12 ms·

The War on Cash

113 points by known 11y ago

bertil 11y ago
As someone who had to carry large amounts of cash regularly, I feel like the author is neglecting many of the costs of cash. Personal security is one of them, and certainly one that local government care a lot more about than controlling drug traffic. As someone who lived in Northern Sweden, freezing your fingers off is another — albeit negligible. More seriously, I doubt that rampant inflation was the tool Argentinian government used to force a technologically unimaginable solution on its citizen.
- bertil 11y ago
  Fake money is probably the bigger issue overall though.
snarfy 11y ago
"This note is legal tender for all debts, public and private" Once services have been rendered, it's illegal for someone to not accept cash as payment.
- akgoel 11y ago
  Unless, of course, physical cash no longer exists, and all you have is some sort of ephemeral digital cash in a financial institution that can be easily subject to a negative interest rate policy. A bank balance can lose nominal value with NIRP, but cash in-hand can't. Hence, the War on Cash.
  - Swizec 11y ago
    Physical cash CAN lose value. Very fast too. My parents lived through the hyperinflation in Yugoslavia in the 90's. The stories they tell are ... fun. Ideally you exchanged everything into deutsche marks as soon as you got it. New denominations were being printed every few weeks because the currency was losing value etc. Hell, even when we became Slovenia I remember that at first, the highest bill was 1,000. Just ten years later, the highest had to be 10,000 because the thousand one just wasn't cutting it anymore. It was too impractical for the prices. For a more drastic example: in pre-war Germany it was more common to get mugged for bread than for cash. Wads of cash just weren't worth enough to bother.
    - CompelTechnic 11y ago
      Nominal value was the important term in the parent, i.e. a 100 dollar bill can't become a 99 dollar bill.
      - bbgtpm 11y ago
        Sure it can, banks would just have to modify the exchange rate between physical cash and bank deposits.
      - atom-morgan 11y ago
        The number on the paper != purchasing power
        deleted 11y ago
        [deleted]
      - Swizec 11y ago
        Sure, but nominal value is not what you use to buy things. The nominal value in my bank account won't just go down on its own either. But what I can do with it will. Or is there a mechanism I don't know about that can lower nominal numbers in untouched bank accounts?
        dragonwriter 11y ago
        > The nominal value in my bank account won't just go down on its own either. It would with negative interest rates.
        gegtik 11y ago
        presumably to reduce the inflation of prices. 6 of one, right?
  - atom-morgan 11y ago
    Meanwhile in my bag I have a crisp $100 trillion Zimbabwe dollar bill I use as a bookmark.
  - dragonwriter 11y ago
    > A bank balance can lose nominal value with NIRP, but cash in-hand can't. If by "nominal value" you mean "printed face value", then perhaps not (though there are plenty of time or environment-sensitive printing technologies that would allow that to change, even if there might be all kinds of good arguments against using them on currency.) If, instead, by "nominal value" you mean "official exchange/redemption value in the units of account in which the cash is denominated", sure it can; in fact, cash that does that has been suggested and, IIRC, used in some cases -- this is done by making the nominal value (that is, the official value in current units of account) equal to the face value at the time of issue, but decreasing over time based on the duration between the issue date on the cash and the current date, so that cash held longer is worth less, even in nominal terms, as a tool to increase the velocity of money.
- abfan1127 11y ago
  The average American commits 3 felonies a day. Just add it to the list. http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/1594035229 http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/...
- kedean 11y ago
  This assumes the service has already been rendered. If I own a store and you want to buy a candy bar from me, I can end the transaction when you attempt to pay me with a $100 bill. Since I haven't actually given you ownership of the candybar, there is no debt in place, yet. A restaurant doesn't have the same freedom, since they generally accept payment after the service is completed and you already owe them the debt for the meal.
  - gambiting 11y ago
    The tricky question is - how does this work at petrol stations? You already have the fuel in your tank when you go to pay. Surely the service has been rendered at that point?
    - thesimon 11y ago
      They usually have signs at the pump saying "No $100" notes. Edit: At least in Europe you usually pump before paying by card/cash in the store. I guess it differs from the US because of the high crime rate there.
      - khedoros 11y ago
        I don't pay cash often, but when I have, I've pre-paid inside the store, and the pump automatically stops when I've gotten the correct amount of gas. It may be regional. This shows people posting a mix of pre- and post-pay anecdotes: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=105x6640808 http://www.democraticunderground.com/discuss/duboard.php?az=...
    - AnimalMuppet 11y ago
      You pay in advance if you want to pay cash. Or, you give the pump your credit/debit card (which is also paying in advance).
      - kedean 11y ago
        In fairness, it hasn't always been like that everywhere. In my hometown, the move to 'prepay when using cash' only happened about 10 years ago. I distinctly remember working at a gas station in high school and dealing with older customer who refused to believe that they couldn't just pump then pay.
- utrex 11y ago
  Where do you see this? I see authoritative statements saying otherwise. "Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise" https://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx https://www.treasury.gov/resource-center/faqs/Currency/Pages...
  - qntty 11y ago
    You can't compel someone to pay you something other than cash. For people who insist on paying in cash, a business can just refuse to serve them.
  - stronglikedan 11y ago
