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Is Sweden Ready to Abolish…Cash?

Is Sweden Ready to Abolish…Cash?

Cash is a form of liberty, isn’t it?

Is this the wave of the future?:

Central bank policymakers had believed they had run out of room to support their respective economies, with their interest rates held close to the floor.

…Cut rates too deeply, [they thought], and savers would end up facing negative returns. In that case, this could encourage people to take their savings out of the bank and hoard them in cash…

[But as] central bank rates have turned negative, the rates offered on bank deposits have followed. Yet rather than stuffing cash under mattresses, people have left their money in the bank or spent it.

This is already happening in Sweden.

One of my first thoughts on reading that people are not pulling their money out of the banks was that perhaps the Swedes are just used to the habit of banking and don’t quite know where else to put their money. After all, a few hundred thousand kronor would be hard to stuff under a mattress, and perhaps anxiety-provoking. And it is true that Sweden already has a very high savings rate.

But wait; it actually may become worse. Some folks in charge have gotten the bright idea of giving people no alternative to banking it or investing it:

One solution is to give savers nowhere else to go. This idea was floated by the Bank of England’s chief economist in recent weeks, who made the case that sub-zero rates will be needed in the near future.

Andy Haldane, a member of the Monetary Policy Committee (MPC), the UK’s equivalent of the FOMC suggested that to achieve properly negative rates, the abolition of cash itself might be necessary.

Apparently, that’s one reason why the negative interest policy has been successful in Sweden, which is reported to already be practically cashless. If people aren’t used to cash anymore, they may be willing to pay to avoid using it. Of course, cash has the advantage of usually being untraceable, and people may come to value that aspect of it.

The planners aren’t going to boil that cash frog all at once, though. They’ll do it slowly, carefully:

No politician is likely to prohibit cash entirely, at least not until it has already all but disappeared from day to day life. Concerns about surveillance and the power of the state are likely to grow, as electronic money is completely traceable.

“Cash is useful for small transactions, and until it disappears naturally, I would be loathe to say let’s outlaw it,” says Sir Charles.

“Sir Charles” is Sir Charles Bean, former deputy governor at the Bank of England. One of the first steps will be to outlaw large-denomination notes, which are often used in drug transactions.

If you think about it, cash is a form of liberty, isn’t it?

[Neo-neocon is a writer with degrees in law and family therapy, who blogs at neo-neocon.]


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This makes sense once we truly appreciate the “governments at all levels are in charge” ganda the UN has embarked on called Vision 2030. Making the law a tool to subordinate the individual against their wishes if they are paying attention is another aspect as is the push away from cash that obscures trackability. covers the same agenda via its educational components and includes links to a number of UN and other reports touting how Data can drive a restructuring of people along with our political, social, and economic structures.

Targeting cash is just a means of trying to ensure there is No Way Out. The way out is to recognize this full agenda.

    mrtomsr in reply to Robin. | October 1, 2015 at 10:39 am

    Civil forfeiture of cash seems to be an increasing trend. After all, it is very difficult to prove your cash isn’t guilty of a crime.


    Sammy Finkelman in reply to oldyannkee46. | October 1, 2015 at 10:32 am

    Gold and silver is not money.

    Gold and silver are things bought and sold with money.

    Dollars and Euros are money.

    And when it comes to an exchange of Dollars and Euros, the Dollars are the money and the Euros are the goods.

      Sammy Finkelman in reply to Sammy Finkelman. | October 1, 2015 at 10:39 am

      And from the time of the early Roman Empire, gold and silver wasn’t money, either.

      Coins were money.

      And it was possible to debase the currency. This accelerated after the time of Septimus Severus or so, in the 200s.

      It is not possible to debase the coinage unless coins, and not gold or silver, are money.

      Before standard coinage, before 550 BCE or so, gold and silver, especially silver, was money, and money used to weighed and checked. There were maybe standard trusted weights but they had to be checked.

Sammy Finkelman | October 1, 2015 at 10:30 am

If you get rid of high denomination notes – anything above a $10 bill maybe – you could tax many kinds of transactions and abolish the income tax, espoecially if you also taxesd large cash sales (over $1,000?)

I don’t think people can be forced to use things that record transactions by name. There can be substitutes for cash, including store rebates, tokens, etc. If they were useful, and not outlawed, people would find things, even if the government did not print money.

I think another factor in Sweden could be that people need a lot of money in banks for convenience and because there is more fear of the money being lost or stolen if held in cash than of losing anything as a result of keeping it in the bank.

