Visualizing The Global War On Cash

Tyler Durden's picture

There is a global push by lawmakers to eliminate the use of physical cash around the world. This movement is often referred to as “The War on Cash”, and there are three major players involved:

1. The Initiators

Who? Governments, central banks.

 

Why? The elimination of cash will make it easier to track all types of transactions – including those made by criminals.

 

2. The Enemy

Who? Criminals, terrorists

 

Why? Large denominations of bank notes make illegal transactions easier to perform, and increase anonymity.

 

3. The Crossfire

Who? Citizens

 

Why? The coercive elimination of physical cash will have potential repercussions on the economy and social liberties.

 

Courtesy of: The Money Project

 

Is Cash Still King?

Cash has always been king – but starting in the late 1990s, the convenience of new technologies have helped make non-cash transactions to become more viable:

  • Online banking
  • Smartphones
  • Payment technologies
  • Encryption

By 2015, there were 426 billion cashless transactions worldwide – a 50% increase from five years before.

And today, there are multiple ways to pay digitally, including:

  • Online banking (Visa, Mastercard, Interac)
  • Smartphones (Apple Pay)
  • Intermediaries ( Paypal , Square)
  • Cryptocurrencies (Bitcoin)

The First Shots Fired

The success of these new technologies have prompted lawmakers to posit that all transactions should now be digital.

Here is their case for a cashless society:

Removing high denominations of bills from circulation makes it harder for terrorists, drug dealers, money launderers, and tax evaders.

  • $1 million in $100 bills weighs only one kilogram (2.2 lbs).
  • Criminals move $2 trillion per year around the world each year.
  • The U.S. $100 bill is the most popular note in the world, with 10 billion of them in circulation.

This also gives regulators more control over the economy.

  • More traceable money means higher tax revenues.
  • It means there is a third-party for all transactions.
  • Central banks can dictate interest rates that encourage (or discourage) spending to try to manage inflation. This includes ZIRP or NIRP policies.

Cashless transactions are faster and more efficient.

  • Banks would incur less costs by not having to handle cash.
  • It also makes compliance and reporting easier.
  • The “burden” of cash can be up to 1.5% of GDP, according to some experts.

But for this to be possible, they say that cash – especially large denomination bills – must be eliminated. After all, cash is still used for about 85% of all transactions worldwide.

A Declaration of War

Governments and central banks have moved swiftly in dozens of countries to start eliminating cash.

Some key examples of this? Australia, Singapore, Venezuela, the U.S., and the European Central Bank have all eliminated (or have proposed to eliminate) high denomination notes. Other countries like France, Sweden and Greece have targeted adding restrictions on the size of cash transactions, reducing the amount of ATMs in the countryside, or limiting the amount of cash that can be held outside of the banking system. Finally, some countries have taken things a full step further – South Korea aims to eliminate paper currency in its entirety by 2020.

But right now, the “War on Cash” can’t be mentioned without invoking images of day-long lineups in India. In November 2016, Indian Prime Minister Narendra Modi demonetized 500 and 1000 rupee notes, eliminating 86% of the country’s notes overnight. While Indians could theoretically exchange 500 and 1,000 rupee notes for higher denominations, it was only up to a limit of 4,000 rupees per person. Sums above that had to be routed through a bank account in a country where only 50% of Indians have such access.

The Hindu has reported that there have now been 112 reported deaths associated with the Indian demonetization. Some people have committed suicide, but most deaths come from elderly people waiting in bank queues for hours or days to exchange money.

Caught in the Crossfire

The shots fired by governments to fight its war on cash may have several unintended casualties:

1. Privacy

  • Cashless transactions would always include some intermediary or third-party.
  • Increased government access to personal transactions and records.
  • Certain types of transactions (gambling, etc.) could be barred or frozen by governments.
  • Decentralized cryptocurrency could be an alternative for such transactions

2. Savings

  • Savers could no longer have the individual freedom to store wealth “outside” of the system.
  • Eliminating cash makes negative interest rates (NIRP) a feasible option for policymakers.
  • A cashless society also means all savers would be “on the hook” for bank bail-in scenarios.
  • Savers would have limited abilities to react to extreme monetary events like deflation or inflation.