    > For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy. These are all examples where payment is being offered before service is rendered. OP is referring to instances where payment is being collected for services already rendered (i.e. debts).
    - utrex 11y ago
      OP is referring to some source of authority but not actually naming it. If OP is referring to the message on the Treasury notes, OP's interpretation is reasonable but OP should read more texts.
      - stronglikedan 11y ago
        OP qualified it with "Once services have been rendered", so OP's interpretation is exactly correct in that context.
- dragonwriter 11y ago
  > Once services have been rendered, it's illegal for someone to not accept cash as payment. That's actually incorrect. "Legal tender" has a much more subtle effect; what it means is that an attempt to pay in cash meeting the other legal requirements for a tender of payment has an effect on whether and how much damages may be collected if the creditor later sues the debtor for the debt. That doesn't mean that it is illegal not to accept cash, it does mean that not accepting cash for a debt already incurred may, under certain circumstances, negatively impact the availability of legal recourse to collect the debt.
- themartorana 11y ago
  Tell that to every government agency.
deleted 11y ago
[deleted]
jcfrei 11y ago
I really hope that these types of blogs don't become mainstream on HN.
- utrex 11y ago
  It's not just the alarmist tone or the jittery pacing that makes this listicle unworthy of broad attention, it's the rhetorical errors as well. The author attributes this change to a war on cash rather than a global trend in response to common pressures and doesn't provide any strong evidence that governments themselves are driving these forces. The selected links contain plenty of anecdotes but few balanced studies or statistics about why these changes are happening. There's an interesting element of truth here: the world is moving to new systems of payment and cash use is declining, but the author is trying to frame this as dangerous without deriving a strong argument and is not clearly framing the status of cash. 1 stars for an interesting premise and a weak execution.
  - ihavedna 11y ago
    I think the upvotes are coming from an interest in this particular subject more than the source. I would like better material collected on the subject. Anyone have an alternative choice for research or discussion on this subject?
    - deleted 11y ago
      [deleted]
  - scott_s 11y ago
    I found the tone problematic, and the "About" page even more-so. The blog covers, among other things, "important issues from 9/11 Truth and false flag terror".
- philippnagel 11y ago
  I have up voted despite sharing your sentiment. I am simply interested in the discussion.
waterlesscloud 11y ago
My stepdad operates a network of privately owned ATMs. You wouldn't believe the hoops he's had to jump through with banks to keep them stocked up with his own money.
- joering2 11y ago
  +1 and seriously interested. Can you elaborate??
jakobegger 11y ago
At the risk of getting a few downvotes, I'm going to state that I'm all for outlawing cash payments for amounts larger than a few thousand dollar/euro. Corruption and tax evasion are a big problem in Austria (as presumably in most parts of the world), and cash payments make them so much easier. I just don't see a legal reason why I'd want to pay for a large purchase in cash. Almost all large purchases require some kind of paper trail anyway, so it's not like giving up cash means giving up your anonymity. Am I missing something obvious?
- wslh 11y ago
  Even if I would agree with you, there is an issue with POS where Visa/Mastercard/AMEX control the space, so the government is favoring an oligopoly in the middle of every transaction (with credit cards). Also, you are playing against privacy because some corrupt people use cash, sounds a similar argument than prohibiting cryptography.
  - chishaku 11y ago
    Encryption=terrorism, cash=terrorism. Larry Summers: "The fact that... in certain circles the 500 euro note is known as the “Bin Laden” confirms the arguments against it." https://www.washingtonpost.com/news/wonk/wp/2016/02/16/its-time-to-kill-the-100-bill/?postshare=8671455627637815&tid=ss_tw https://www.washingtonpost.com/news/wonk/wp/2016/02/16/its-t...
- Swizec 11y ago
  In Slovenia it is illegal to use cash for [business] transactions bigger than 100 or so euro. I moved out soon after that happened for unrelated reasons, but I haven't heard anyone non-shady complain. I haven't heard of any definitive results in driving down corruption and the grey market either though.
  - tempodox 11y ago
    The fact that people don't understand the risks they're exposed to doesn't make those risks go away. And once the data is exploited it'll be too late.
recursive 11y ago
How are people going to buy drugs in the cashless future? I can't see it working.
- thesimon 11y ago
  Bitcoins? Dummy companies?
- dragonwriter 11y ago
  > How are people going to buy drugs in the cashless future? Barter (including exchange of services as well as goods).
  - ericras 11y ago
    Tide detergent: http://nymag.com/news/features/tide-detergent-drugs-2013-1/ http://nymag.com/news/features/tide-detergent-drugs-2013-1/
- logfromblammo 11y ago
  If the US$100 and US$50 are eliminated, the black market will switch to gold as its reserve currency, and operate as a de facto currency exchange for customers using other forms of payment. Organized crime hawaladars will back a Bitcoin-like electronic transfer system, because actually moving around the physical gold too often is a pain in the ass, and exposes the shipments to additional risks.
- duncan_bayne 11y ago
  Want to buy my copy of Domain Driven Design? Only $175 to you, sir ;-)
kazinator 11y ago
As long as there are politicians, there will be cash. You can't (or don't want to) accept bribes, buy votes or hire hookers/strippers with traceable payment methods.
- _yosefk 11y ago
  I'd say the opposite. * The typical bribe is, you do something in your role as a government official, and later you legally get a high-paying job, or they pay you $100K-$200K/hour in speaking fees (the low number is Bush Jr's and the high number is Hillary's, AFAIK), etc. Works great with legal electronic payments. * "Buying votes" usually means, either you promise government money to a group of voters, or you promise a donor to do something when you get elected. Either way, you're buying votes with the government's money so no need for cash. If by buying votes you mean that you're Trump and you're paying for your campaign, again, nothing illegal there, I doubt he travels with stacks of cash. * "Hookers/strippers"... I dunno, whatever the problem with electronic payments there... I think a politician is in the best position to find a workaround, certainly in a better position than the average customer. In particular, if the workaround involves getting someone else to pay for it electronically, a politician is in a great position to reward that someone.
