The End of Cash

Discussion of the Cash portion of the Permanent Portfolio

Moderator: Global Moderator

Post Reply
User avatar
MachineGhost
Executive Member
Executive Member
Posts: 10054
Joined: Sat Nov 12, 2011 9:31 am

The End of Cash

Post by MachineGhost » Wed Jun 03, 2015 8:25 pm

It's all about the "zero lower bound".  Ivory tower economists (such as Krugtron the Invincible) believe that people withdraw and hoard cash at/below 0% interest rates, so they propose to do away with all physical cash and go to electronic currency.  Bingo!  No more bank runs, no more privacy and interest rates can be lowered into the negative indefinitely.  Get ready to bend over for an epic rape...

[quote=https://theweek.com/articles/553432/end-cash]But here's the thing: Even the big banks have become increasingly brazen in their anti-cash agenda. Citi's Willem Buiter, for instance, put the matter plainly: Despite the disruptions and headaches involved, cash should be wiped out, and replaced with purely electronic funds. He's hardly alone; star Harvard economist Ken Rogoff agrees, calling paper currency "unfit for a world of high crime and low inflation."[/quote]
Last edited by MachineGhost on Wed Jun 03, 2015 8:34 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
User avatar
Pointedstick
Executive Member
Executive Member
Posts: 8864
Joined: Tue Apr 17, 2012 9:21 pm
Contact:

Re: The End of Cash

Post by Pointedstick » Wed Jun 03, 2015 8:29 pm

This would drive gold through the roof, I expect.
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
User avatar
Stewardship
Executive Member
Executive Member
Posts: 219
Joined: Mon Mar 10, 2014 6:31 am

Re: The End of Cash

Post by Stewardship » Thu Jun 04, 2015 1:31 am

Pointedstick wrote: This would drive gold through the roof, I expect.
So they would just have slap a tax rate on holdings of gold to make it match the negative returns on cash.  Afterall, gold is also unfit for a world of high crime.

"Don't let them know about your gold," you say?  Okay, what will you buy it with?  What will you buy with it?
Last edited by Stewardship on Thu Jun 04, 2015 1:36 am, edited 1 time in total.
In a world of ever-increasing financial intangibility and government imposition, I tend to expect otherwise.
User avatar
MediumTex
Administrator
Administrator
Posts: 9096
Joined: Sun Apr 25, 2010 11:47 pm
Contact:

Re: The End of Cash

Post by MediumTex » Thu Jun 04, 2015 1:48 am

How much "cash" do any of you actually use?

Most of my transactions involve some kind of payment card.  I don't use paper currency that much anymore.

If you do use cash, do you use it for large purchases?

I think that cash is naturally being phased out, not through coercion, but just through the convenience of payment cards and other electronic transactions.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
barrett
Executive Member
Executive Member
Posts: 1982
Joined: Sat Jan 04, 2014 2:54 pm

Re: The End of Cash

Post by barrett » Thu Jun 04, 2015 7:28 am

MediumTex wrote: How much "cash" do any of you actually use?
Maybe $25,000 a year between me and my wife which I realize is really high. Paying with cash helps us face the fact that what we are buying requires hard-earned money. We use cash for groceries, gas, Wal-mart crap, hardware store stuff, lawn care stuff this time of the year in CT. More and more I use it to pay doctors. We use it for lots of other stuff as well but you get the idea.

I also read in a book somewhere that buying gold coins with cash is a good idea "for added privacy." Not sure if I have the quoted part exactly right.

I wrote somewhere else on this forum that I am surprised Americans can still walk into a bank and cash a check. I expect that right/privilege/window will be gone in less that five years.
User avatar
Bean
Executive Member
Executive Member
Posts: 389
Joined: Mon May 28, 2012 10:30 pm

Re: The End of Cash

Post by Bean » Thu Jun 04, 2015 12:21 pm

MediumTex wrote: How much "cash" do any of you actually use?
1) Lunch at work, but only because they don't take credit
2) Waffle house, just because cash is easier there
3) Cabs
for an overall cash spend of probably ~$2k a year

Outside of those, I carry it for emergencies that I encounter at about a frequency of once a year.  Always different, but am thankful I prepared.

