In response to an FT article by Ben McLannahan on 7th February 2016, entitled 'Eliminating the big bucks to cut crime'
Two in one day! More in store throughout the week...The FT state control sale...
My reaction is the same as August last year in response to one of the FT's earlier 'trial balloons:
Negative interest rates encourage people to move to cash - why pay a bank for the privilege of lending them money? We are not there yet, but there will be a point where sentiment shifts dramatically, and the ‘herd’ will shift to cash - governments fear this - and that's what this is really about. It happened in Greece where people took their cash out of banks and stored it outside the system
So...increasingly the idea of a cashless society is being floated by various US states and in Europe, notably Denmark. Transactions in cash are being regulated and limited in France
We should expect to read an increasing number of government announcements and articles where cash is demonised and 'blamed' for issues such as drug dealing, money laundering, funding terrorism, tax evasion, wicked landlords, rich people paying peanuts to part-time employees, minimum wage evasion, wicked X taking advantage of poor Y etc. Also, we can expect to see an increase in derogatory terminology such as ‘hoarding’ and ‘rentier’.
This poses a question - do I want to live in an electronically controlled, cashless society where the government can effectively a) 'force' me to spend by taxing any unspent deposits, b) bail me in, in the 'national interest' of course, anytime they please c) regulate all my transactions...bearing in mind that governments take power, they don't give it back
I expect the media to increasingly play along with this statist control-freakery. This article is an example of that. The ‘bad’ uses for cash mentioned here maybe real, albeit exaggerated - but they are not the real reason. The real reason is this - the only way governments can keep the credit bubbles from bursting is through taking ever increasing control of the economy, and by default therefore, our private lives. This is much worse than a 'nanny state', It will lead to abuse of power.