3. Human Rights

  • Rapid demonetization has violated people’s rights to life and food.
  • In India, removing the 500 and 1,000 rupee notes has caused multiple human tragedies, including patients being denied treatment and people not being able to afford food.
  • Demonetization also hurts people and small businesses that make their livelihoods in the informal sectors of the economy.

4. Cybersecurity

  • With all wealth stored digitally, the potential risk and impact of cybercrime increases.
  • Hacking or identity theft could destroy people’s entire life savings.
  • The cost of online data breaches is already expected to reach $2.1 trillion by 2019, according to Juniper Research.

As the War on Cash accelerates, many shots will be fired. The question is: who will take the majority of the damage?

*  *  *

The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

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Rich Stoehner's picture

I wish I had some cash

Muddy1's picture

If you like your cash you can keep your cash.

JohninMK's picture

Someone forgot Russia in the Infographic. By shear co-incidence this appeared today. My highlight

MOSCOW (Sputnik) The Russian Finance Ministry is proposing to revive the idea of limiting cash transactions in Russia in a bid to reduce shadow economy, Finance Minister Anton Siluanov said on Saturday.

“Maybe we should think about limiting cash transactions. Many countries are following this path … That is very right as it is an element of reducing shadow economy. This instrument may give an opportunity to raise more taxes and make our economy more transparent,” Siluanov said at the congress of the United Russia party.

The implementation of the new rules should be done gradually, to avoid any inconveniences, especially in those Russian municipalities and regions that do not have the infrastructure for cashless operations, the minister added.

The Russian Central Bank and the Ministry of Finance started to discuss the prospects of limiting cash transactions in 2012. The bill on cash limits was introduced to the Russian Parliament, but it was not adopted due to the economic downturn in Russia.

The Russian economy suffered a recession in 2014, as the ruble lost around 50 percent of its value against the US dollar amid low oil prices and Western economic sanctions imposed on the country.

https://sputniknews.com/russia/201701211049854165-russia-cash-transactions/

 

stacking12321's picture

Criminals and terrorists are not the target in the war on cash, that's a red herring.

 

The cross sights are squarely fixed on the public, specifically the remining wealth that needs to be stripped from the middle class.

BennyBoy's picture

 

But how will politicians make illegal money?

Oh right, legalize it.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) xythras Jan 22, 2017 5:45 PM

The shrill shrieking comnig from the Overly Emotional Ones must have been ear-splitting as this happened.

Mustafa Kemal's picture

"Criminals and terrorists are not the target in the war on cash, that's a red herring"

No, that would be like waging war on themselves. This has us as the target.

HRH Feant's picture
HRH Feant (not verified) JohninMK Jan 21, 2017 9:05 PM

Great catch!

+1000

bshirley1968's picture

Was it?

Less than 25% of Russians have bank accounts.   They are a long way from limiting their cash market.  If you have a pension in Russia,  a guy comes to your door and pays you with an envelope of cash.

They are in a whole different world.

kochevnik's picture

If authorities are too draconian many Russians will revert to barter, as happened under Yeltsin and 1999 economic crisis

jfb's picture

Thank you. Russia is not as worst than the West on some issues, but it is good that someone bring this issue; they are not the paradisiac countr that some people want to believe

Yog Soggoth's picture

And as another ZH'er pointed out earlier today, it would stop bank runs that could crash the existing system. I can see someone with millions in digital dollars getting framed by the system and powerless to get a retainer for his lawyer. Message to the banks. It is my money, not yours.

datura's picture

if you know something about Russian politics, you should know that Siluanov is a Russian "liberal", who are inclined to make stupid public statements, only having to retract them later after having a little private talk with Putin. It just makes them seem stupid in the eyes of the public, so I dont know why they keep doing that. But hey, they are liberals, they cannot help themselves. Rest assured that no such thing as limiting cash will happen in Russia, as long as Putin is president (and probably as long as he is alive, because it is widely expected that when he steps down (likely in 2024) he will appoint his successor and keep supporting him from the shadows). One example is the issue of increasing the age for retirement. Liberals have been whining publicly that this needs to be done for many years, but they have always been met with Putin's resounding "NO!" This cash limiting nonsense is the same thing. They will keep whining that this SHOULD be done, but it will always end with Putin's NYET. 