In Africa people typically pay banks to hold money, and the original banking actually started that way. And today in the United States numerous people have checking accounts for which they pay a fee, or use more expensive money orders and check cashing places. And businesses probably want a third-party record that money was paid or not paid.

The negative interest rates or fee would probably have to be pretty high to motivate people to use cash instead.

Bitcoin or other crypto-currencies?

    Ragspierre in reply to Amy in FL. | October 1, 2015 at 11:17 am

    Nope. I think not. Bitcoin is WAY vulnerable to subpoenas of its records.

    Also, consider how useful your Bitcoin account is when there’s no power for days. One of the things you need for your hurricane kit is some cash.

      MouseTheLuckyDog in reply to Ragspierre. | October 1, 2015 at 12:37 pm

      Subpeona? Every transaction involving a bitcoin is recorded in it’s blockchain. A sufficiently determined person can figure out who used any bitcoin. As the users of the Silk Road are now discovering to their detriment.

“If you think about it, cash is a form of liberty, isn’t it?”

Well, kinda sorta…yes and no.

The use of fiat money (currency in our discussion) is one of the most accepted and universal of all the fictions we, as a people, have adopted. It works. And it works MOSTLY because, over time, we’ve been able to trust our government. It’s the government that issues the “fiat”; currency can be used as a legal form of exchange. In fact, if tendered, it HAS to be accepted (short of a few contractual exceptions).

In terms of liberty, at present we can use currency to purchase anything anyone wants to sell, and the exchange is much less prone to snooping.

But IF the government wanted to take currency out of the hands of the people entirely, they’d have a few problems with the Constitution here in the U.S.

They’d also find that states and even groups of individuals would very quickly adapt to provide substitutes. When you have something with the universal utility of currency, you will have people finding innovative and inventive ways to wire around prohibitions.

    MouseTheLuckyDog in reply to Ragspierre. | October 1, 2015 at 1:07 pm

    the government that issues the “fiat”;
    No. It’s banks that issue money. In the ccase of fiat it is government sponsored banks which are generally owned by the government in indirect ways.

      Ragspierre in reply to MouseTheLuckyDog. | October 1, 2015 at 2:22 pm

      Poor Mouse.

      The “fiat” is the declaration by the Federal government that its currency is legal tender.

      Look. It. Up.

        Milhouse in reply to Ragspierre. | October 1, 2015 at 5:26 pm

        I think perhaps some people have forgotten what the word “fiat” means.

        A tiny quibble: legal tender doesn’t mean you have to accept it. You can refuse to deal with someone who offers cash. What it means is that if someone owes you money and offers you cash in payment, and you refuse, they don’t owe you the money any more, and you can’t sue them for it. It’s your cash, and if you leave it lying on the table and someone takes it, that’s your problem. Whereas if they offer you gold and you walk away, they still owe you the money, and you can still sue them for it, unless your contract specifically says otherwise.

          MouseTheLuckyDog in reply to Milhouse. | October 1, 2015 at 5:52 pm

          Hmm. The legal tender part explains somethings. Like some who like to pay their taxes in cash. Does that mean that if you give the IRS cash and they refuse it you no longer owe the taxes?

          Ragspierre in reply to Milhouse. | October 1, 2015 at 6:40 pm

          Poor obdurate Mouse.

          Ever hear of the IRS REFUSING cash?

          You didn’t look up the term “fiat” in this connection, did you?

          It’s OK. You can keep on being ignorant. Always your choice!

          MouseTheLuckyDog in reply to Milhouse. | October 1, 2015 at 11:34 pm

          Hmm. The legal tender part explains somethings. Like some who like to pay their taxes in cash.
          Since I wrote that in a hurry. I should clarify what I meant. I’m referring ( of course ), to the tax protesters who try to pay the IRS in one dollar bills, and other goofy stuff like that [1]. Typically there arguments seem to be that the IRS has to take it because it is legal tender.

          [1] What does it do except ruin the day of some poor clerk who never did anything to you.

        MouseTheLuckyDog in reply to Ragspierre. | October 1, 2015 at 5:46 pm

        Poor poor Rags, instead of telling people to read, you should maybe try it yourself. Like maybe remove a banknote from your wallet and read the top. You know, what the thing is called ie a “Federal Reserve Note”. Why is it called a Federal Reserve Note? Because the US does not issue it, the Federal Reserve does. What is the Federal Reserve? A bank [1] granted the power to issue US money by the Federal Reserve Act.

        [1] Well techincally a collection of twelve banks.

          Ragspierre in reply to MouseTheLuckyDog. | October 1, 2015 at 6:42 pm

          And BEFORE there was a Federal Reserve…???

