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Banks, gangsters and the strange resurgence of cash
- justshowpost 5y agoNothing is strange here. Interest rates are dull and Sleepy Joe is about to spy on everything over $599, so money are much safe in the wall safe. That is, not every American can afford offshore banking services.
- Waterluvian 5y agoI have like $200 cash just sitting in my room for years in case I need it for something that doesn’t take debit or credit like a carnival trip (I haven’t carried cash, ever, in years). I wonder how many others do the same? It adds up I imagine.
- lowercased 5y agoprobably does add up, but... there's loads of folks with no cash... which might balance it out...? i've got ... ~$1000/cash in the house. There's an occasional consideration of regional power outages where we might need to leave the area for a day or two (has happened yet, but we came close twice). Mostly useful to pay handyman/lawn guys now and then, then top it up now and then. Have considered holding on to a bit more, but we've never really needed more than a few hundred at any one point, so not sure there's much utility.
- Ralo 5y agoWouldn't that be accounted for already? You withdrew that from a bank.
- Waterluvian 5y agoOh perhaps. Maybe I misunderstand the situation but I thought if it wasn’t being circulated for years it would be considered unaccounted for.
- yholio 5y agoI have a cash stash in my car for this very reason. I can't count the number of times it got me out of deep crap. When you are on an outdoors expedition in the middle of nowhere, you can lose your wallet, your phone might lose signal, you will find rural services that only take cash. Always having the money for a full tank of gas and a night of cheap accommodation can prevent those very bad decisions and situations where you need to call the local authorities to rescue you, or worse. It's a bona fide survival technique for the modern world.
- lotsofpulp 5y agoI keep much more cash than that in case there is a problem with electricity or the bank networks or my electronic accounts get seized.
- kaminar 5y agoBecause politicians have them to our enemies in exchange for payoffs. Duh.
- dade_ 5y agoPeople that live in countries with unstable or collapsed currencies use USD (I assume the same of Euros and GBP) as well. Everyone in Cuba wants USD now for example. It isn’t for money laundering or terrorism, it is for toothpaste and clothing. I imagine Euros are popular in Turkey these days.
- cascom 5y agoI don’t know how you write an article on this subject and don’t mention this. Argentina, Venezuela, etc. USD/EUR cash is how people save/avoid inflation. Plus USD is the official (?) currency in Panama, and de facto currency in half the Caribbean. Not to mention the western governments have been shipping cash by the plane load into conflict zones to pay off war lords and other leaders
- q1w2 5y agoAlso extremely common in Myanmar and much of Africa. It is literally considered the WORLD reserve currency. The more turmoil in economies abroad, the more USD is in demand to replace failing currencies. Turkey is a great example - people were paying a premium on USD just to get their savings out of Turkish Lira a couple years ago.
- h2odragon 5y agoThey are circulating in places beyond the borders, I assume. We let North Korea print their own$100 bills for years as a form of off the books aid, but once that stopped the underworld needed someone to provide the currency. Remember the pallets of cash being sent to Iraq?
- eganist 5y agoI had to Google the north korea thing. https://en.wikipedia.org/wiki/Superdollar https://en.wikipedia.org/wiki/Superdollar TIL. Thanks!
- joe_the_user 5y agoI'd just note a full read of the article shows that the origin of the bills is apparently quite murky and North Korea is just one of several accused sources. Israel blames Syria, some US media blames the CIA. Nothing is proven and nothing is certain.
- BitwiseFool 5y ago>"blames the CIA" I cannot believe people would dare suggest that such an upstanding organization would do such a thing. For shame! /s
- fy20 5y agoThe most interesting part of that article was this: > On 21 December 2011, the Irish High Court dismissed the US application for Garland's extradition,[4][25] as the alleged offence took place in Ireland and was therefore not subject to extradition. I wonder why the UK doesn't have that clause but Ireland does?
- petilon 5y ago> We let North Korea print their own $100 bills for years as a form of off the books aid That's very hard to believe. Citation needed!
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- dustintrex 5y agohttps://archive.md/2021.10.20-145649/https://www.economist.com/1843/2021/10/18/billions-of-banknotes-are-missing-why-does-nobody-care https://archive.md/2021.10.20-145649/https://www.economist.c...
- paxys 5y agoI don't know why the article frames it as some crazy big mystery and tries to come up with different hypotheses for it throughout. The answer is clear from the very first example they start with, and explained further towards the end – the cash is circulating in the grey/black market economy and across international borders. Demand for cash is rising because this economy is growing at a similar rate to the regular one. As for the "why does nobody care part", the possible explanation is unconvincing. Yes central banks enjoy the power of being the sole issuer of currency, but the few cents per note they get to keep is hardly where their real interests lie.
