Banks, gangsters and the strange resurgence of cash(economist.com)
economist.com
Banks, gangsters and the strange resurgence of cash
https://www.economist.com/1843/2021/10/18/billions-of-banknotes-are-missing-why-does-nobody-care
245 comments
> There is a lot of rumor and speculation about very benign things.
There is certainly misrepresentation and rumour-mongering in these comments, but not in the article, and there's nothing benign about international money laundering, or more precisely, nothing benign about the people it enables.
> $50 Billion in cash is basically nothing. It's like 2% of currency in circulation.
This is very far from the numbers quoted in the article, which shows two thirds (£50bn) of all British pounds sterling banknotes (£75bn) being unaccounted for, and then similarly one-half of all Euros apparently circulating outside the eurozone.
This article wasn't written by, or from the perspective of, Americans. There's a brief mention, though - $7,000 per US citizen is in circulation. Somewhere.
> this whole article is complaining
There are no complaints registered in the article, unless you count the cash mule's plaintive wail about how heavy the suitcase was.
This article is a careful discussion about folks in authority seeming unburdened by the discrepancy.
> raise interest rates and increase law and order
Parochialism doesn't solve global issues.
There is certainly misrepresentation and rumour-mongering in these comments, but not in the article, and there's nothing benign about international money laundering, or more precisely, nothing benign about the people it enables.
> $50 Billion in cash is basically nothing. It's like 2% of currency in circulation.
This is very far from the numbers quoted in the article, which shows two thirds (£50bn) of all British pounds sterling banknotes (£75bn) being unaccounted for, and then similarly one-half of all Euros apparently circulating outside the eurozone.
This article wasn't written by, or from the perspective of, Americans. There's a brief mention, though - $7,000 per US citizen is in circulation. Somewhere.
> this whole article is complaining
There are no complaints registered in the article, unless you count the cash mule's plaintive wail about how heavy the suitcase was.
This article is a careful discussion about folks in authority seeming unburdened by the discrepancy.
> raise interest rates and increase law and order
Parochialism doesn't solve global issues.
"Money Laundering" is the narrative that always drives monetary controls, and by inference, when they're successful, everything that's not under digital surveillance is under suspicion of money-laundering. In practice, AML laws don't protect from large sums being washed by nefarious billionaires at all - as we well know, the existing banking systems with their tax and reporting havens are well able to handle large amounts of official money officially, and still out of sight. In practice, AML is a narrative that serves to legitimize controls on quite lower levels - in the 1000s. 2% of cash unaccounted for is nothing, and - I mean, preaching to the choir here - to try to hinder surveillance regimes (in the sociological sense, not the dictatorship sense) is absolutely legitimate for every normal person.
Also, western privilege: western banks rarely close their doors and leave you without access to your digital money, and rarely hyperinflate it away without any recourse (though they also have, historically). While cash doesn't protect against the second danger, it well protects against the first -within- western countries. Now, in other places hoarding Euros and Dollars, it protects against both.
Anit-Money-Laundering (AML) laws, in practice, do not protect us from greedy billionaires. They protect surveillance and hyperinflation states from citizens trying to protect themselves against them.
Also, western privilege: western banks rarely close their doors and leave you without access to your digital money, and rarely hyperinflate it away without any recourse (though they also have, historically). While cash doesn't protect against the second danger, it well protects against the first -within- western countries. Now, in other places hoarding Euros and Dollars, it protects against both.
Anit-Money-Laundering (AML) laws, in practice, do not protect us from greedy billionaires. They protect surveillance and hyperinflation states from citizens trying to protect themselves against them.
All that is to say nothing of the numerous times it turns out the banking system is itself the criminal actor. Just looking at the most recent scandal listed on Wikipedia [0] I see Madoff near-single-handedly exceeded the 50 billion in missing cash with his ponzi scheme.
It isn't like removing privacy stops crime, it just makes corrupting the government more profitable.
[0] https://en.wikipedia.org/wiki/List_of_corporate_collapses_an...
It isn't like removing privacy stops crime, it just makes corrupting the government more profitable.
[0] https://en.wikipedia.org/wiki/List_of_corporate_collapses_an...
I don't accept the parent description here because it makes everyone instantly into "law obeying" or "outlaw" in the first pass. Things are not that simple and our own ontologies can't force them to be so. I invite the reader to broaden the thinking here.. There is not one bright line of LEGAL|ILLEGAL, not even close. Those whose job it is to refer to this line, may say so. The effort of those whose job depends on these definitions, does not make it so.
Let's go way back to the wild days of "utterly different tribes interacting." You know, really basic things are really very different, between people. What is legal are base definitions, but differences grow from there and increase. A system of physical currency bridges that divide.