          SUCH an obdurate Mouse…!!!

          MouseTheLuckyDog in reply to MouseTheLuckyDog. | October 1, 2015 at 11:12 pm

          Let’s go down the line. My memory may be slightly off. First it was the Bank of America. The the First Bank of the US. Then the Second Bank of the US. Then state-sponsored banks, which became a bunch of federal banks, which became the Federal Reserve. There have almost always been banks issuing the money. The times there wasn’t were times of great economic instability.

          Af for ‘fiat” it simply means decree. “Fiat” currency is simply currency that the government declares or decrees to be valid currency. As for example, in this day and age, the US decrees that the Notes issued by the Federal Reserve are “legal tender”.

          1. Yes, look at that note, why don’t you? Whose signatures appear on it? Not those of any bankers, but of the Treasurer of the United States, and the Secretary of the Treasury.

          2. The Federal Reserve Bank is not a private bank, it’s an arm of the government. It may be formally designated as a private company, with “shareholders”, who earn “dividends”, but this is a thoroughly transparent fiction. The Fed’s central board (which is the one that sets policy) is appointed by the president and confirmed by the senate, its profit is paid directly to the treasury, and its “shares” cannot be bought or sold.

          Each bank is told exactly how many “shares” it must hold, and it may not hold even one “share” more or less than that number; it can only buy them from the Fed, and it may only sell them to the Fed, in each case at a fixed price. What this actually amounts to is a compulsory loan that banks make as the cost of doing business, and on which they earn a fixed rate of interest, regardless of the market rate, which can be good or bad for them depending on what the market rate is. Right now it’s very good for them, and they wish they could lend more at that rate, but they can’t.

          MouseTheLuckyDog in reply to MouseTheLuckyDog. | October 1, 2015 at 11:58 pm

          Although not issued by the Treasury Department, Federal Reserve Notes carry the (engraved) signature of the Treasurer of the United States and the United States Secretary of the Treasury.”

          2. The Federal Reserve Bank is not a private bank,
          I never said it was a private bank. In fact I said the opposite: it was a bank owned indirectly by the US. That doesn’t stop it from being a bank.

Another advantage of cash — besides not creating a record of what I was buying — is that it gives me a direct physical sense of diminishing my stash of available money.

If I have to hand over a wad of bills to get something, instead of just running a card through a machine, I’ll probably think a little more about whether it’s a necessary or wise purchase.

    Ragspierre in reply to Radegunda. | October 1, 2015 at 11:20 am

    Old friend of mine…a “road trader”…always carried big wads of cash with him.

    He’d start peeling off $100 bills when he was buying something, and most people, he told me, couldn’t stand the pressure. They’d sell stuff for much less than they would if he was writing them a check. There’s psychology in cash!

    NC Mountain Girl in reply to Radegunda. | October 1, 2015 at 11:40 am

    There is an old story from the Chicago Board of Trade about a market maker. He had a friend who was a senior VP at a major bank that was right across the street. Every so often he would invite his banker friend for lunch. The ritual was always the same. They’d meet in the bank lobby and his friend would usher him through security to the cash vault where the two men would spend a few minutes contemplating the contents. Then they would leave for lunch.

    The market maker said needed the reality of what a million dollars looked like so his work would not become just a game.

NC Mountain Girl | October 1, 2015 at 11:51 am

Limiting access to cash is one way to attempt to control the underground economy. Indeed, one of the best ways to measure the size of the underground economy is to compare the amount of cash in circulation with reported economic activity.

Note that in recent years in the US the amount of cash in circulation has grown. This has happened even though an increasing share of retail sales are conducted on line using electronic transfers. While some of this is related to illegal activities, it is speculated that another part of it involves people working off the books. I personally know people on Social Security Disability who work many odd jobs for cash. Any person who has worked at low end tax preparation service had heard people brag about working on the books only until they max out the Earned Income Credit and then working off the books the rest of the year. There are also people who work off the books so as to continue eligibility for various forms of assistance such as Food Stamps.

    Insufficiently Sensitive in reply to NC Mountain Girl. | October 1, 2015 at 12:35 pm

    Limiting access to cash is one way to attempt to control the underground economy.

    The UNDERGROUND economy? That system is already expert at working around the laws, and would be an early adopter of whatever commodity or substitute for cash would serve in its place.