- hungryforcodes 5y agoOr it could be kind of "propoganda" / PR from the people who are proponents of a cashless society. An assassination of cash in the media would be the logical place to start.
- rsj_hn 5y agoThere is a lot of rumor and speculation about very benign things. 1. Precautionary savings. In a low interest rate environment, there is not the same penalty for holding cash as getting interest in a savings account. A lot of people find it prudent to have a buffer of cash, say enough to cover 1 month of expenses. So cash withdrawn from an ATM but put into a piggybank or under the mattress will appear here as "missing". If you want to change the situation, then raise interest rates and increase law and order. 2. Crime. Sure, crime is conducted in cash, and a lot of that money is funneled to Latin America. This is a known thing -- it's more seignorage income for the Fed unless the cash comes back into the economy, but much of it never will as several economies are dollarized. I don't think there has been a material increase in organized crime, so I would think household precautionary savings is the reason. 3. Let's get some perspective. $50 Billion in cash is basically nothing. It's like 2% of currency in circulation. So this whole article is complaining that 2% of currency is not circulating. Well, OK. Must be a slow day over at the Economist. https://fred.stlouisfed.org/series/WCURCIR https://fred.stlouisfed.org/series/WCURCIR
- Arbalest 5y agoIf we read into this article as pushing an agenda, then the agenda is probably written here. https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-interest-rates-work/ https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-nega...
- ausername42027 5y agoDownplaying is being "only" 2% of currency in circulation is really strange. It is 2% of currency in circulation of the world's largest economy and the de facto international currency. The US accounts for almost 16% of the GLOBAL GDP when adjusted for PPP. I guess people just love to be contrarians on HN.
- bombcar 5y agoIt’s $166 per person in the USA. The horror.
- dylan604 5y ago
- malwarebytess 5y agoWhat if it's simpler than that. People still use cash, but most of the "money" is tied up in finance's parasitism. So while the amount of e-cash has skyrocketed, cash is still circulating and in high use/demand among the people. I know that for facebook marketplace/craiglist I exclusively use cash... when I buy something from my neighbors or go to a non-chain market I go out of my way to use cash since it saves on transaction fees (and taxes, lol.) I buy and restore classic cars as a hobby and I always buy/sell them in cash if I can.
- anm89 5y agoI remember reading a while back that at some point at the beginning of our time in Afghanistan, at some point we shipped multiple pallets of bundled $100 dollar bills and we had no idea where any of it went https://www.theguardian.com/world/2007/feb/08/usa.iraq1 https://www.theguardian.com/world/2007/feb/08/usa.iraq1
- hunterb123 5y agoWe have a habit of doing that: https://www.cnn.com/2016/08/03/politics/us-sends-plane-iran-400-million-cash/index.html https://www.cnn.com/2016/08/03/politics/us-sends-plane-iran-...
- knownjorbist 5y agoThis isn't the same at all, other than it's a lot of money going somewhere in the middle east. It was their own money being returned to them and not pallets earmarked for development disappearing into the night.
- hunterb123 5y agoWell that's the official story. The ulterior is it was basically a ransom payment for hostages released at the same time. But really I was just noting how we love sending pallets of cash to our adversaries. We have no way of knowing how they spent those pallets of bank notes in either exchange. The whole point was our government loves to use cash in deals yet label civilians with too much cash as criminals!
- knownjorbist 5y agoThe former was not sending pallets of cash to our adversaries. Agreed that asset forfeiture should be illegal.
- hunterb123 5y ago> then distributed the cash with no proper control over who was receiving it and how it was being spent. > Some of the funds could have enriched both criminals and insurgents fighting the United States. Literally in the article GP linked. You could argue that we don't know for sure, but the point is the US sends cash around willy nilly that can easily fall in the hands of terrorists while treating Americans like criminals if they have anything above pocket change.
- stanski 5y agoI guess we live in a time when cash is now a scary thing. This is kind of funny... And makes me feel old.
- da_big_ghey 5y agoNo this probably is astroturfing a fear of what is being done with cash, try to make it seem like having cash is not normal and only for crime, then government can ban it to gain more complete control on monetary system and all transaction.
- Loranubi 5y agoBillions of new banknotes are printed every day. Why does nobody care?
