Why The 'Cashless Society' Has Become The New Wet Dream Of Governments And Central Bankers

Secular Investor's picture

Negative Interest Rate 4

Source: munplanet.com

We have heard a lot of chatter about a potential negative interest rate policy, and whilst the general market consensus in the USA is still expecting to see at least two rate hikes by the Federal Reserve before the end of this year, the situation is completely different in Japan and in Europe. The Japanese central bank was the first central bank to openly discuss a potential negative interest rate in an attempt to boost the country’s economy again, but the grand scheme of things seems to be going much further than that.

About six months ago, some European economists started to make a case for a cashless society, referring to some Scandinavian countries where the majority of the payments was conducted through non-cash means. Thus, they argued, there was no need to keep on working with cash, as a cashless society seemed to be working just fine. Technically and theoretically, they are right. It is much easier to just swipe a card or just tap with a cell phone to make a payment, but the real issue at hand is that you’d have to have full confidence in the financial system.

And that’s exactly  where the first issues occur. The financial system in Europe isn’t as safe as one would expect it. After all, we’ve had the Greek banking crisis, a Spanish banking crisis, a Portuguese banking crisis, an Irish banking crisis, … in just the past 8 years, so why would any sane European citizen trust the banks when the entire system was on the verge of a breakdown in the past few years.

Negative Interest Rate 1

Source: voxeu.org

However, as the negative interest rate policy is becoming a serious option, a cashless society might happen faster and earlier than expected as the NIRP might collapse the banking system. In a recent enquiry, the Dutch banking group ING asked 13,000 of its clients (so that’s quite a representative group) what they would do if the interest rate on the savings and chequing accounts would turn negative. This poll was conducted in Belgium and the Netherlands, which have the highest saving rates of Europe (the Belgian banking system for instance has approximately $300B in cash on savings accounts which is quite a substantial amount for a country with a GDP that is less than 50% higher than that).

Negative Interest Rate 2

Source: ibidem

The results of the poll were quite interesting, as approximately 80% of the respondents said they would withdraw cash from the bank and either put it under the mattress (literally) or in vaults. Should this happen, the entire financial system would collapse.

Negative Interest Rate 3

Source: ibidem

Even assuming just 15% of the total amount of cash on the accounts would be withdrawn, this would result in a total cash outflow of $45B, and it’s unlikely the banking system would be able to handle this without having to deal with severe consequences. And we don’t even dare to imagine what would happen if 25% would be withdrawn. Or 40%. The snowball-effect would be huge and devastating, resulting in a deteriorating capital position of almost any bank in the Eurozone as they are all intertwined anyway.

What does this have to do with the recent ‘test balloons’ to bring up the subject of a cashless society? From the (central) banks’ perspective it would be very smart to first push forward to realize a cashless society to close that escape route for the Europeans. If you can’t withdraw any cash, then everybody will be trapped in the system of a negative interest rate and there will be no way to escape it.

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Dre4dwolf's picture

A cashless society is doomed to failure for a few simple reasons:

1) The people in charge are weak, without the power to counterfeit they are not fit to survive in this world, they lack real world skills, and have bred outside of " real humans " for too many generations, the ability to " work " for a living has quite literally been bread out of the elite.... 

 

2) They are smart enough to know this, but dumb enough to take the risk.

 

3) They are inherantly weak, they can not create a cashless society and resist the urge to counterfeit and steal, thus such a system is doomed to failure as the masses will lose faith in any cashless currency they are forced to use and rush towards real assets.

4) As fewer and fewer people use the cashless credit system, the system will faulter, the credits will be worthless, and the elite will be forced into a situation where they have to fend for themselves, this would essentially bread the elite into extinction..., government would fall apart.... anarchy would reign and those who feel wronged by the " system " will declare open season on the perpetrators.

 

If the elite want to die in order to usher in a cashless society, far beit from me to stand in their way, by all means, do away with cash, its your funeral not mine.

 

koan's picture

Why does all this smell of having been planned for a long, long time, and very well orchestrated?

Have I finally gone "Full Rense"?

Or is there something to the suspicion we have all been played for decades....

PoasterToaster's picture

They keep teasing us but they will never do it.  It's just a starting bargaining position, as a trial balloon.  Once the expectation is created in the public, then they do as they please.  These people follow a school of "economics" that regards economics as a psy op policy of central authority.