  - dalke 11y ago
    Plus, cash plays no role in bribes like a free upgrade to the Presidential Suite, or "air routes that please an important member of Congress". (Quote from http://www.bloomberg.com/news/articles/2015-02-25/did-united-put-a-whole-route-in-the-sky-for-one-very-important-passenger- http://www.bloomberg.com/news/articles/2015-02-25/did-united... ).
- Kiro 11y ago
  I presume you've never been to Europe. I don't remember the last time I saw real physical cash. It's very uncommon.
  - cornellwright 11y ago
    Are you serious? Every time I've been to Europe (I've lost count of how many times...) I've paid for many things with cash. I actually find it more inconvenient not to have cash there than in the US.
belorn 11y ago
I would not mind the problem as much if Banks worked like banks of old rather than opinionated service provides. Banks today limit how much cash is withdrawn and for what purpose, and any transaction is added to a permanent record. This record is then turned into precious customer data which can be used for any internal purposes, shared with partners (like insurance providers), and given to several government departments like tax collection, social security, the local police, secret police, national spy agency, foreign police and spy agencies, and so on. The customer has zero control and is barely recognized to be a stake holder at all. It is possible to create the cashless society without the above problems, but no governments or banks are interested.
- witty_username 11y ago
  Could you elaborate on how the "banks of old" were better?
  - themartorana 11y ago
    I was the customer, it was my money, they were required to have cash on hand, I made money when my money was loaned, there were no fees, like - NO FEES - and so on...
    - forgetsusername 11y ago
      >there were no fees, like - NO FEES There were also no services. I don't understand the bank hate around here. There are plenty of low/no fee banks. It's a competitive business, and if you're half-way assertive you can get favourable terms on nearly everything they offer. I just received a $100 gift card for sitting down and discussing the potential to be a customer at a major Canadian bank, and I don't do anything but the basics. They want your business.
      - tertius 11y ago
        > I don't understand the bank hate around here. They limit what you can do with your own money. The reason for getting deposits is so that they can loan 10x or 100x (or whatever your country allows) on the deposit and earn interest/fees. That doesn't benefit me, only them. The reason I use a bank is so that I can have "security" and "ease" in transfer/payment. They make a lot more off of me than the utility I describe above.
qq66 11y ago
The actors who the government has the most legitimate interest in surveilling (drug cartels, racketeers, corrupt officials, etc.) are the best-equipped to switch from paper currency to alternate currencies (precious metals, gems, etc).
- wheaties 11y ago
  Another angle would be how this could play out with civil forfeiture. Remember, this was originally only used on those people who were suspected of drugs, organized crime, etc but quickly spread to the general population. - Could they flag certain transactions? - There's also IRS requirements for banks to report many small transactions which are used to skirt the $10k reporting requirements. How would this work for small businesses that legitimately need to do this?
- flatline 11y ago
  They are also the best equipped to launder money through the banking system regardless of its origin: that is what they already do!
MikeNomad 11y ago
I'm not seeing an article about a war on cash. Rather, I'm seeing an article about the elimination of instruments that are not Global Reserve Currencies. The idea that the US would do away with FRNs has so many outcomes/levels associated with it, I can't get my head around it.
danbolt 11y ago
I found the bit of this article on the Canadian penny a bit irrelevant, and perhaps misleading. Or, I'm under the impression that it was discontinued due to the fact that one or two cents were a fraction of the average purchase, rather than some sort of initiative to discourage cash usage. I'm not very interested in using Bitcoin at the moment, but I like how its design could enable me to have some representation of electronic currency that could give some of the decentralized flexibility of cash. Perhaps a cashless society could employ structures such as those.
- soperj 11y ago
  Yeah, the Canadian penny was discontinued because it actually cost more than a penny to make. Also pennies are useless.
  - Afton 11y ago
    I don't think this is true. Coins are multi-use. Obviously the government wants to pay as little as possible in production costs, but there isn't any reason that the production cost has to be strictly less than the unit-cost of the money.
    - hluska 11y ago
      A relevant quote from the Royal Canadian Mint: In Economic Action Plan 2012, the Government announced it would phase out the penny from Canada's coinage system. The decision to phase out the penny was due to its excessive and rising cost of production relative to face value, the increased accumulation of pennies by Canadians in their households, environmental considerations, and the significant handling costs the penny imposes on retailers, financial institutions and the economy in general. (Source - http://www.mint.ca/store/mint/about-the-mint/phasing-out-the-penny-6900002#.VsTJNkXOfv4 http://www.mint.ca/store/mint/about-the-mint/phasing-out-the...)
      - Afton 11y ago
        Huh, they do say 'relative to face value'. I still think that reasoning is flawed, but I'm not going to argue with the RCM. Thanks for the link!
logfromblammo 11y ago
