Cashing out

The powers that be are doing all they can to constrain the options of the average citizen who refuses to play their game.  The latest angle is to renew the push for a cashless society:

On Monday the European Central Bank President emphatically disclosed that he is strongly considering phasing out the 500 euro note.

Yesterday, former US Treasury Secretary Larry Summers published an op-ed in the Washington Post about getting rid of the $100 bill.

Prominent economists and banks have joined the refrain and called for an end to cash in recent months.

The reasoning is almost always the same: cash is something that only criminals, terrorists, and tax cheats use.

In his op-ed, Summers refers to a new Harvard research paper entitled: “Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes”.

That title pretty much sums up the conventional thinking. And the paper goes on to propose abolishing, among others, 500 euro and $100 bills.

The authors claim that “without being able to use high denomination notes, those engaged in illicit activities – the ‘bad guys’ of our title – would face higher costs and greater risks of detection. Eliminating high denomination notes would disrupt their ‘business models’.”

The $100 is a “high denomination note?”  That might have been true 50 years ago, minus several decades of inflation eating away at purchasing power, but it’s hardly the case today.  One can easily spend that much now by taking a family of four to a restaurant.

And while any such proposals are always couched as trying to somehow make life difficult for “the bad guys,” there are some very real effects on law-abiding citizens here.  Governments around the world have exhausted their ability to “goose” the economy through artificially low interest rates (a policy, by the way, that penalizes the thrifty savers in society in favor of profligate borrowers).  Having taken that game all the way to zero — literally — now central banks have the bright idea of negative interest rates… which would potentially charge savers who hold their money in savings accounts rather than spending it.

So what is a thrifty family to do?  The best answer is to hold as much of your assets as possible outside of the increasingly corrupted financial system.  Cash is the most obvious way to do that.  But bankers know full well that if Americans returned to the days of stuffing mattresses with greenbacks, it would quickly become apparent there aren’t enough pieces of paper to go around — not by a long shot.  (For an example of this, watch the “bank run” scene in “It’s A Wonderful Life.”)

In addition to discouraging all the hoi polloi from asking for banknotes they don’t have, this move toward smaller denomination bills is meant to inconvenience cash transactions.  It’s not only criminals who like to use cash, although many in authority like to pretend that’s the main association.  There is still the rare family who literally saves their pennies for anything from a vacation to buying a used car.

Here’s the thing: if you paid $10,000 in cash for a vehicle you bought used from another owner, it would take carrying one hundred $100 bills.  Imagine that bill is eliminated.  The $50 is already a much rarer note in circulation, so the common alternative is the $20.  Now you’d need a stack of FIVE HUNDRED notes–more than a pound of paper –to pay cash.  And few people are willing to do that these days.  Yes, this is part of what the authorities want to do to “inconvenience” large criminal transactions.  But it will also push average consumers further into using what is already a largely digital world of commerce.

And that’s exactly what the powers that be want.  With digital transactions (credit and debit cards), privacy is greatly reduced and control greatly expanded.  I know there are still those full-blooded law and order types who’ll protest “if you’re not doing anything wrong, you have nothing to worry about.”

Baloney.  Plenty of innocent people have already had their bank account (vulnerable digital assets) wrongfully seized, after which they face a daunting process of proving their innocence in order to see any of it again.  But the real problem with the “you have nothing to worry about” premise is that the definition of “doing wrong” is often in the eye of those wielding any kind of power.  Think I’m kidding?  Ask the former head of Mozilla, who was forced to resign after those oh-so-tolerant liberals discovered his heinous crime of donating to a campaign against legalizing same-sex marriage.  Think about how the IRS went after political groups sympathetic to “Tea Party” small-government advocacy.  Now extrapolate that to a future where every book you buy, every movie/documentary you watch, every church contribution you make and even families you choose to support financially in some small way leaves a digital trail for those who disagree with you to follow and exploit.

There’s a term for this: it’s called a targeting system.  And if we’ve learned anything through the recent weaponization of government agencies, it’s that such targeting capabilities WILL be used to harass and silence anyone who dissents from public orthodoxy.  Completely ‘virtual’ banking and finance (a “cashless society”) will result in ‘virtual control’ over our ability to live freely and privately with our own consciences.

I’ve said this before, but am becoming more strident about it: it’s time to “abjure the realm.”  If you disagree with the direction the ‘soft fascists’ in our land are taking us, you need to separate yourself from their system as much as possible, because the net is continuing to tighten.  That means holding stores of wealth beyond their digital control, in forms like cash, precious metals or other tradable commodities that provide a good store of value.  Equally important, it means building networks of like-minded people who are willing to form communities that can exchange privately among themselves without every transaction being officially recorded and perused for potential political heresy.

In short, it means declaring your personal independence and intention NOT to be simply a compliant serf to the ruling order.  Does it take work not to do things the way everyone else does?  Certainly.  But it is the kind of work that makes one free.

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