVER TIME. Monetary inflation, digital currency, and the other gimmicks of government and central bankers are designed to defeat the 'OVER TIME' part.
So, it becomes a question of classical economic time preference. The problem for governments and central banks is that to succeed they must have finite control over time preference. They want time preference to be very, very small, but not TOO SMALL. Too small a time preference, under their system, results in a hyperinflation. Too large a time preference, under their system, results in a deflationary spiral. At the same time the confluence of NIRP, monetary inflation, and the war on cash is causing the acceptable time-preference band to narrow. And, indeed, simply due to the accumulated interest that must progressively increase the burden of the monetary system on the real economy, it is the nature of this system for the band of acceptable time preference to eventually become INFINITELY thin.
They are attempting to do surgery with a chainsaw.
Time preference, due to mass psychological factors, can turn in an instant. Yet today, you will be punished for default...and rewarded for low time preference in a variety of ways. People may well rush out of currency into 'real' things, as Ann says, at any instant.
Here is another reason precious metals will become more popular, namely "aversion to debt financing". Sure, many people (suckers) will still borrow to start businesses, but not everyone.
In case anyone didn't notice this factoid, I'll say it clearly.
In a so-called "cashless society", the banksters and government will be actively stealing wealth by keeping interest rates paid on cashless savings lower than the true inflation rate.
Which means, if you try to save in order to start a business, your savings are being continually ripped-off by banksters and government.
All this pushes people to act even more in the interest of the predators-that-be (banksters, government, large-business) namely "give up" or "borrow to start a business".
When an individual decides not to start a small business because they recognize the system is totally rigged against them (or they simply can't accumulate wealth fast enough to reach the amount they need to start the business), the predators who run "large-businesses" win - because new competition is not created.
When an individual decides to borrow to start a small business because they recognize the system is totally rigged against saving to accumulate wealth, they may decide to borrow from the predators we call "banksters" to start the business.
In either case, the predators-that-be win.
The most important point people need to recognize is the following. Any individual who borrows to start a business is at a huge competitive disadvantage compared to other similar businesses that have no debt. The reason is obvious... those businesses who must make loan payments have a large expense that their no-loan competition doesn't have. And so, their prices will have to be higher (unless they have some other large advantage to compensate), and they will tend to lose. They will also tend to "go out of business" when times get tough, while their competition without loans will not (and will instead pick up all the customers lost by competition with loans who go out of businesses).
What's the point? The point is, to reliably start a successfully business requires an individual save to accumulate sufficient funds to start the business without loans (but with a reserve buffer of savings).
This requires the ability to save.
And if savings in a cashless world is made inefficient (which WILL be the case), then the only viable way to accumulate savings will be real, durable physical goods like gold, silver, platinum, palladium, rhodium, nickel... or something entirely different depending on what is currently cheap and what is not. But it will have to be something real, durable, physical... and relatively inexpensive at the time the savings are accumulated (in order to earn the equivalent of "interest on savings", or at least not lose value).
Everything the predators-that-be are doing is designed to make life difficult or impossible for producers and "regular folks". Therefore, the ONLY WAY to achieve reliable success going forward is to find ways to evade the measures the predators take. Which means "get the hell outta dodge" and move to a more favorable location (where you can more easily and reliably evade most of the measures established by the predators-that-be) and "accumulate savings in real, durable physical goods" to avoid being fleeced.
I'm not saying a large percentage of individuals will wake up and adopt measures to protect themselves. They won't. Hell, most people don't have savings (or have more debt than savings, which is effectively the same thing). But for sure the more alert folks with initiative WILL convert their fiat, fake, fraud, fiction, fantasy, fractional-reserve debt-bits into real, durable physical goods in order to save, and increase their ability to evade and escape most assaults by the predators-that-be.
a “world beyond cash" = a "world beyond privacy and freedom"
The government will be able to track your every transaction. From buying some chewing gum to buying a house and all in between. Imagine a world where you can never "drop off the grid", at least for any period of time. Oh, did you commit some minor offense? How about we just shut off your "money". Or, we can leave it on and track you down every time you make a transaction. Taxes, now there is a good one, the government will collect taxes from EVERYTHING. Want to pay the kid down the street to mow your lawn? You will be paying taxes on that transaction and the kid BETTER claim it on his taxes, because the government already knows he "made" that money.
Want to buy a shotgun or something from a private party? Not so private anymore. How about if you wanted to buy a bag of weed? Oh, and by the way, there is no more stuffing cash in a safe at home, where it is safe from the bankers and is untaxed. While we are on the subject of bankers, how about those negative interest rates? No way to avoid them now, not like you can take your cash out of the bank.
This is crazy and if we allow it to happen here in the USA we have surrendered ALL of our freedoms.
Way ahead of you. Closed my last bank account in '99 and my last credit card account in 2004.
A liberal dream come true .... forget Food Aid or Africa Aid .... every nigger in Africa will be stealth funded .... electronically .... the only people left out in the cold .... white people who worked hard all their lives .... and paid into Social Suck Sans Cola ?
when no cash accepted, black market will literally explode. Also first time I see one of those signs, I'm out of there. Do them just like I did wallyworld. See ya.
Backtrack to Republic of Viet Nam, sometime in '68 I think. The US military issued 'script' Military payment certificates to be used at PX and so. The MPCs were actually used universaly by the Vietnamese as well vs the Dong. (Gresham's law)
One fine morning all military personel were restricted to bases and given just that day to exchange the 'old' MPC for the 'new' MPC. I well remember the tears of fear, rage and frustration of the vendors outside the wire as their life savings or at least working capital became instantly worthless.
Probably coming to a town near you soon.
The kikes that wrote the bible has given us goy the roadmap as to how they will enslave us all.
And so it has been written