I heard just this morning over the radio that some bureaucrat was floating the idea of a moratorium on the printing of new US$100 and US$50 Fed notes. The bit explicitly mentioned that US$1M fits neatly inside one briefcase when using US$100 bills, but it would take three briefcases with US$20 bills. This may be true, but I'm a little wary of the argument now, as the drug trade, counterfeiting, and money laundering line was used when the US$1000 and CAN$1000 notes were retired, and they are worth less now than they were then. Loss of high denomination banknotes has not impeded the business of the underworld, but loss of cash transactions means that everyone in legit business now has to pay a tax to Visa and Mastercard for acting as an intermediary in payments processing. A pile of $100 bills is $100/g, or $45400/lb. $50 bills are $50/g, or $22700/lb. A $20 bill is about $20/g, or $9080/lb. Gold is $38.82/g, or $17607.88/lb. Clearly, if you eliminate the US$100, cash movers switch to the US$50. If you eliminate that, they switch to gold, not the US$20. US$1M in $100 bills is 22 pounds (10 kg) of cash. In US$50 bills, it is 44 pounds (20 kg). In gold, it is 57 pounds (26 kg). In US$20 bills, it is 110 pounds (50 kg). Someone in the monetary bureaucracy might want to reconsider the unintended consequences of the black market drug trade switching to gold as its preferred currency rather than paper money.
- Symbiote 11y ago
  Gold is going to be somewhat harder to spend. "The Serious Organised Crime Agency claimed that "90% of all €500 notes sold in the UK are in the hands of organised crime", revealed during an eight-month analysis." [1] €500 weighs 1.12g, but is worth $1.11, so US$1M in €500s is 2kg. A very decent saving. Of course, the UK doesn't use the Euro, so it would be interesting to see the same analysis done in several different Eurozone countries. [1] http://news.bbc.co.uk/2/hi/uk_news/8678886.stm http://news.bbc.co.uk/2/hi/uk_news/8678886.stm
vaadu 11y ago
Cyprus had bank account seizures and some eastern European nations seized private pension accounts. You can't seize what you don't control. No cash means no anonymity No cash allows banks to charge negative interest rates
- cesarb 11y ago
  Here in Brazil, we had the "Confisco da Poupança" in the 90s. According to Wikipedia (https://pt.wikipedia.org/wiki/Plano_Collor https://pt.wikipedia.org/wiki/Plano_Collor), 80% of every bank account above some value was frozen for 18 months. Even nowadays, rumors of a new "confisco" are enough for some people to take all their money out of their bank accounts (even though constitutional amendment 32, written a decade later, contains a clause specifically designed to prevent another "confisco").
  - dmichulke 11y ago
    At the current rate of inflation (12%?) the government taxes you even if you don't have your money in the bank.
    - st3v3r 11y ago
      That claim makes absolutely no sense. Taxes are revenue the government brings in. It can then use that money to do stuff. Inflation does not bring in revenue, and does not make it possible for the government to do stuff.
      - anon4this1 11y ago
        you should look up "debt monetization" and investigate how it relates to quantitative easing and money printing. Cliff's notes is that quantitative easing is really money printing used to finance government spending, and is really just another form of taxation, although it goes through a slightly convoluted process to get there.
      - cmsmith 11y ago
entwife 11y ago
I use cash (or check) to avoid the "Visa/MasterCard" tax -a few percent on each transaction. If there was a zero cost way for ordinary US citizens to move smallish sums ($1-500) electronically I'd use that instead.
- droffel 11y ago
  Wouldn't it be cool if there was some sort of "electronic money", so to speak, that could be send between people at low cost over the internet?
  - thescriptkiddie 11y ago
    I'm not sure if you're being facetious, or if you've never heard of Bitcoin.
    - deleted 11y ago
      [deleted]
    - dtparr 11y ago
      Having no personal experience with Bitcoin, do the exchanges not take a cut (either directly, or by adjusting exchange rates such that $X -> Y BTC -> $Z where Z < X)?
      - droffel 11y ago
        There are fees for conversion between BTC <-> USD. So long as you stay in BTC, the cost is ~$0.03 (at the moment) per transaction, regardless of size. Eventually, the goal is for a "closed loop" to form between suppliers, manufacturers, and retailers, to avoid the currency conversion costs. When you aren't paying a middleman a cut to convert between currencies, Bitcoin is extremely cost efficient. Also, on volatility: As market cap rises, the volatility will necessarily decrease. The "wild 10% swings in a day" phase is just a phase, I wouldn't expect BTC to be more volatile in the future than, say, gold, or any national currency like the Yen (which itself has swung 10% in value in the past 2 weeks). This is because as the market cap rises, it takes more and more capital to influence the price significantly. Right now, any random person with $10,000,000 can cause a swing, whereas if the market cap was 10x higher, it would require ~$100,000,000 to have the same effect in terms of percentage.
carsongross 11y ago
This is about NIRP, which is fundamentally about the bankruptcy of the current monetary/banking system. The crime talk is just a distraction.
Johnie 11y ago
Larry Summers, former Treasury Secretary, recommends that the US eliminate any denomination over $20 to reduce illicit activities. http://www.marketwatch.com/story/why-larry-summers-wants-to-take-away-the-100-bill-2016-02-16 http://www.marketwatch.com/story/why-larry-summers-wants-to-...
dtornabene 11y ago
Its 6 hours in and all but one of the subthreads have ignored (or simply don't care?) that this guy and his various sites/media is either straight up crazy or disinfo. This guy literally has an hour long youtube video on "Agenda 21". A sibling comment notes that they "hope these sorts of blogs don't become mainstream on hn". Its kind of important insofar as any sense of community is involved to reiterate that. This is serious garbage, one can find any number of discussions of money, utility and politics ranging from any ana-cap to anti-cap. This is mindless tripe.
hobarrera 11y ago
Data on the article is quite outdated by a couple of years, at least for Argentina. Most noticeably, tax for purchases outside the country are 35%, not 15%. "Blue dollars" are no longer a thing, since the government has not allowed people to buy dollars legally again.