- mikewarot 5y agoSupply chains are disrupted everywhere, wouldn't it be a quite reasonable precaution to have a large amount of cash on hand, like having a months worth of toilet paper, just in case? Running out of either is not fun. I also have 1 real US dollar that I keep in my wallet as a reminder, it was minted in New Orleans in 1901, it's 120 years old, and can't be inflated away like Johnson sandwiches or paper money.
- StanislavPetrov 5y agoI find it strange that people trust the banks with their money, given their history and their behavior.
- leetcrew 5y agowhat's the alternative? there's a small risk that the bank screws me at some point, but if I don't make some kind of positive EV investment with my savings, it's a near guarantee that I'll never be able to retire.
- onlyrealcuzzo 5y agoDeposit insurance? https://en.wikipedia.org/wiki/Deposit_insurance https://en.wikipedia.org/wiki/Deposit_insurance It seems like most countries have an equivalent of FDIC.
- imtringued 5y agoIn my opinion the deposit insurance programs are ok but the way they are financed basically begs banks to be insolvent because eventually the government chips in and that's where they end up making their guaranteed profits.
- q1w2 5y agoI trust the bank more than I trust my mattress. All risks are relative.
- walterbell 5y agoThis month, G7 finance ministers released a policy paper on Central Bank Digital Currencies, https://www.gov.uk/government/publications/g7-public-policy-principles-for-retail-central-bank-digital-currencies-and-g7-finance-ministers-and-central-bank-governors-statement-on-central-bank https://www.gov.uk/government/publications/g7-public-policy-... > When designing CBDCs, public authorities should look to build in ways of countering fraud and other forms of illicit finance by looking to incorporate advancements in technology and/or innovative solutions that may improve the authentication and verification of transactions. > Public authorities’ powers and use of data in any CBDC ecosystem to counter their use for illicit finance should be set out transparently in national legislative frameworks (see Principle 2) and those powers should not be used for other purposes. We can expect bank lobbying in G7 countries for new legal kill-switch, data harvesting and analytics powers to "authenticate and verify" EVERY transaction that uses a national CBDC. Since CBDCs are scheduled for deployment by 2025, the pre-requisite national legislation would be needed by 2023.
- _8j50 5y agoAll noncash methods of payment have strings attached where consumers and merchants alike are subject to various controls and costs. Cash is simple, exchange something in your posession for goods and services. It cannot be used as a means of identity based regulation or to audit who is buying what from whom. I mean, bitcoin exists because of how unacceptable this is to everyone but the middlemen, bureaucrats and purse clutchers. It seems a bit obvious but I wanted to stress on this point that a cash resurgence could just mean market participants wanting more liberty.
- bserge 5y agoI always have cash because the bank, at any point, can decide to freeze my account until I show up in person with some arbitrary ID/documents and beg on my knees. That's the reality for most people and they don't even realize it. I guess once you have enough money it's different, but for an average non-millionaire chump, it's best not to trust anyone too much.
- sofixa 5y agoThat's why i personally have a few bank accounts in different banks, with cards on different networks. The risk of a banking/network error is significantly lower that way.
- chrononaut 5y ago> The risk of a banking/network error is significantly lower that way. The risk of a banking/network error is significantly higher that way, although the risk that it affects all deposited funds is significantly lower.
- walterbell 5y agoYes, articles like this one can become inadvertent advertisements for the benefits of cash.
- hungryforcodes 5y ago
- DeathArrow 5y agoAny link without the paywall?
- aphroz 5y agoMaybe this: http://webcache.googleusercontent.com/search?q=cache:w1IazCkDpyMJ:https://www.economist.com/1843/2021/10/18/the-mystery-of-the-missing-ps50bn&hl=fr&gl=vn&strip=1&vwsrc=0 http://webcache.googleusercontent.com/search?q=cache:w1IazCk...
- galaxyLogic 5y agoThere is the interesting history of Mansa Musa whose lavish spending of gold caused a recession. So it's not like gold is an absolutely safe asset either. It's possible we will find much more gold in Earth's mantle or on some asteroids. Then what? https://en.wikipedia.org/wiki/Mansa_Musa#Islam_and_pilgrimage_to_Mecca https://en.wikipedia.org/wiki/Mansa_Musa#Islam_and_pilgrimag...
