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War on cash

A former head of the UK’s Standard Charter bank proposes that the war on cash be ratcheted up. ln a paper published Sunday, Peter Sands demonized large banknotes, saying they are “king among terrorists, drug lords and tax cheats.” According to him, Illicit money flows are estimated to run up to $2 trillion a year.

currency collage

In his call for the removal of the ECB’s €500 note, the Fed’s $100 bill and the BoE’s £50 note, Sands says that these paper monies are “rarely found in the average consumer’s wallet in today’s world of easy digital payments and bank cards.”

Sands ignores the rampant crime of credit card and debit card thefts, which in most cases burden the card holders, not the banks. I know it’s antidotal, but a friend recently wrapped her credit cards in aluminum foil and started carrying cash after experiencing harrowing attempts of the theft of her credit cards and debit card.

Sands does not mention the privacy that cash provides ordinary people who only want their purchases not be recorded on some bank’s computer–not to mention the NSA’s computers located outside Salt Lake City, UT.

It is unlikely that the $100 bill will be discontinued, for a number of reasons. First–and foremost–it is the bill that the Pentagon and the CIA delivers on pallets to bribe supposed allies for covert operations throughout Africa and the Middle East. If $20 bills were used, five times the volume of bills would have to be delivered, and when they’re delivering tens of millions of dollars that would be significant.

Another reason the $100 bill will not be discontinued: despite what the government says, inflation is a real problem in the US. While McDonald’s does not accept $100 bills, it is difficult to get out of an upscale restaurant without laying a two or three Bennies on the table.

Recently, a friend laughed about paying for food and drinks in a Telluride, CO restaurant. The waiter, who had become friendly with the party, picked up the Bennies, smiled and said, “Oh, Telluride tens.” In Telluride, $100 bills flow in abundance, as they do across the US.

In a draconian move, the Treasury could cut back on the production of $100 bills but certainly not call them in. The Treasury has never called in a currency and discontinued its use. If $100 bills were no longer printed, the Bureau of Engraving and Printing would have to turn out five times the number of bills in $20s to replace them.

There is a war on cash, but it is led mostly by banks who would like to reduce the use of cash so that they can generate more profits via their digital operations. Already, businesses who deposit cash are charged for the extra handling, but cash is not going away for the two reasons mentioned above and because too many poor people do not have access to credit and debit cards.

3 Responses to “War on cash”

  1. RK in TX

    For those who haven’t already seen the recent related news, former US Treasury Secretary (also Harvard professor) Larry Summers has now joined Peter Sands in supporting this terrible idea. See:
    You know, it’s already bad enough that for a very long time, cash has been disconnected from precious metals, thereby allowing the government to interfere with, and abuse, otherwise free commerce. What’s worse is that the government now is no longer satisfied with its existing tools for such abuse and control. Now, our fearless leaders seek to establish (and always, for our own good, mind you!) their complete and total control of the value of the currency, along with 100% tracking of every transaction in the economy, no matter how small such transactions may be. I think it is safe to say that if Sands and Summers succeed in what they envision, this will not end well. Bill, I sure hope you are correct that they will fail!


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