113 points by known 11y ago

As someone who had to carry large amounts of cash regularly, I feel like the author is neglecting many of the costs of cash. Personal security is one of them, and certainly one that local government care a lot more about than controlling drug traffic. As someone who lived in Northern Sweden, freezing your fingers off is another — albeit negligible. More seriously, I doubt that rampant inflation was the tool Argentinian government used to force a technologically unimaginable solution on its citizen.

bertil 11y ago
Fake money is probably the bigger issue overall though.

snarfy 11y ago

"This note is legal tender for all debts, public and private" Once services have been rendered, it's illegal for someone to not accept cash as payment.

akgoel 11y ago
Unless, of course, physical cash no longer exists, and all you have is some sort of ephemeral digital cash in a financial institution that can be easily subject to a negative interest rate policy. A bank balance can lose nominal value with NIRP, but cash in-hand can't. Hence, the War on Cash.
- Swizec 11y ago
  Physical cash CAN lose value. Very fast too. My parents lived through the hyperinflation in Yugoslavia in the 90's. The stories they tell are ... fun. Ideally you exchanged everything into deutsche marks as soon as you got it. New denominations were being printed every few weeks because the currency was losing value etc. Hell, even when we became Slovenia I remember that at first, the highest bill was 1,000. Just ten years later, the highest had to be 10,000 because the thousand one just wasn't cutting it anymore. It was too impractical for the prices. For a more drastic example: in pre-war Germany it was more common to get mugged for bread than for cash. Wads of cash just weren't worth enough to bother.
  - CompelTechnic 11y ago
    Nominal value was the important term in the parent, i.e. a 100 dollar bill can't become a 99 dollar bill.
    - bbgtpm 11y ago
      Sure it can, banks would just have to modify the exchange rate between physical cash and bank deposits.
    - atom-morgan 11y ago
      The number on the paper != purchasing power
      - deleted 11y ago
        [deleted]
    - Swizec 11y ago
      Sure, but nominal value is not what you use to buy things. The nominal value in my bank account won't just go down on its own either. But what I can do with it will. Or is there a mechanism I don't know about that can lower nominal numbers in untouched bank accounts?
      - dragonwriter 11y ago
        > The nominal value in my bank account won't just go down on its own either. It would with negative interest rates.
        gegtik 11y ago
        presumably to reduce the inflation of prices. 6 of one, right?
- atom-morgan 11y ago
  Meanwhile in my bag I have a crisp $100 trillion Zimbabwe dollar bill I use as a bookmark.
- dragonwriter 11y ago
  > A bank balance can lose nominal value with NIRP, but cash in-hand can't. If by "nominal value" you mean "printed face value", then perhaps not (though there are plenty of time or environment-sensitive printing technologies that would allow that to change, even if there might be all kinds of good arguments against using them on currency.) If, instead, by "nominal value" you mean "official exchange/redemption value in the units of account in which the cash is denominated", sure it can; in fact, cash that does that has been suggested and, IIRC, used in some cases -- this is done by making the nominal value (that is, the official value in current units of account) equal to the face value at the time of issue, but decreasing over time based on the duration between the issue date on the cash and the current date, so that cash held longer is worth less, even in nominal terms, as a tool to increase the velocity of money.
abfan1127 11y ago
The average American commits 3 felonies a day. Just add it to the list. http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/1594035229 http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/...
kedean 11y ago
This assumes the service has already been rendered. If I own a store and you want to buy a candy bar from me, I can end the transaction when you attempt to pay me with a $100 bill. Since I haven't actually given you ownership of the candybar, there is no debt in place, yet. A restaurant doesn't have the same freedom, since they generally accept payment after the service is completed and you already owe them the debt for the meal.
- gambiting 11y ago
  The tricky question is - how does this work at petrol stations? You already have the fuel in your tank when you go to pay. Surely the service has been rendered at that point?
  - thesimon 11y ago
    They usually have signs at the pump saying "No $100" notes. Edit: At least in Europe you usually pump before paying by card/cash in the store. I guess it differs from the US because of the high crime rate there.
    - khedoros 11y ago
      I don't pay cash often, but when I have, I've pre-paid inside the store, and the pump automatically stops when I've gotten the correct amount of gas. It may be regional. This shows people posting a mix of pre- and post-pay anecdotes: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=105x6640808 http://www.democraticunderground.com/discuss/duboard.php?az=...
  - AnimalMuppet 11y ago
    You pay in advance if you want to pay cash. Or, you give the pump your credit/debit card (which is also paying in advance).
    - kedean 11y ago
      In fairness, it hasn't always been like that everywhere. In my hometown, the move to 'prepay when using cash' only happened about 10 years ago. I distinctly remember working at a gas station in high school and dealing with older customer who refused to believe that they couldn't just pump then pay.
utrex 11y ago
Where do you see this? I see authoritative statements saying otherwise. "Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise" https://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx https://www.treasury.gov/resource-center/faqs/Currency/Pages...
- qntty 11y ago
  You can't compel someone to pay you something other than cash. For people who insist on paying in cash, a business can just refuse to serve them.
- stronglikedan 11y ago
  > For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy. These are all examples where payment is being offered before service is rendered. OP is referring to instances where payment is being collected for services already rendered (i.e. debts).
  - utrex 11y ago
    OP is referring to some source of authority but not actually naming it. If OP is referring to the message on the Treasury notes, OP's interpretation is reasonable but OP should read more texts.
    - stronglikedan 11y ago
      OP qualified it with "Once services have been rendered", so OP's interpretation is exactly correct in that context.
dragonwriter 11y ago
> Once services have been rendered, it's illegal for someone to not accept cash as payment. That's actually incorrect. "Legal tender" has a much more subtle effect; what it means is that an attempt to pay in cash meeting the other legal requirements for a tender of payment has an effect on whether and how much damages may be collected if the creditor later sues the debtor for the debt. That doesn't mean that it is illegal not to accept cash, it does mean that not accepting cash for a debt already incurred may, under certain circumstances, negatively impact the availability of legal recourse to collect the debt.
themartorana 11y ago
Tell that to every government agency.

