The Cashless Society Is Going to Backfire for the Establishment

By Joshua Krause

There is nothing the banks would love more than to ban paper currency, though not for the same reason most gold bugs might like to do the same. If there were no cash, then the banks would have absolute control over our savings, and we would all have to keep our money “in the system.” Governments would probably enjoy this as well. It would make it so much easier for them to track our purchases and profits, and tax them accordingly.

The desires of the banking cartel became perfectly clear two weeks ago when Willem Buiter, the chief economist for Citigroup, advocated banning cash to supposedly save the global economy.

The world’s central banks have a problem.

When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut — they can bring interest rates to zero, but reducing them further below that is fraught with problems, the biggest of which is cash in the economy.

In a new piece, Citi’s Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates.

Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction?

Cash therefore gives people an easy and effective way of avoiding negative nominal rates.

So basically what he’s suggesting is that by eliminating cash, it will make it easier for the banks to take your money. Right now it’s difficult for them to enforce a negative interest rate (which would ostensibly fuel the economy by making people spend money instead of saving it) because people will just take the cash out of their accounts. You can’t place a negative interest rate on money that’s hiding under your mattress.

They really just want to make it expensive for you to save money. They want you to spend it all on frivolous crap (to keep the global economic bubble going), which means that at some point it will return to the banking system, where they will be able to charge you even more than they already do, just for the privilege of keeping it there. Rinse and repeat until we’re all debt slaves.

However, these bankers really haven’t thought this through. They probably believe that a cashless society will work, because of success stories like Sweden, where four out of five purchases are done electronically. What they’re not taking into account is that Sweden has a successful economy despite going cashless, not because of it. They have a cohesive society with low crime rates, good schools, and an excellent infrastructure. They would have been successful either way.

But if they try going cashless in some basket case nation, they’re in for a rude awakening. I can already tell you what would happen in America. Unlike Sweden, it’s not going to stifle the black market, which is the biggest reason why governments want to go cashless.

It’s going to strengthen it.

The black market in the United States is a multibillion dollar economy. It’s been estimated that our black market may comprise at least 10 percent of our GDP. That’s a force to be reckoned with. That’s larger than the economies of most nations and corporations, and it consists of everything from drug cartels to babysitters. Do they really think that this powerful force will stand idly by as their wealth is forced into the light of day by an edict?

Eliminating cash won’t remove the desire to save money, and people who work in the black market already don’t like to deal with banks. This will only serve to push them even further away from the legitimate economy. Instead of cash, they will just find new ways to preserve their wealth.

In the years that followed the crash of 2008, what did fearful Americans buy to preserve their wealth? They bought everything the government doesn’t want us to own. Gold, silver, guns, storable food, cryptocurrencies, etc. These all went up in value. If this comes to pass, members of the black market will just put their money in real-world commodities and untraceable currencies, because there will be no other options if they want to stay away from the prying eyes of corporations and governments.

And unlike cash, which will occasionally find its way back into the banking system since people still need to write checks for their gas, electric, insurance, and water bills; many of these resources will never see the light of day again.

They should also consider what will happen if every single transaction causes you to lose money. If just having money means losing money. This will make it profitable for the black market to reach into every facet of the economy. Think prohibition, but applied to buying groceries and paying your rent. Everything that can be done informally, will be. This will, in time, pave the way for an economy that is separate from the one we currently operate in. It will create a viable alternative to the system we’ve been forced to endure.

Perhaps, this is difficult for us imagine because we’ve never experienced it. But in most cases the black market always finds a way, because the black market goes by another name: the free market. And the free market can’t be stifled in the long run. It will always produce an alternative to any law or regulation.

Money has become intrinsically connected to everything we want, need, and do, so by removing cash and creative negative interest rates, they’re placing a tax on every day life. And if the black market does what the black market does best, it will create an underground alternative to everything we want and need. And I mean everything.

The same situation occurred in the final days of the Soviet Union. Their dysfunctional system produced one of the most virulent and extensive black markets in history, and one could find just about any product or service there. There’s no reason why it can’t happen here. If they succeed in eliminating cash, their system will fade while the black market thrives. They’re too stupid and hubristic to realize that they’re fueling alternatives to their vision of the world, and sealing their own doom.

