Cookies

Notice: This website may or may not use or set cookies used by Google Ad-sense or other third party companies. If you do not wish to have cookies downloaded to your computer, please disable cookie use in your browser. Thank You.
Showing posts with label big government financial control. Show all posts
Showing posts with label big government financial control. Show all posts

Thursday, April 18, 2013

How Will a Cashless Society Affect Survivalists?

This is part of an article entitled "Winds Of Digital Change" by Bob Rinear, that was sent to me by a retired investment banker who is now an avowed prepper moving from the North to establish a home in Northern Arizona awaiting what he believes is the economic collapse of America. I am posting this to stimulate thought on how a cashless society can effect our ability to prepare to survive. I'm not too worried about having digital money after a economical or financial collapse as digital money will give way to barter or dealing in preciuous metals - hence the need to own physical gold and silver - but the longer we live in a cashless society, the greater of an impact, a negative impact, it will have on our preparations.

 There's absolutely no doubt that at some point in the future, they are going to abandon the idea of "cash" and all transactions will be done with a swipe.

Consider "money" for a while. It has been around in one form or another for thousands of years. When the first coinage was used to "buy" goods instead of using the barter system, there's no doubt that several things happened. One is that it became stupendously easier to get what you wanted or needed. But by association it creates a massive boom in "business". For instance let us suppose you were the farmer and you had hundreds of cows and steer. Well you might want to get a pair of pants or some boots. But the shoemaker didn't want a milk cow or a steer. So you guys couldn't do a lot of business and your feet still hurt. Once the concept of using coins (lets just say currency) really took hold, you could buy your pants and boots from the Shoe maker, and the house builder could "buy" your cows and meats. The velocity of business increased exponentially. Expanding that, all forms of increasing "good" took place.

People could "buy" books and pay tuition to schools. They could easily pay for musicians to play for their parties, etc. Education exploded, the arts became more widely accepted.

Money was a darned good thing.

Then of course there came a time when they figured out that carrying gold around was a bit of a pain, and the first concepts of "currency based on gold" was issued. This was the first good stabs at "currency". The idea being you'd use a slip of paper with a number on it as your vehicle to buy something. The paper "note" would correspond to an amount of gold you could exchange the note for if you wished. While many credit the Europeans for coming up with this and to some extent they were very important as to it's ultimate adoption, the Chinese began the practice 2000 years ago.

The Song Dynasty in China was the first to issue paper money, called "jiaozi", around the 10th century AD. Although the notes were valued at a certain exchange rate for gold, silver, or silk, conversion was never allowed in practice. Then, the successive Yuan Dynasty tried again and was the first dynasty in China to use paper currency as the predominant circulating medium. The founder of the Yuan Dynasty, Kublai Khan, issued paper money known as Chao in his reign. The original notes during the Yuan Dynasty were restricted in both area and duration as in the Song Dynasty. (notice that even today most will call the Chinese currency the "yuan" instead of the Renminbi which is its actual official name).

Of course you all know that here in the states President Nixon closed the "gold window" which basically severed our currency from any backing what so ever. We became "fiat" meaning that our currency was only backed by Uncle Sam saying it has value. It couldn't be exchanged at the banks for gold any more. Since that time, we've seen all manner of things happen, just as they have in the past. They PRINTED ever more gobs of the stuff. Well guess what? We've seen all that before. All of it.

The Romans printed money, the Greeks, the Argentineans, the Germans, you name it. All through history they have printed more money than they had "metal" (gold or silver) to back it and it always ended badly. It has only been in the past 45 years that we've embarked on what amounts to a completely "fiat" global situation. No one's money is backed by anything any more. This is new.

We have to ask the question, what happens when they push us into a completely digital cash-less society? We know that when we went from barter to "money" our societies saw a massive increase in activity. We know that when we went to a "currency backed by money" system the entire world experienced the biggest growth spurt the planet had ever seen. But in the last 40 years we've gone to a "currency backed by nothing" system and we're seeing that groan and creak because of the abuses of printing too much of it. Not to mention the downsides of theft, extortion, illegal activity, etc. It is a failure, and they know it. The system will be revamped.

So consider this. At "some" point, even if the so-called currency of the future is indeed backed by some percentage of gold, there will be NO PAPER MONEY. Every transaction will be a card swipe, a smart phone pass, etc.

