It’s unavoidable: Cash will come to an end. The Bank of Norway want’s to phase it out and so want’s the US government. It’s cash which enables the black market and as governments worldwide intensify their fight against tax evasion, cash is an impediment to that fight.
Savings are bad
In many western countries interest rates are on an all-time low. As it seems technology can no longer sustain the rate of growth we got so accustomed with. Technology in hand with automation have brought us a service market devoid of people, or at exceptionally high prices. Personal wages are riddled by tax wedges which steeply increase labor costs and put pressure on to replace human workforce by machines and self-service. If you hear self-service, personal responsibility, or entrepreneurship, be warned that others are in effect behind your money.
Low interest rates are a signal of the economy in dire conditions. When you witness things going bad it’s a natural reaction to put aside your savings for the bad times. But putting savings aside is what business eagerly tries to spoil for you.
Savings are essentially dead capital. Savings used to “work” for the banks which lent money to others. In effect the money banks are working with is fiat money, money which does not exist and which is not backed by any real value. It’s also impossible to be backed by anything real, as no physical property can keep pace with the risky financial products investment banks deal with. If key investors would claim their earnings, the system would crash.
Especially in times of low interest rates, private savings are of little to no value to banks and effectively hinder economic growth. Private fluid savings represents money which is not available to be spent on goods, it is a nuisance which should be better get rid of. This government thrust coincides well with the fight against tax evasion to totally abandon cash.
See you savings invalidated – or consume!
So imagine what would happen once cash get’s abandoned. Plastic money and intermediaries like Paypal would experience a further uplift. It would be impossible (in theory) to support undeclared work as there is no unregistered cash. For the first time in history money would have strings attached, every cent spent could be tracked and traced including the hands it runs through and the goods and services spent in exchange.
However, arguably the biggest effect of abandoning cash is the control over your savings. Like excessive collected holidays will become eventually invalidated, so will your savings become invalidated. Face it – your dead money in hidden coffers (if you are lucky) is a nuisance to the economy.
National consumption works very well to ascertain growth, but that only works in times when wealth is evenly distributed and net personal disposable income on the rise. Many wealthy OECD countries did not experience a rise of disposable incomes, au contraire, since 2005 net incomes are on a decline, in the US as well as Europe. To enforce growth even in those times where your gut feelings tells you to put some savings aside for the bad times, is to invalidate your savings, conveniently enabled by abandoning cash.
Gold as the last resort?
Sorry to tell you that alternate currencies under your control will be illegal, no matter how hard you try. If the government is after your money, government will get it. For centuries, in brisk financial times gold has been the value of choice and has always been on the rise. But beware: Exchanging money for gold when everybody is in search for an alternative to cash is a bad idea as prices are high. Even worse, the gold you accumulate will be the next thing to become illegal as the past has shown that even your gold will not be save.
A word to say and more to read
I do not like this potential, dystopian future. It’s just I personal see no measures of escape but stop consumption involving the exchange of money – which is unlikely to be feasible.
If you are not yet fed up by these claustrophobics you may enjoy reading the 25 hour day!