deleted 11y ago

[deleted]

jcfrei 11y ago

I really hope that these types of blogs don't become mainstream on HN.

utrex 11y ago
It's not just the alarmist tone or the jittery pacing that makes this listicle unworthy of broad attention, it's the rhetorical errors as well. The author attributes this change to a war on cash rather than a global trend in response to common pressures and doesn't provide any strong evidence that governments themselves are driving these forces. The selected links contain plenty of anecdotes but few balanced studies or statistics about why these changes are happening. There's an interesting element of truth here: the world is moving to new systems of payment and cash use is declining, but the author is trying to frame this as dangerous without deriving a strong argument and is not clearly framing the status of cash. 1 stars for an interesting premise and a weak execution.
- ihavedna 11y ago
  I think the upvotes are coming from an interest in this particular subject more than the source. I would like better material collected on the subject. Anyone have an alternative choice for research or discussion on this subject?
  - deleted 11y ago
    [deleted]
- scott_s 11y ago
  I found the tone problematic, and the "About" page even more-so. The blog covers, among other things, "important issues from 9/11 Truth and false flag terror".
philippnagel 11y ago
I have up voted despite sharing your sentiment. I am simply interested in the discussion.

waterlesscloud 11y ago

My stepdad operates a network of privately owned ATMs. You wouldn't believe the hoops he's had to jump through with banks to keep them stocked up with his own money.

joering2 11y ago
+1 and seriously interested. Can you elaborate??

jakobegger 11y ago

At the risk of getting a few downvotes, I'm going to state that I'm all for outlawing cash payments for amounts larger than a few thousand dollar/euro. Corruption and tax evasion are a big problem in Austria (as presumably in most parts of the world), and cash payments make them so much easier. I just don't see a legal reason why I'd want to pay for a large purchase in cash. Almost all large purchases require some kind of paper trail anyway, so it's not like giving up cash means giving up your anonymity. Am I missing something obvious?

wslh 11y ago
Even if I would agree with you, there is an issue with POS where Visa/Mastercard/AMEX control the space, so the government is favoring an oligopoly in the middle of every transaction (with credit cards). Also, you are playing against privacy because some corrupt people use cash, sounds a similar argument than prohibiting cryptography.
- chishaku 11y ago
  Encryption=terrorism, cash=terrorism. Larry Summers: "The fact that... in certain circles the 500 euro note is known as the “Bin Laden” confirms the arguments against it." https://www.washingtonpost.com/news/wonk/wp/2016/02/16/its-time-to-kill-the-100-bill/?postshare=8671455627637815&tid=ss_tw https://www.washingtonpost.com/news/wonk/wp/2016/02/16/its-t...
Swizec 11y ago
In Slovenia it is illegal to use cash for [business] transactions bigger than 100 or so euro. I moved out soon after that happened for unrelated reasons, but I haven't heard anyone non-shady complain. I haven't heard of any definitive results in driving down corruption and the grey market either though.
- tempodox 11y ago
  The fact that people don't understand the risks they're exposed to doesn't make those risks go away. And once the data is exploited it'll be too late.

recursive 11y ago

How are people going to buy drugs in the cashless future? I can't see it working.

thesimon 11y ago
Bitcoins? Dummy companies?
dragonwriter 11y ago
> How are people going to buy drugs in the cashless future? Barter (including exchange of services as well as goods).
- ericras 11y ago
  Tide detergent: http://nymag.com/news/features/tide-detergent-drugs-2013-1/ http://nymag.com/news/features/tide-detergent-drugs-2013-1/
logfromblammo 11y ago
If the US$100 and US$50 are eliminated, the black market will switch to gold as its reserve currency, and operate as a de facto currency exchange for customers using other forms of payment. Organized crime hawaladars will back a Bitcoin-like electronic transfer system, because actually moving around the physical gold too often is a pain in the ass, and exposes the shipments to additional risks.
duncan_bayne 11y ago
Want to buy my copy of Domain Driven Design? Only $175 to you, sir ;-)

kazinator 11y ago

As long as there are politicians, there will be cash. You can't (or don't want to) accept bribes, buy votes or hire hookers/strippers with traceable payment methods.

