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.
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.