I use credit over debit for the fraud/financial firewall it provides, with the rewards as a perk.  Then pay it off every month.
“Let every man divide his money into three parts, and invest a third in land, a third in business and a third let him keep by him in reserve.� ~Talmud
User avatar
MachineGhost
Executive Member
Executive Member
Posts: 10054
Joined: Sat Nov 12, 2011 9:31 am

Re: The End of Cash

Post by MachineGhost » Thu Jun 04, 2015 1:47 pm

MediumTex wrote: I think that cash is naturally being phased out, not through coercion, but just through the convenience of payment cards and other electronic transactions.
Yes, its only about the currency which is a very, very small part of the broad money supply.  Its also a much bigger problem getting rid of the USD as its the world's reserve currency used globally than it is limiting all cash transactions to $1000 such as in France.  They now search all trains and tourists to confiscate any cash above that threshold.  Now I understand that Europe is a currency user and not an issuer, but when you have Ivory Tower economists jumping on the "kill cash" bandwagon just to implement more of their stupid cockamamie B.S. schemes that never work, it won't be good for anyone.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
User avatar
Tyler
Executive Member
Executive Member
Posts: 2066
Joined: Sat Nov 12, 2011 3:23 pm
Contact:

Re: The End of Cash

Post by Tyler » Thu Jun 04, 2015 4:19 pm

MediumTex wrote: How much "cash" do any of you actually use?
Very little.  But my paper stash would increase substantially with a -6% interest rate that cash-abolishers would like to be able to set.

http://www.bloomberg.com/news/articles/ ... olish-cash
User avatar
Mark Leavy
Executive Member
Executive Member
Posts: 1950
Joined: Thu Mar 01, 2012 10:20 pm
Location: US Citizen, Permanent Traveler

Re: The End of Cash

Post by Mark Leavy » Thu Jun 04, 2015 9:15 pm

MediumTex wrote: How much "cash" do any of you actually use?
About 50% of my annual spending.  Everything that is not housing or transportation (AirBnB and Expedia and Uber and Hertz and gas stations)

Everything else is cash.

Cash just works everywhere.  You can travel the USA and you can travel the world.  Cards are just a headache outside of major metropolitan areas.  Every service worker loves to be paid in cash.  Everybody loves tips in cash.  Any small town diner loves cash.  Any maid/housekeeper loves cash.

Buy a $5 beer, and lay $7 on the table.  Compare the service you get with cash on the barrel head - to running a tab.

I stop and fill up on $100's every time I pass an Indian casino.  (The best ATM's in the world)
It is a bit awkward to pay for a large multi-party dinner in $20's.

Traveling through any 1st and 2nd world country will give you a huge appreciation for cash.  I wouldn't travel without it.  Cards are great.  Until some algorithm can't figure out why you withdrew money in New York yesterday and Koh Samui today - and shuts your account down.  Or the mom and pop in West Virginia gives you a "fuck you" for trying to buy a cup of coffee with a card. Or you unexpectedly hit a toll bridge in the middle of nowhere and don't have an easypass card.  Cash just works.

I always travel with a few week's worth of cash.  In dollars and Euros and Pesos and gold.

MT - you hinted that you were recently in Argentina.  Do you think the underground economy is ready to disappear?

I worry that the real mechanism to eliminating cash is not issuing larger bills.  The US has eliminated the $1000 bill.  $100 is the largest you can use in public.  $20's are becoming increasingly insufficient for more than trivial purchases.  At some point, just due to normal inflation, $100's will become small denomination.  If no larger currencies are issued - then yes, cash will become obsolete.

At some point, whipping out (quantity 500) $100 bills to pay for dinner with your date will just be too weird - and then cash will be gone.

I'm curious how that will work out for the waiters and valets and housekeepers and Vietnamese fish markets.

Will the US start issuing larger currencies - or will something else happen?
User avatar
Stewardship
Executive Member
Executive Member
Posts: 219
Joined: Mon Mar 10, 2014 6:31 am

Re: The End of Cash

Post by Stewardship » Fri Jun 05, 2015 5:18 am

Desert wrote: Here's the contents of the toiletry bag I typically travel with:
Kinda looks like you robbed a 7-11  ;D
In a world of ever-increasing financial intangibility and government imposition, I tend to expect otherwise.
User avatar
Ad Orientem
Executive Member
Executive Member
Posts: 3483
Joined: Sun Aug 14, 2011 2:47 pm
Location: Florida USA
Contact:

Re: The End of Cash

Post by Ad Orientem » Sat Jun 06, 2015 12:03 pm

Desert wrote: Here's the contents of the toiletry bag I typically travel with:

[img width=500]http://chaucat.com/wp-content/uploads/2 ... mage19.jpg[/img]
Hmmm... I'm not sure I've ever seen toothpaste in .38 special before. But I like it.
Trumpism is not a philosophy or a movement. It's a cult.
User avatar
Ad Orientem
Executive Member
Executive Member
Posts: 3483
Joined: Sun Aug 14, 2011 2:47 pm
Location: Florida USA
Contact:

Re: The End of Cash

Post by Ad Orientem » Sat Jun 06, 2015 12:06 pm

MediumTex wrote: How much "cash" do any of you actually use?