     The recent statement of the finance ministry (after having a talk with Putin): "The (Russian) government is NOT discussing the issue of restriction of cash payments and will not impose any restrictions. Banks are currently investing huge funds into modern technologies. We believe administrative limiting of payments is senseless." 

See? They just needed a little talk with Putin and now cash restrictions are "senseless".

More:
Ghost of Porky's picture

If only I had some kind of mark on my hand or forehead that allowed me to buy stuff.

SILVERGEDDON's picture

Fight back. 

Trade, barter, silver, gold, copper , lead, brass.

Fuck them, and their digital or fiat paper clown bux.

Fucking IBS FED Klingon cocksuckers from Uranus.  

The Navigator's picture

Cashless means

1. the governments themselves control your money - how much you can spend, OR how much they take.

2. computer glitches AND it's GONE

3. EMP or Coronal Mass Ejection, AND it's GONE

With most of the worlds government so fucking broke, having only Ecash is like blood in the water for those sharks - you're just asking for an attack.

Besides, How's the CIA gonna do their drug biz?

Bubba Rum Das's picture

"Besides, How's the CIA gonna do their drug biz?"

Exactly...How do you carry on in the drug business w/ out cash being available to your low level customer base which supports the whole monster? Impossible.

-And then, w/ no drug trade, that = NO DRUG WAR; which is not only the cover that government agency's use for bringing in 'their stuff'; but also an effective means of siphoning off tax money to the Fed into slush funds and enrichment fot that section of Federal beaurocracy...

By banning the $100 & $50 bill, that will effectively destroy the importation & sale of illegal drugs in the US.

With Federal corruption at current levels & so many politicians & elitists involved in the illegal drug trade; I truly believe those pushing this 'cashless society' ideal will die of suicide, mysterious accidents, poisoning, etc. or be taken out due to framed up charges or indictments based on their own corruption obtained w/ info. sourced through the NSA/ CIA intelligence systems now in place...

The only thing even remotely possible for this kind of cashless society action in this country would seem to be in the face of a scenario of an almost TOTAL economic collapse in this country...

You never know...

Yog Soggoth's picture

A couple of items at the grocery store costs 50$ where I live. The people that proposed that stupid idea should be investigated as possible terrorists.

tmosley's picture

I wish I had a large collection of central banker skulls.

Byte Me's picture

I'd pay cash to see that.

oneno's picture

Yes, those who think encryption makes crypto currencies safe need to read these two books:

one

two

stacking12321's picture

bad comment.

don't ask me to read two whole books to understand what your point is.

if you have a specific point you are making, you should be able to state it yourself in plain english.

dark fiber's picture

Who will take the damage?  The reserve status of the Dollar.  That's who will take the damage.  If you cannot exchange currency from Africa to China over the counter, in the bank, on the black market and wherever else you can imagine, it is not a reserve currency.  End of story.

Macavity's picture

Reckon that's a big part of the plan--USD as reserve currency. Either TPTB see some catastrophic USD risk and are hence trying to digitise all USD including foreign reserves. Or it's going to be a game of currency crash dominoes whereafter the US steps in to supply a global currency (officially). But only if fallen nations digitise and give up total control.

Yen Cross's picture

  Please--- I'm so tired of the "war on cash" drivel.

 Doesn't anyone watch those cheezy used car saleman reality shows on the Discovery and History channels?

Ben A Drill's picture

I wish we would do away with pennies.

jfb's picture

Don't miss this delicious "demonstration" regarding money, I roflmao: 

https://www.accredited-times.com/2017/01/21/understanding-beliefs-progre...

EuroPox's picture

Yeah well criminals use buses, trains and planes, so let's ban them too - we can all ride bikes and horses instead.  Ahh shit, we need to bans roads as well, criminals use them all the time.  While we are at it, let's ban phones and computers, criminals use them a lot!!  Hey this is easy, there are so many things we can ban to make life harder for criminals.

I don't think TPTB have really thought this one through, they need a better excuse.

dearth vader's picture

how to bribe a politician in a cashless society?