_yosefk 11y ago
I'd say the opposite. * The typical bribe is, you do something in your role as a government official, and later you legally get a high-paying job, or they pay you $100K-$200K/hour in speaking fees (the low number is Bush Jr's and the high number is Hillary's, AFAIK), etc. Works great with legal electronic payments. * "Buying votes" usually means, either you promise government money to a group of voters, or you promise a donor to do something when you get elected. Either way, you're buying votes with the government's money so no need for cash. If by buying votes you mean that you're Trump and you're paying for your campaign, again, nothing illegal there, I doubt he travels with stacks of cash. * "Hookers/strippers"... I dunno, whatever the problem with electronic payments there... I think a politician is in the best position to find a workaround, certainly in a better position than the average customer. In particular, if the workaround involves getting someone else to pay for it electronically, a politician is in a great position to reward that someone.
- dalke 11y ago
  Plus, cash plays no role in bribes like a free upgrade to the Presidential Suite, or "air routes that please an important member of Congress". (Quote from http://www.bloomberg.com/news/articles/2015-02-25/did-united-put-a-whole-route-in-the-sky-for-one-very-important-passenger- http://www.bloomberg.com/news/articles/2015-02-25/did-united... ).
Kiro 11y ago
I presume you've never been to Europe. I don't remember the last time I saw real physical cash. It's very uncommon.
- cornellwright 11y ago
  Are you serious? Every time I've been to Europe (I've lost count of how many times...) I've paid for many things with cash. I actually find it more inconvenient not to have cash there than in the US.

belorn 11y ago

I would not mind the problem as much if Banks worked like banks of old rather than opinionated service provides. Banks today limit how much cash is withdrawn and for what purpose, and any transaction is added to a permanent record. This record is then turned into precious customer data which can be used for any internal purposes, shared with partners (like insurance providers), and given to several government departments like tax collection, social security, the local police, secret police, national spy agency, foreign police and spy agencies, and so on. The customer has zero control and is barely recognized to be a stake holder at all. It is possible to create the cashless society without the above problems, but no governments or banks are interested.

witty_username 11y ago
Could you elaborate on how the "banks of old" were better?
- themartorana 11y ago
  I was the customer, it was my money, they were required to have cash on hand, I made money when my money was loaned, there were no fees, like - NO FEES - and so on...
  - forgetsusername 11y ago
    >there were no fees, like - NO FEES There were also no services. I don't understand the bank hate around here. There are plenty of low/no fee banks. It's a competitive business, and if you're half-way assertive you can get favourable terms on nearly everything they offer. I just received a $100 gift card for sitting down and discussing the potential to be a customer at a major Canadian bank, and I don't do anything but the basics. They want your business.
    - tertius 11y ago
      > I don't understand the bank hate around here. They limit what you can do with your own money. The reason for getting deposits is so that they can loan 10x or 100x (or whatever your country allows) on the deposit and earn interest/fees. That doesn't benefit me, only them. The reason I use a bank is so that I can have "security" and "ease" in transfer/payment. They make a lot more off of me than the utility I describe above.

qq66 11y ago

The actors who the government has the most legitimate interest in surveilling (drug cartels, racketeers, corrupt officials, etc.) are the best-equipped to switch from paper currency to alternate currencies (precious metals, gems, etc).

wheaties 11y ago
Another angle would be how this could play out with civil forfeiture. Remember, this was originally only used on those people who were suspected of drugs, organized crime, etc but quickly spread to the general population. - Could they flag certain transactions? - There's also IRS requirements for banks to report many small transactions which are used to skirt the $10k reporting requirements. How would this work for small businesses that legitimately need to do this?
flatline 11y ago
They are also the best equipped to launder money through the banking system regardless of its origin: that is what they already do!

MikeNomad 11y ago

I'm not seeing an article about a war on cash. Rather, I'm seeing an article about the elimination of instruments that are not Global Reserve Currencies. The idea that the US would do away with FRNs has so many outcomes/levels associated with it, I can't get my head around it.

danbolt 11y ago

I found the bit of this article on the Canadian penny a bit irrelevant, and perhaps misleading. Or, I'm under the impression that it was discontinued due to the fact that one or two cents were a fraction of the average purchase, rather than some sort of initiative to discourage cash usage. I'm not very interested in using Bitcoin at the moment, but I like how its design could enable me to have some representation of electronic currency that could give some of the decentralized flexibility of cash. Perhaps a cashless society could employ structures such as those.

soperj 11y ago
Yeah, the Canadian penny was discontinued because it actually cost more than a penny to make. Also pennies are useless.
- Afton 11y ago
  I don't think this is true. Coins are multi-use. Obviously the government wants to pay as little as possible in production costs, but there isn't any reason that the production cost has to be strictly less than the unit-cost of the money.
  - hluska 11y ago
    A relevant quote from the Royal Canadian Mint: In Economic Action Plan 2012, the Government announced it would phase out the penny from Canada's coinage system. The decision to phase out the penny was due to its excessive and rising cost of production relative to face value, the increased accumulation of pennies by Canadians in their households, environmental considerations, and the significant handling costs the penny imposes on retailers, financial institutions and the economy in general. (Source - http://www.mint.ca/store/mint/about-the-mint/phasing-out-the-penny-6900002#.VsTJNkXOfv4 http://www.mint.ca/store/mint/about-the-mint/phasing-out-the...)
    - Afton 11y ago
      Huh, they do say 'relative to face value'. I still think that reasoning is flawed, but I'm not going to argue with the RCM. Thanks for the link!

logfromblammo 11y ago

I heard just this morning over the radio that some bureaucrat was floating the idea of a moratorium on the printing of new US$100 and US$50 Fed notes. The bit explicitly mentioned that US$1M fits neatly inside one briefcase when using US$100 bills, but it would take three briefcases with US$20 bills. This may be true, but I'm a little wary of the argument now, as the drug trade, counterfeiting, and money laundering line was used when the US$1000 and CAN$1000 notes were retired, and they are worth less now than they were then. Loss of high denomination banknotes has not impeded the business of the underworld, but loss of cash transactions means that everyone in legit business now has to pay a tax to Visa and Mastercard for acting as an intermediary in payments processing. A pile of $100 bills is $100/g, or $45400/lb. $50 bills are $50/g, or $22700/lb. A $20 bill is about $20/g, or $9080/lb. Gold is $38.82/g, or $17607.88/lb. Clearly, if you eliminate the US$100, cash movers switch to the US$50. If you eliminate that, they switch to gold, not the US$20. US$1M in $100 bills is 22 pounds (10 kg) of cash. In US$50 bills, it is 44 pounds (20 kg). In gold, it is 57 pounds (26 kg). In US$20 bills, it is 110 pounds (50 kg). Someone in the monetary bureaucracy might want to reconsider the unintended consequences of the black market drug trade switching to gold as its preferred currency rather than paper money.