They want incremental reduction in people's ability to escape their clutches over time, in order to make the numbers work month to month.  They will continue to slowly squeeze the life out of the slave class as long as they are in power.  There will always be a $1 bill somewhere, so who can complain?

Stu Elsample's picture

Today's hottest investment for American citizens.....AMMO!!! LOTS of it.

It will be tomorrow's black market currency...and with the right dispenser, it will buy anything.

RaceToTheBottom's picture

Cashless society is more WELFARE for Banksters and their overpriced utilities.

InanimateCarbonRod's picture

Next thing, they'll start chipping newborns.

conraddobler's picture

Barter for food, buy nothing, quit your job.

Starve the system.

Never buy from those who buy into the system, refuse to trade with them.

Leave them with only the dependent class and the system implodes.

hendrik1730's picture

That will take 3 months. At most. State income drops to virtually zero, banks run dry, retailers crash, city dwellers starve. "The sheeple" have far more power than they think - especially those who still work and produce something useful or haven no debt, a house and enough savings to see them through 1 year.

DearOzIneedbrains's picture

Funny how fast the story was buried about the only transactions happening in Greece after the banks closed were only in hard cash.  I read a few misinformaiton pieces about how people were lining up to get debit cards because they couldn;'t get cash out of the banks!

munch's picture

I think so.  if there is a panic and they close the US banks for a period, there will be no transactions except for cash. If you don;t hold any cash, you will be begging from your relatives to eat or fill up the gas tank.

Strelnikov's picture

I oppose this for all the right reasons, but also for one very personal. 

My late father was a very successful used car dealer, and once in the mid sixties he showed me a $1000 bill he had in his pocket. It seem like something magical. He had to be able to buy and sell on the fly. His entire business would have been impossible without cash, and a lot of it. If this sort of thing comes to pass people like him, highly intelligent but uneducated and only semi-literate, will have no hope. My two brothers and I (first in our family to get beyond HS) all have advanced degrees and successful careers - made possible by cash.

Abbie Normal's picture

The first $1000 bill I ever possessed was stuck to my fridge...for all of a week until I realized it could be put to better use elsewhere.

Hitlery_4_Dictator's picture

It;s not a new idea. Such morons write these articles. 

roadhazard's picture

The bottom line in the US is that the Rich horde lots of cash and will not let this happen.

DosZap's picture

IN order to go cashless they must get it through Congress.

And that will be a LOT harder than any of these other EU idots,simply because they will face the American electorate, or a rope.

DontGive's picture

Every other terrible idea was passed by con-gress critters. What makes you think they wont in this case? They are bought and paid for tools and crooks.

mototard's picture

What will your life look like in a cashless socieity during a time of war?  Not good at all if they payments and settlements servers are attacked.  Here is a view:

 

http://mackenzieinstitute.com/facing-the-next-war-financial-systems/

Goldbugger's picture

Fuck the Banks and what they have done to us.

NoBillsOfCredit's picture

"we" let them do it. Went to the slaughter without a whimper.

DosZap's picture

Our banks local ones are not the prolem, they just are the loacle we go to.

It's the Fed, and the CB's, and we cannot get to them.(yet)

Abbie Normal's picture

Where we used to live, the local bank never issued any debit or ATM cards.  They would always point to their 24-hr driveby teller window instead.  That's all good and fine except most places outside of town didn't take personal checks.

NoBillsOfCredit's picture

I disagree, the local bankers should have been informing the public as to what the hell was going on. That they were being frauded. Those local bankers know the money is created from thin air and they did nothing to warn their friends and family and community.

DearOzIneedbrains's picture

Seriously? Informing people of what exactly, not borrowing money or buying a car or a house?  The banks exist because people used them.  

James .T .Bond's picture

Dont know why but cashless society makes me think of Apo. St John chap 13,19.

NoBillsOfCredit's picture

if it just happened in Europe it would meet the prophecy.

moonmac's picture

Another sign of the War on Cash. Menard's stopped giving any cash back on credit and debit card transactions. The Money Gestapo believes it will prevent contractors from paying workers under the table.

Abbie Normal's picture

Or maybe it's because the merchant agreement doesn't cover the cash back on fraudulent transactions that are below the floor limit.

Say the floor limit is $100, so any purchase under that amount will be approved even without an authorization.  But if a card thief buys $80 of goods and then asks for $20 cash back, only the $80 is covered, not the $20.