Joshua Krause is a reporter, writer and researcher at The Daily Sheeple, where this article first appeared. He was born and raised in the Bay Area and is a freelance writer and author. You can follow Joshua’s reports at Facebook or on his personal Twitter. Joshua’s website is Strange Danger.

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20 Comments on "The Cashless Society Is Going to Backfire for the Establishment"

  1. The criminal government thugs can, of course, make life miserable for the people they catch trying to run their own lives rather than submitting to government tyranny. So yes, the black market will thrive, but it won’t be a terribly fun time to be alive.

  2. I’ve stopped using credit cards and the like whenever possible. If it’s possible to use cash, I use cash. Just ‘voting’ with my wallet.

    • emmanuelozon | April 22, 2015 at 7:38 am | Reply

      Cut mine up in 1985, haven’t used any credit since then. If I don’t have the cash, I don’t buy it.

    • The state of Louisiana has just passed a law outlawing the use of cash for purchase of used good (this includes yard sales, automobiles, etc.). The process has already begun in the U.S. As soon as Republicans see the potential, other states will outlaw the usage of cash, too.

      • William Burke | April 22, 2015 at 7:11 pm | Reply

        I believe this actually happened almost three years ago; you saw the same article today that I did, didn’t you? It’s true, up to the extent that it’s really old news.

        But at least you and others found out about it!

  3. It sems Joshua has never heard of Wörgl, a village in Austria.

    Who knows Wörgl nowadays? Yet for a short period of time the entire world looked at this small town. In 1932/3, one of the most successful economic experiments was conducted here that is still referred to when fairer forms of money are contemplated.

  4. Frances McCandless | April 22, 2015 at 3:27 pm | Reply

    What I find interesting was the comment by the Citi Bank exec who said cash was destroying the economy. I guess they won’t be happy unless they can track a statistic on every human beings’ shopping habits and steal more money than they already have. Just a thought.

    • It’s funny that these bank executives blame cash for destroying the economy because the problem is not the cash. The problem is them.

  5. marcosanthonytoledo | April 22, 2015 at 6:15 pm | Reply

    Even the Mafia have more brains and are true capitalist. This jerks live on fantasy island they have never any idea of how the universe works. Since they don’t have to itemize what they can buy super junkies have no idea how anything works they never thought only dream and confuse the two.

  6. Chart Wizard | April 22, 2015 at 6:17 pm | Reply

    It’s no mistake Janet Yellen said, not too long ago, that cash is not a safe store of value — or something like that. There is a coordinated attempt to either do away with cash (which will be very hard to enforce) or demonize gullible people who would otherwise “hoard” cash, in other words save it.

  7. XrayVision56 | April 22, 2015 at 9:05 pm | Reply

    What would we all do in a major power outage when all the ATM machines are out – This could be for long periods and we wouldn’t be able to purchase the basics. Also need cash for “car boot” and “garage sales”.

  8. XrayVision56 | April 22, 2015 at 9:17 pm | Reply

    No store/retailer would be able to process your plastic if the power went out for days or even weeks in the instance of a major catastrophic event which is becoming a more possible outcome in this day and age. “Everyone” accepts cash. I don’t think the general populations would stand for “cashless”, even though the central controllers would love it. The people would go to the streets – Really, it is far from practical in society at this point in time.

  9. You don’t understand. It is NOT about cash, it is about control. They want TOTAL control of all humanity. They want us all totally dependent on the system that way they can totally enslave us! They don’t care about “failures” – they WANT them! They set up the system to fail! They use them as an excuse to bring even GREATER control. (Secretly create the) Problem – (manipulate the ) Reaction – (so you can impose your) Solution (which will make things even worse to have your even bigger Problem and repeat). A downward cycle.

  10. If they ban the use of cash, that ban would have to be 100%, any less than that, and they leave in place a tool to measure the value of the credit in use, a means by which credit can and would be discounted. To give you an idea of that potential discount; if we were to properly value the ‘credit dollar’ against the current unit/money of account, the legal tender FRN, the true value of the bankster’s ‘credit dollar’ would be around $0.04 in legal tender.

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