Symbiote 11y ago
Gold is going to be somewhat harder to spend. "The Serious Organised Crime Agency claimed that "90% of all €500 notes sold in the UK are in the hands of organised crime", revealed during an eight-month analysis." [1] €500 weighs 1.12g, but is worth $1.11, so US$1M in €500s is 2kg. A very decent saving. Of course, the UK doesn't use the Euro, so it would be interesting to see the same analysis done in several different Eurozone countries. [1] http://news.bbc.co.uk/2/hi/uk_news/8678886.stm http://news.bbc.co.uk/2/hi/uk_news/8678886.stm

vaadu 11y ago

Cyprus had bank account seizures and some eastern European nations seized private pension accounts. You can't seize what you don't control. No cash means no anonymity No cash allows banks to charge negative interest rates

cesarb 11y ago
Here in Brazil, we had the "Confisco da Poupança" in the 90s. According to Wikipedia (https://pt.wikipedia.org/wiki/Plano_Collor https://pt.wikipedia.org/wiki/Plano_Collor), 80% of every bank account above some value was frozen for 18 months. Even nowadays, rumors of a new "confisco" are enough for some people to take all their money out of their bank accounts (even though constitutional amendment 32, written a decade later, contains a clause specifically designed to prevent another "confisco").
- dmichulke 11y ago
  At the current rate of inflation (12%?) the government taxes you even if you don't have your money in the bank.
  - st3v3r 11y ago
    That claim makes absolutely no sense. Taxes are revenue the government brings in. It can then use that money to do stuff. Inflation does not bring in revenue, and does not make it possible for the government to do stuff.
    - anon4this1 11y ago
      you should look up "debt monetization" and investigate how it relates to quantitative easing and money printing. Cliff's notes is that quantitative easing is really money printing used to finance government spending, and is really just another form of taxation, although it goes through a slightly convoluted process to get there.
    - cmsmith 11y ago

entwife 11y ago

I use cash (or check) to avoid the "Visa/MasterCard" tax -a few percent on each transaction. If there was a zero cost way for ordinary US citizens to move smallish sums ($1-500) electronically I'd use that instead.

droffel 11y ago
Wouldn't it be cool if there was some sort of "electronic money", so to speak, that could be send between people at low cost over the internet?
- thescriptkiddie 11y ago
  I'm not sure if you're being facetious, or if you've never heard of Bitcoin.
  - deleted 11y ago
    [deleted]
  - dtparr 11y ago
    Having no personal experience with Bitcoin, do the exchanges not take a cut (either directly, or by adjusting exchange rates such that $X -> Y BTC -> $Z where Z < X)?
    - droffel 11y ago
      There are fees for conversion between BTC <-> USD. So long as you stay in BTC, the cost is ~$0.03 (at the moment) per transaction, regardless of size. Eventually, the goal is for a "closed loop" to form between suppliers, manufacturers, and retailers, to avoid the currency conversion costs. When you aren't paying a middleman a cut to convert between currencies, Bitcoin is extremely cost efficient. Also, on volatility: As market cap rises, the volatility will necessarily decrease. The "wild 10% swings in a day" phase is just a phase, I wouldn't expect BTC to be more volatile in the future than, say, gold, or any national currency like the Yen (which itself has swung 10% in value in the past 2 weeks). This is because as the market cap rises, it takes more and more capital to influence the price significantly. Right now, any random person with $10,000,000 can cause a swing, whereas if the market cap was 10x higher, it would require ~$100,000,000 to have the same effect in terms of percentage.

carsongross 11y ago

This is about NIRP, which is fundamentally about the bankruptcy of the current monetary/banking system. The crime talk is just a distraction.

Johnie 11y ago

Larry Summers, former Treasury Secretary, recommends that the US eliminate any denomination over $20 to reduce illicit activities. http://www.marketwatch.com/story/why-larry-summers-wants-to-take-away-the-100-bill-2016-02-16 http://www.marketwatch.com/story/why-larry-summers-wants-to-...

dtornabene 11y ago

Its 6 hours in and all but one of the subthreads have ignored (or simply don't care?) that this guy and his various sites/media is either straight up crazy or disinfo. This guy literally has an hour long youtube video on "Agenda 21". A sibling comment notes that they "hope these sorts of blogs don't become mainstream on hn". Its kind of important insofar as any sense of community is involved to reiterate that. This is serious garbage, one can find any number of discussions of money, utility and politics ranging from any ana-cap to anti-cap. This is mindless tripe.

hobarrera 11y ago

Data on the article is quite outdated by a couple of years, at least for Argentina. Most noticeably, tax for purchases outside the country are 35%, not 15%. "Blue dollars" are no longer a thing, since the government has not allowed people to buy dollars legally again.