- spiralx 5y agoEurope had the Great Bullion Famine in the 15th century causing deflation across the continent, which was ended by the Spanish flooding Europe with gold from the Americas, causing massive inflation instead. https://en.wikipedia.org/wiki/Great_Bullion_Famine https://en.wikipedia.org/wiki/Great_Bullion_Famine A long period of deflation followed by a long period of over-inflation doesn't scream stability to me.
- gremloni 5y agoCash is king. Totally anonymous, easy to carry and works when there’s no power grid. Long live cash.
- nivenkos 5y agoI hope to see the day we ban cash. Here in Sweden, it's almost there. It's pretty much only used by tax dodgers and criminals here now.
- selfhoster11 5y agoMust be nice to never expect your government to turn against you.
- eitland 5y agoNext door, in Norway, the Norwegian bank is quite clear that accepting cash is required for every shop and failure to do so will be punished (unmanned kiosks and vending machines seems to be allowed though). I'm actually in favour of that, not because I fear my current government but because it - is convenient (much better than gift cards) - feels good to be able to buy stuff without telling my bank and Google and who knows who else what I buy - the banks reason is because it might be necessary in emergencies which also seems like a really good reason.
- nivenkos 5y agoBut banning cash, stops all petty crime, tax evasion, drug dealing, etc. immediately. It's such a great solution and we're so close! No-one will rob you when you have no cash to take, and they can't sell your phone anywhere since it could be traced (and the phone is now locked out and banned via IMEI, etc.). Technology could make society so much safer, so easily. And cards can work offline in an emergency, like they do on aeroplanes. Just normal shops would need to have this capability.
- eitland 5y ago> But banning cash, stops all petty crime, Do you really think criminals would give up this easy? Or go on to steal jewelry, watches, demand you buy gift cards as extortion or payment for stolen goods etc? > tax evasion, I'm fairly certain most significant tax evasion happens without any cash already. > drug dealing, etc. immediately. Again, do you really think this? As mentioned above criminals doesn't have a history of just putting up a sad face and start doing something useful instead. By the way, the more I learn the more I think we should end prohibition of more drugs, just like we did with alcohol. That could actually put a sad face on a number of criminals.
- MomoXenosaga 5y agoAmusing most people I know only use cash for drug dealers. Even my mom stopped using cash when the pandemic hit. But I am located in a stable country so mileage may vary.
- satellite2 5y ago> This seemingly counterintuitive paradox can be explained by demand for banknotes as a store of value in the euro area coupled with demand for euro banknotes outside the euro area,” the ECB’s analysis concluded. Strip away the jargon and it’s just another way of saying that people want banknotes because people want banknotes. I think they missed the point massively in this article, the ECB comment is pretty self explanatory. What they mean here is that other central banks (Japan and China for instance) and autocrats (and not gangsters at least not significantly) prefer keeping their foreign currency in cash despite the extra costs because western countries have the annoying habit to lock foreign electronic funds on a whim.
- davidgerard 5y agoJ. P. Koning noticed this a year ago - he blames crooks having a hard time laundering money in pandemic lockdowns. https://jpkoning.blogspot.com/2020/07/how-pandemic-has-clogged-global-economy.html https://jpkoning.blogspot.com/2020/07/how-pandemic-has-clogg...
- 99mans 5y agoComplete horseshit propaganda from the biggest pro-globalist newspaper. > For most of us, a bank account isn’t about profit or loss, it’s about security: it prevents your life savings from being erased by a house fire, burglary or infestation of rodents Guys, there's totally not a fiat currency collapse incoming. It's RODENTS eating CASH you have to worry about. Keep calm and trust the banks until the bitter end. How does anyone read this bs with a straight face?
- bouncycastle 5y agoI like to use cash for the privacy. If you are concerned about giving your data to Facebook, then you should also be concerned about giving your data to the banks. I'd argue that the banks have more important information on you, and you never known who they share it with
- stronglikedan 5y agoI like to use cash for the bribery. Not the illegal/corrupt kind, but the little things. Like not having to wait for a table at a restaurant, or having my valeted car already at the curb when I walk out. There will always be a place for cash.
- bouncycastle 5y agoExactly! Cash is king in this. You can just slip it under, no need for anyone to carry electronic terminals and fiddling with buttons or touch screens. And also vending machines! (Especially when you're a tourist in another country.)
- silexia 5y agoWells Fargo recently charged me $12 to deposit $9,000 cash. I have more cash, but why would I deposit it if they take it? I can use it to get discounts from service companies instead.
- FateOfNations 5y agoTransacting in cash isn't as "free" as many people like to think. There are real costs associated with processing, transporting, and securing it that someone has to pay.