      NC Mountain Girl in reply to Insufficiently Sensitive. | October 1, 2015 at 1:20 pm

      Think again. The vast majority of people who work in the underground economy want to spend their earnings openly. They could not do that if they are forced to use a substitute for cash in order to continue to conceal their activities. Any substitute for cash is only as good as the number of people who accept it has value. During the liquidity critics at the start of the Great Depression many communities attempted to establish local substitutes for cash. They all failed because too many people didn’t accept them and, even when accepted they could only be used within small communities.

      In order to be used outside that community, the alternative medium of exchange would have to be heavily discounted for cash. In an underground economy scenario what may happen is the reverse of what now happens with those who convert government issued debit card into cash, but with even steeper discounts going the other way.

      The other alternative is barter. Ask anyone who was in Russia when the Rouble collapsed in 1998 about the overwhelming amount of energy it takes to operate almost entirely on barter as opposed to cash. One might have to be a party to a dozen exchanges just to get a single item actually wanted. At a minimum there was often one person in each extended family who spent their time on nothing other than arranging barters.

        Insufficiently Sensitive in reply to NC Mountain Girl. | October 1, 2015 at 8:35 pm

        One might have to be a party to a dozen exchanges just to get a single item actually wanted. At a minimum there was often one person in each extended family who spent their time on nothing other than arranging barters.

        That does demonstrate the value of currency enjoying the trust of the people in the issuing government. A trusted currency is a benefit of civilization.

        Now, what does that say about some dude in the government who feels that ‘properly negative’ interest rates should by supported by abolishing that currency? From my unsophisticated point of view, tar and feathers would be woefully insufficient for that SOB.

        Remember in real-world commerce that a dollar in hand today is worth more than a dollar in future, and add another charge to the indictment of that government dude.

MouseTheLuckyDog | October 1, 2015 at 12:25 pm

These days most of the money that is held in banks is for the sake of liquidity for needs or perceived needs. Assets that are people do not need liquid are stored in other ways ie investments.

Most people find banks the most convenient way of storing those liquid assets even if they gety low interest or negative interest.

Think of it. Every new instrument that banks provide, credit cards, ATMs, debit cards etc. they charge people to use. This despite the fast that they save massive amounts of money for the banks. Imagine the costs of human tellers to replace ATMs or processing all the checks instead of debit card transactions.

Insufficiently Sensitive | October 1, 2015 at 12:47 pm

Andy Haldane, a member of the Monetary Policy Committee (MPC), the UK’s equivalent of the FOMC suggested that to achieve properly negative rates, the abolition of cash itself might be necessary.

Andy Haldane has grown too big for his britches. There’s nothing ‘proper’ about negative rates, which steal value from folks who’d be dumb enough to save their earnings in Haldane’s crooked bank.

Governments have provided money as an official medium of exchange, now and then debasing it as a way to spend more than they take in. But that requires faith in the fairness of the government, and if the people perceive that predatory ideas like Haldane’s are afoot, you can just bet that there will spring up any numbers of alternate ‘mediums’ of exchange to serve in economic exchanges between consenting adults. Anything from wooden nickels to sticks of cast-iron pipe to blocks of salt or bags of coffee – or slugs of precious metal with Donald Trump’s face on the front – would do, assuming that society would quickly tribalize into groups of mutual trust, each with its own medium.

It used to be thought that an official government medium of exchange would facilitate trust and commerce between its people. Looks like Mr. Haldane would prefer Chicago politics instead.

“electronic money is completely traceable” and, like the individual’s income tax records, bank statements and medical records, will be relegated to and regulated by a super computer that WILL obey the commands of the International Collective at Utopia Central.

“Monopoly” is not the same with Bitcoins.

buckeyeminuteman | October 1, 2015 at 2:38 pm

The best investment is lead. Copper-coated lead.

MouseTheLuckyDog | October 2, 2015 at 12:19 am

This all reminds me of something I encountered a long time.
Steve Wozniak makes his own pads of $2 bills. Legally.

Last I knew, there were over 400 “community” currencies in use in the world. They are small scale, not issued by any government (therefore not guaranteed or especially stable), and don’t usually stay in use more than a few years at a time. A few have been moderately successful, like the Brixton Pound (in England) and Ithaca Hours (in the US). (Note: I hear comments disparaging both of these, declaring them dead or worthless on a regular basis. Yet people still seem to use them, at least a little)

When interest rates turn negative, or government regulation gives people headaches, the advantages to people in some local area of issuing their own money may start to make sense. Governments will certainly respond by cracking down, making them illegal if they aren’t already, but that puts them in the position of criminalizing people who are just trying to get by. This is never healthy policy.

One of the many reasons my Swedish grandparents moved to America…