So there it is folks. At some point in our not too distant future, the idea of "cash" will be tossed in the garbage bin. Everything you do will be recorded digitally. Now we have to try and figure out just how that affects us. For some the effects will be quite large. Consider the drug dealer. He plies his trade in the dark and uses cash. Well if there's no cash in our system, how does he get paid? Consider all the "under the table" folks. You know, the guy that cuts ten of his neighbors lawns each weekend for 30 bucks cash. How does he get paid now? If it is all digital, there's a trail, a completely unbroken trail. He can't hide that from the IRS any more.

Consider anything you buy. Did you think you'd be slick when you were cheating on your spouse by buying him/her gifts with cash? No longer, now the wife would be able to find those "charges". In fact, if Uncle Sam is dead set on knowing every single thing about you, then a cash less society is his orgasmic fantasy. But what I want to know is this... what is the resultant effect on the economy? Will sales rise because you can swipe faster than you can trade cash and wait for change? Will jobs be created because it will no longer benefit someone to hire someone else "under the table", or will the percentage of poor explode because those folks will not be utilized anymore?

As much as a cash society is flush with the ability for abuse, how does one measure the "good" that hidden transactions represent? I have found no logical way to explore it to be honest with you. But I know that there have been times in my life where I've "lent" some money to someone, where it bailed them out of a tough jam, and it would have been disaster if they had to let others know they "needed" the funding.

There's been other times where just handing my table waitress an extra tip, brought us service above and beyond the normal. What is the ancillary effect of moving cash around that isn't attached to a digital string? How does one give their kids an allowance, or pay the neighbor kid for shoveling your driveway? How many businesses were built in America by someone with dogged determination starting out by going door to door selling cookies or shoveling snow? Would all those kids be forever pushed out of the budding entrepreneurial pool?

How big is the Bureaucracy going to be that tries to watch over all that digital snow? Who's the Government troll that will dissect all the digital payments you make? Is not Government intervention in our lives at a level we already see as abusive? Then we have the security side of it all. What happens when there's the "glitch" like we've seen lately, where you log in and your bank account shows "0" in it? You can't even buy a gallon of milk until you get that account fixed, how long does that take? Then consider the implications for "them" to completely stop you in your tracks. If cash is not accepted for any good or service, the Government can absolutely crush you simply by shutting off your "digital account". Think about it deeply folks because the implications for abuse boggle the mind.

I have thought a lot about this over the past few months as I see more and more digital card readers pop up in every area of our lives. You see commercials for readers you pop onto your phone so you can swipe cards wherever you are. You saw the beginning of it when years ago McDonalds put card readers in their outlets. Now it's Starbucks and virtually every convenience store. The march towards a completely digital world is marching forward and picking up steam. Just 40 years ago the concept would have been science fiction. Today it is not only reality, it is roaring forward.

From where I sit, it is my opinion that right now all of this digital money is being seen as a benefit. That is because it "supplements" the status quo, it "adds" to your ability to do business. But, once the hammer falls and it is "law", I see a much different picture. I see disruptions in so many areas, that the "net net" of it all is very negative. It is the ultimate "big brother" eye in the sky. With that in mind, it "has" to stifle economic activity.

Let me leave you with this thought. Imagine a major drug dealer in say Miami. While selling drugs is clearly illegal, and many people are hurt by it (the drug user, turf wars, etc.) the fact is that the millions made by the dealer and his gang is spent. Homes are built, cars are sold, pools installed, travel booked, etc. Despite the creation of the cash being illegal, the resultant spending of the cash is "good" for the economy. A digital society could put the dealer out of business, which is good. But the businesses that would have benefitted from that dealer spending his illegal gains is hurt, which is bad.

Which one will end up having more societal impact? It is a troubling question.

Governments are broke and they're on a wild hunt for tax income and tracing money is their game. Digital money makes it easy. Just this week we see news that the IRS is allowed to read personal emails. We saw news stating that they inspect Facebook and twitter for hints that you might have more money than you're stating. Digital dollars is their golden goose and thus it will be implemented. We all have to understand that, and decide what it means to each of us. I can't tell you the day, but there's no doubt in my mind that it will happen in the next ten years. A long time you say? Nope, just the blink of an eye, ask my great grand mom, she'll tell you.