There must be a way, or they will never vote for it.

soyungato's picture

The problem of bribing a politician was solved several hundreds years ago in China. Lets say you want to bribe a politician to get a job or a contract. You go to an art shop selling printings. The shop owner will tell you the price for a given contract i.e. price of a printing. You buy the printting and give it to the politician on his birthday or his sons graduation etc etc. The politicain then sell the printing back to the shop later. Problem solved.

soyungato's picture

Money is power. In a cashless society, you have no control of that power. A nameless bereaucrat can make your life miserable by limiting your access to YOUR money with a few key strokes. Keep your dislike of Clinton to yourself or your debit card suddenly is not accepted anywhere. 

Want to know what it is like to be a SLAVE and live in fear ?  Try cashless . 

blargg's picture

It's kind of like the way that most people commit felonies every day without realizing it. This gives them leverage on everyone. Digital cash means that most people can be shown the "advantages" of complying rather than "choosing" to have all their digital cash wiped out with the stroke of a key.

soyungato's picture

Unfortunately, this is already the norm , people are just not paying attention yet. Deutsch Bank was fined by the US government recently $ 7.2 billions Dec 22 last year for the toxic mortgage loans. The original fine was about $14 billions which would have wiped out the bank. Deutsch Bank negotiated (with hat in hand) it down and survived.

Has any one ever wonder just how the US government can impose a fine on a bank in Germany. Why, Deutsch Bank conduct all of its business digitally and there are many layers of intermediate steps the US can throw a monkey wrench in to suffocate the bank, putting it out of business. That is why Deutsch Bank has to beg to reduce the fine. Thus, the US can control a foreign back AND ITS GOVERNMENT ! 

Retails like us are next and we dont have any recourses unless, like the election of our president , the people collectively say NO to evil.

 

Yog Soggoth's picture

My only regret is that Duetch didn't go down. This entire transition of banking and politics would be faster and easier to understand for the layperson. Tougher banking sentences and accountability is a good thing.

Hammer of Light's picture

We need a specific list of all the people who are trying to do this.... then maybe some really bad things will start to happen... to them.

mary mary's picture

The problem is that they meet on the golf course, in the church annex, in the country club, on the tennis court, and on somebody's yacht or private jet, and then they use "up and coming" members of their various Clubs and Associations to write the regulations and lobby the staffs of the Congressmen they just played golf with.  Then, if everything goes right, that lobbying gets the bill attached as an amendment to the 2017 Protecting The Citizens From The Scary Russian Grandmothers Bill, and, before you know it, it's law.  "Don't know how that happened.  But I'm working hard for my consituents, so please vote me back in, and contribute to my political slush fund."

Nevertheless, there are always voting records, unless it's a "voice vote".

mary mary's picture

You know who else drinks water?  Terrorists!

You know who else reads?  Terrorists!

You know who else speaks to their neighbors face-to-face where the government can't record them?  Terrorists!

You know who else exercises their First, Second, and Fourth Amendments?  Terrorists!

You know who else complains about the handful of billionaires who get free money daily from the FED, or EU, or IMF?  Terrorists!

You know who else does not have Confirmations or Bar Mitzvahs?  Terrorists!

Latitude25's picture

I went into Bank of America to deposit $600 cash in a friend's account.  Photo ID required and they entered all my personal info into their computer system.  The war on cash is preceeding as planned.

wisetrader224's picture
wisetrader224 (not verified) Latitude25 Jan 21, 2017 9:06 PM

Yea that is kind of crazy.

Yog Soggoth's picture

Worst bank in America. Second is Wells. BOA were the first in my region to start charging 7 dollars per transaction without a bank account. If some guy earned 50$ washing windows on a mansion they still charged 7.00$. I recently had a problem with a small check that would not clear because my signature in cursive did not match their records. I basically make stuff up and scribble anything to sign off on anything, but that is my right as an American. That is what ID is for!

HRH Feant's picture
HRH Feant (not verified) Jan 21, 2017 9:07 PM

Communists and central bankers have one common goal: control.

Keep stacking bitchez!

blargg's picture

LOL, citizens caught in the crossfire. It's their cash that is the target. If they get their way it'll be a crime to use physical cash.

wisetrader224's picture
wisetrader224 (not verified) blargg Jan 21, 2017 9:24 PM

I hope you are wrong but it sure does look that way. 

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) wisetrader224 Jan 22, 2017 5:47 PM

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