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Cash is a necessary mechanism in the economy. The good thing is that it's become a "hobby" mechanism. Imagine the scenario where you come into £1m in cash by "

by sgt101 4y ago

Cash is a necessary mechanism in the economy. The good thing is that it's become a "hobby" mechanism. Imagine the scenario where you come into £1m in cash by "finding" it. What are you going to do with it? You can't buy a house, you can't put it in the bank, you can't invest it in stock or a pension. You could subsidize your lifestyle a bit - but not vastly due to the risk of someone noticing. The best idea that I can come up with is to start a cash business and launder the money through that; for example a burger van or something... Probably you could build that to about 100k a year and get away with it, just, maybe. Quite a lot of work and inconvenience to do it. Of course you could try and get it laundered in a criminal conspiracy (a-la breaking bad) but you will just get robbed. Maybe used cars would work as well. Maybe you could drive round and buy up some nice wine or something like that that keeps for a long time... I think you can pay cash for a couple of hundred without attracting too much attention. You are on the clock as well - every 5 years or so the notes change and stop being accepted. The point is that cash works well for the low end informal economy, builders and plumbers and window cleaners can make their businesses work with it. It doesn't work so well for oligarchs. Crypto does. That's just one reason it's so bad and I don't mourn for this. The state will not give up it's monopoly on money or violence. Anyone who challenges either of these will find the other deployed against them.

capableweb 4y ago
> You are on the clock as well - every 5 years or so the notes change and stop being accepted. In what country are you basing this comment on? I haven't heard of any cash notes becoming "outdated" or "expired" after five years in any country I frequent. > It doesn't work so well for oligarchs It does work well as long as everyone is inside the gray/black markets, as they won't ask questions where you got your £1m cash from when you buy a property in the dark from them. How do you think most large shipments of drugs are being sold/bought? Trading cash for the drugs, almost exclusively. That's why when the police does busts of large shipments, they often come across large cash stashes as well, if the deal was just made.
- pjc50 4y ago
  Five years is too short for an average, but demonetization and replacement does happen, and not just in India. The UK is in the process of phasing out paper notes, for example: https://www.bankofengland.co.uk/banknotes/exchanging-old-banknotes https://www.bankofengland.co.uk/banknotes/exchanging-old-ban... A more spectacular example happened in the Northern Bank robbery when a significant fraction of all the bank's notes in circulation were stolen from its vaults; the bank decided to replace them making all the stolen but unlaundered ones worthless. The US is unusual in not explicitly withdrawing old note series from circulation, despite their lacking modern anti-counterfeiting features. To a great extent all this AML is because of the "war on drugs" and the extensive use of large amounts of cash in drug dealing. Financial sanctions are a more recent reason.
  - tomp 4y ago
    > The UK is in the process of phasing out paper notes You wrote it in a way that makes it sound really evil. In reality they’re just exchanging paper notes for plastic notes - some thing but harder to tear/destroy.
    - patrickthebold 4y ago
      But do people have to stop accepting the paper ones on a certain date?
      - justincormack 4y ago
        Generally you have to take them to a bank after a while, and eventually to the Bank of England. The paper 20 and 50 notes cease to be legal tender next month so people can accept them but probably won’t.
pjc50 4y ago
I'd identified this pattern before that cash provides a sort of "non scalable privacy". Individual notes aren't really traced and normal size cash transactions can be private. The larger the transaction, the larger the physical bundle of notes gets. You can fit £1m into a briefcase maybe, but if you want to move $12bn you need a serious military operation: https://www.theguardian.com/world/2007/feb/08/usa.iraq1 https://www.theguardian.com/world/2007/feb/08/usa.iraq1 (prior to this, there were a few incidents during WW2 where for various reasons vast amounts of value in the form of gold had to be moved around. At considerable risk. https://www.warhistoryonline.com/instant-articles/hms-edinburgh.html https://www.warhistoryonline.com/instant-articles/hms-edinbu... ) Whereas with digital money, one penny and a trillion dollars are equally weightless. Huge transactions that can't be interdicted start to raise problems for the state, as you say.
stef25 4y ago
Here in Belgium they're making a serious effort to stamp out the use of cash. It's harder and harder to get it, cash machines just close down or are inside a building that closes at 8PM, 10PM even in areas full of bars. The thing is that it's become so easy now to pay by card, basically anyone can get a payment terminal the size of an iPhone and all cards are now contactless. So while I'm against it, I think the govt + banks are successful and we can't provide many counter arguments apart from privacy / libertarian ones that most people dgaf about

by sgt101 4y ago

capableweb 4y ago

> You are on the clock as well - every 5 years or so the notes change and stop being accepted. In what country are you basing this comment on? I haven't heard of any cash notes becoming "outdated" or "expired" after five years in any country I frequent. > It doesn't work so well for oligarchs It does work well as long as everyone is inside the gray/black markets, as they won't ask questions where you got your £1m cash from when you buy a property in the dark from them. How do you think most large shipments of drugs are being sold/bought? Trading cash for the drugs, almost exclusively. That's why when the police does busts of large shipments, they often come across large cash stashes as well, if the deal was just made.

pjc50 4y ago
Five years is too short for an average, but demonetization and replacement does happen, and not just in India. The UK is in the process of phasing out paper notes, for example: https://www.bankofengland.co.uk/banknotes/exchanging-old-banknotes https://www.bankofengland.co.uk/banknotes/exchanging-old-ban... A more spectacular example happened in the Northern Bank robbery when a significant fraction of all the bank's notes in circulation were stolen from its vaults; the bank decided to replace them making all the stolen but unlaundered ones worthless. The US is unusual in not explicitly withdrawing old note series from circulation, despite their lacking modern anti-counterfeiting features. To a great extent all this AML is because of the "war on drugs" and the extensive use of large amounts of cash in drug dealing. Financial sanctions are a more recent reason.
- tomp 4y ago
  > The UK is in the process of phasing out paper notes You wrote it in a way that makes it sound really evil. In reality they’re just exchanging paper notes for plastic notes - some thing but harder to tear/destroy.
  - patrickthebold 4y ago
    But do people have to stop accepting the paper ones on a certain date?
    - justincormack 4y ago
      Generally you have to take them to a bank after a while, and eventually to the Bank of England. The paper 20 and 50 notes cease to be legal tender next month so people can accept them but probably won’t.

pjc50 4y ago

I'd identified this pattern before that cash provides a sort of "non scalable privacy". Individual notes aren't really traced and normal size cash transactions can be private. The larger the transaction, the larger the physical bundle of notes gets. You can fit £1m into a briefcase maybe, but if you want to move $12bn you need a serious military operation: https://www.theguardian.com/world/2007/feb/08/usa.iraq1 https://www.theguardian.com/world/2007/feb/08/usa.iraq1 (prior to this, there were a few incidents during WW2 where for various reasons vast amounts of value in the form of gold had to be moved around. At considerable risk. https://www.warhistoryonline.com/instant-articles/hms-edinburgh.html https://www.warhistoryonline.com/instant-articles/hms-edinbu... ) Whereas with digital money, one penny and a trillion dollars are equally weightless. Huge transactions that can't be interdicted start to raise problems for the state, as you say.

stef25 4y ago

Here in Belgium they're making a serious effort to stamp out the use of cash. It's harder and harder to get it, cash machines just close down or are inside a building that closes at 8PM, 10PM even in areas full of bars. The thing is that it's become so easy now to pay by card, basically anyone can get a payment terminal the size of an iPhone and all cards are now contactless. So while I'm against it, I think the govt + banks are successful and we can't provide many counter arguments apart from privacy / libertarian ones that most people dgaf about