Most of my transactions involve some kind of payment card.  I don't use paper currency that much anymore.

If you do use cash, do you use it for large purchases?

I think that cash is naturally being phased out, not through coercion, but just through the convenience of payment cards and other electronic transactions.
With some common sense exceptions (very large purchases) I try to use cash as much as possible. I am sick of everybody knowing what I am doing with my money. And I know that I am pissing off an untold number of people in the Treasury Department with my cash withdrawals from the bank.
Trumpism is not a philosophy or a movement. It's a cult.
barrett
Executive Member
Executive Member
Posts: 1982
Joined: Sat Jan 04, 2014 2:54 pm

Re: The End of Cash

Post by barrett » Sat Jun 06, 2015 1:25 pm

Desert wrote: Do you feel bad about missing the cash back you'd get from a CC, or do you find ~2% a small price to pay for the privacy?
I know this question wasn't asked of me directly but as a big fan of cash, yes, I find missing out on that 2% to be a small price to pay.
User avatar
dualstow
Executive Member
Executive Member
Posts: 14232
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: The End of Cash

Post by dualstow » Sat Jun 06, 2015 3:14 pm

MediumTex wrote: How much "cash" do any of you actually use?
A. Farmer's markets
B. Pizza night w/ two friends. Two of us decided that using cash to just pay what we owe is cheaper than a 3-way split for unequal orders every week, cash-back credit cards notwithstanding.  ;)

That's about it, except some checkwriting and direct debits where a credit card is not accepted.
Sam Bankman-Fried sentenced to 25 years
User avatar
Ad Orientem
Executive Member
Executive Member
Posts: 3483
Joined: Sun Aug 14, 2011 2:47 pm
Location: Florida USA
Contact:

Re: The End of Cash

Post by Ad Orientem » Sun Jun 07, 2015 10:00 am

Desert wrote:
Ad Orientem wrote:
MediumTex wrote: How much "cash" do any of you actually use?

Most of my transactions involve some kind of payment card.  I don't use paper currency that much anymore.

If you do use cash, do you use it for large purchases?

I think that cash is naturally being phased out, not through coercion, but just through the convenience of payment cards and other electronic transactions.
With some common sense exceptions (very large purchases) I try to use cash as much as possible. I am sick of everybody knowing what I am doing with my money. And I know that I am pissing off an untold number of people in the Treasury Department with my cash withdrawals from the bank.
Do you feel bad about missing the cash back you'd get from a CC, or do you find ~2% a small price to pay for the privacy?
Definitely a small price.
Trumpism is not a philosophy or a movement. It's a cult.
User avatar
MachineGhost
Executive Member
Executive Member
Posts: 10054
Joined: Sat Nov 12, 2011 9:31 am

Re: The End of Cash

Post by MachineGhost » Sun Jun 07, 2015 11:30 am

Ad Orientem wrote: Definitely a small price.
If you're not engaged in potentially criminal activities, what are you so afraid of?  There's a point of being TOO paranoid.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
User avatar
Ad Orientem
Executive Member
Executive Member
Posts: 3483
Joined: Sun Aug 14, 2011 2:47 pm
Location: Florida USA
Contact:

Re: The End of Cash

Post by Ad Orientem » Mon Jun 08, 2015 10:03 am

MachineGhost wrote:
Ad Orientem wrote: Definitely a small price.
If you're not engaged in potentially criminal activities, what are you so afraid of?  There's a point of being TOO paranoid.
It's not a question of paranoia. It's the principal. The government is doing all kinds of things it should not be doing because no one is willing to say "No, you can't do that" to them. What I do with my money is nobody elses damned business.
Trumpism is not a philosophy or a movement. It's a cult.
barrett
Executive Member
Executive Member
Posts: 1982
Joined: Sat Jan 04, 2014 2:54 pm

Re: The End of Cash

Post by barrett » Mon Jun 08, 2015 11:09 am

Ad Orientem wrote: The government is doing all kinds of things it should not be doing because no one is willing to say "No, you can't do that" to them.
Also, is the US Dollar legal tender or is it not?

Legal tender is by definition "coins or banknotes that must be accepted if offered in payment of a debt." Can I walk into an airport and buy a plane ticket with cash? What about paying for a hotel room? Maybe they'll accept it on check out but you can't check in without a credit card and, in most cases, a driver's license. I can't rent a car with cash. The list goes on.

To me this is the kind of authority creep (my term) Harry Browne was talking about immediately post 9/11 when he warned that steps the government takes in an emergency have a way of never being rescinded.
Post Reply