Sandmann's picture

So far the UK has imposed Contactless Debit Cards which anyone can swipe and debit £30 from your bank account.......and it doesn't need to be you.......they can do this five times before the card is asked to verify with a PIN.

So you don't even need to spend your own money now - the bank will let anyone spend your money for you. Your bank account leaks

One of these is not like the others..'s picture

There is a you tube article that shows you how to find and break the contactless part. (Or at least shield it from accidental use with tinfoil, or a metal holder)

If your card cannot work that way then you cannot have spent that money that way, it's simple, really.

LA_Goldbug's picture

"Technically and theoretically, they are right. It is much easier to just swipe a card or just tap with a cell phone to make a payment, but the real issue at hand is that you’d have to have full confidence in the financial system."

And someone is ready to believe that it is possible to get past this "hurdle" ???? Want to buy 10 acres on Mars ? Only $10.

" In a recent enquiry, the Dutch banking group ING asked 13,000 of its clients (so that’s quite a representative group) what they would do if the interest rate on the savings and chequing accounts would turn negative."

They needed to do a poll ??????????????????? I frankly do not see any reason to keep your money in a bank that charges negative rates. Let the bank borrow me money WITH a negative rate. Hey, I like that incentive to spend.

The Japanese understand such things

http://fortune.com/2016/02/23/japans-negative-interest-rate-driving-up-s...

MatrixLinx's picture

How will the all the drug money be moved about?

SixIsNinE's picture

paypal - mobile phones, digital tatto, rfid injectables

 

LA_Goldbug's picture

Then an EM Attack and puff it is all gone except for the gold horded by the Attacker.

Bastiat's picture

Just shut up and do what you're told and there won't be problem.

lakecity55's picture

No, there won't be!

People will do what they did in Andrew Jackson's time when hard money was scarce on the frontier. They will use PMs, other currencies, barter. It will take adjusting to, but having hard money is almost a natural right. Nobody gave bankers or government the right to drop 'cash.'

Ever since these stories began to appear, I have been holding more cash and quit paying with cards. Put your funds on a mobile phone? Don't get me started!

 

NoBillsOfCredit's picture

if you have to switch to barter then even the Federal Reserve Note cash will have no value.

Why Bother's picture

I'm not so concerned about "cashless" as I've seen this for years while others were piling up debt and voting for the same old rulers. People laughed as I stacked metals and they laugh while I add to crypto currency.

 

Anyone else here know what a cold storage crypto currency wallet is? These can be generated on an air gapped computer.

 

And sure I think smart people out there have been hiding fiat paper under their mattresses for a few years.

Got popcorn?

TulsaTime's picture

Talk about denial, that is way out there. No black markets either I'm sure, nudge wink snort. It will all be a neat seamless package as long as they keep their eyes shut.

taggaroonie's picture

What are they going to do about certain pesky elements on the periodic table?

Perhaps they'll be "disappeared" like the medieval warming period.

lordbyroniv's picture

2 words

 

Comic Books

shovelhead's picture

Beanie Babies

Pogs

Pokemon cards

Baseball cards.

Pet rocks

Hula Hoops

Do I need to go on?

Caleb Abell's picture

Well, if we have to buy stuff or get punished by NIRP, then try to only buy goods that are imported from Russia or China.

Echoless's picture

i see the many effects of cashlessness, but the concept that cashelessness will cause us to spend our money so the banks dont charge us for holding it in the bank still doesnt make sense to me. they want to remove cash so we cant just suddenly pull all our cash out of the bank and hold onto it. ok so what if i cant pull my cash out into physical cash i'll just buy gold or silver or any kind of investment that wont devalue before i want to liquidate the assets.. people will always find something like that to buy with their money. that concept seems so small that its not even worth anyone mentioning yet it's mentioned all the time?

Grandad Grumps's picture

Exactly what I said about Bitcoin, the wetdream of the the banks.

medium giraffe's picture

Can't shake the feeling that Bitcoin was a dry run for this shit.

espirit's picture

Looks like I'm going to diversify into 0.10, 0.25, & 0.50 ounces.

joego1's picture

Dear Jamie, Think about this next time you are talking about nail guns with your banker buddies-

While you are dreaming about a cashless society we are planning a banker-less society.

espirit's picture

WooHoo +1

I like that!