Now let's think of "the Empire that takes taxes from all tribes." Of course there is an effort to standardize practices, so that Empire can collect vastly larger sums than any one or ten tribes, and use that money to build roads, forts, harbors and hire police/troops.
With this aggrandized example pair, think of the role of cash, banking and transfer of money. It is not "illegal" to handle money outside of accounting practices of Empire, but by keeping and holding your own money in your own ways so you are defining economic territory outside of the control of a centralized/tax system. Legions of accountants will oppose this, since the accountants are paid more by Empire.
Let's go way back to the wild days of "utterly different tribes interacting." You know, really basic things are really very different, between people. What is legal are base definitions, but differences grow from there and increase. A system of physical currency bridges that divide.
Now let's think of "the Empire that takes taxes from all tribes." Of course there is an effort to standardize practices, so that Empire can collect vastly larger sums than any one or ten tribes, and use that money to build roads, forts, harbors and hire police/troops.
With this aggrandized example pair, think of the role of cash, banking and transfer of money. It is not "illegal" to handle money outside of accounting practices of Empire, but by keeping and holding your own money in your own ways so you are defining economic territory outside of the control of a centralized/tax system. Legions of accountants will oppose this, since the accountants are paid more by Empire.
"one-half of all Euros apparently circulating outside the eurozone."
Its common for wealthy (upper middle class, not oligarch) folks in Russia to have proper safe at home, and to keep thousands of Euros in cash there.
They often use Euro's because Ruble devalues a lot. Additionally, they have justified distrust in the ability of the government to run the economy and banking system, and it is their stash in case either collapses.
So cash does not mean Crime, it could also mean you don't want to be left out in the cold.
Its common for wealthy (upper middle class, not oligarch) folks in Russia to have proper safe at home, and to keep thousands of Euros in cash there.
They often use Euro's because Ruble devalues a lot. Additionally, they have justified distrust in the ability of the government to run the economy and banking system, and it is their stash in case either collapses.
So cash does not mean Crime, it could also mean you don't want to be left out in the cold.
Doesn't even need to be 'wealthy', just be above payday-to-payday survival and have savings.
One thing that's also benign but not mentioned by the grandparent is that any economy which has considerable foreign travelers passing through will likely end up losing some cash. I have two pint glasses sitting on my desk, one for coins, the other for bills, they are literally packed full of money from my various travels. Last time I checked, I had almost 300 euros in there and I haven't been in the Eurozone in quite some time (pandemic notwithstanding). I'm not sure if others are like me, but usually I just get cash from an ATM and pay the conversion fee but I refuse to convert back because the money changers at the train stations and airports rip you even harder than the ATM does. It just rubs me the wrong way to take it both coming and going on the conversion. So I keep the bills, and at worst case they're souvenirs.
I too have a drawer of various currencies, some of them even since retired, or issued by governments/nations that no longer exist.
However, given that international travel took a nosedive in the last 18 months whilst banknote production continued to stampede, I'd have to suggest that hoarding by globetrotters doesn't account for any current discrepancy in production vs use in observable trade.
However, given that international travel took a nosedive in the last 18 months whilst banknote production continued to stampede, I'd have to suggest that hoarding by globetrotters doesn't account for any current discrepancy in production vs use in observable trade.
€300 seems a lot to have in cash anyway, regardless of tourism. That is probably more than most people would want to risk on loss/theft.
It's three times what I routinely carry, which is still above average:
https://www.bloomberg.com/toaster/v2/charts/892967a8146e4cc8... or https://www.statista.com/statistics/787626/average-amount-of...
It's three times what I routinely carry, which is still above average:
https://www.bloomberg.com/toaster/v2/charts/892967a8146e4cc8... or https://www.statista.com/statistics/787626/average-amount-of...
Generally speaking I get a pretty large sum of cash out at the beginning of a trip upon arrival and try to use cash for everything. It does depend on where I'm visiting, but the reality is that in a lot of the world there are places which only accept cash or where you can have a simpler transaction using cash. When I return, I just dump whatever remains in the jar. In theory I would take it with me if I visit a place that uses that currency again, but I usually forget and since I have to get more from the ATM anyway I don't really worry about it. It's not as if I brought back 300 euros from one trip. I have currency in there right now from about 28 different countries.
Regarding cash to carry, I basically am not concerned with pick pocket / theft, for a number of reasons, and am more concerned with a business being unable to take a card for some reason. For instance, my primary travel card is an American Express which is not accepted by small businesses in a lot of countries, such as restaurants and shops. In these cases I have a backup card, but I would prefer to use cash. I also ensure I have enough cash to always get me back home and in communication, so enough to replace my phone and get a return plane ticket.
I imagine locals don't need to carry as much cash as foreigners because they have a different set of concerns and easy / ready access to more cash without being charged exorbitant fees for access.
Regarding cash to carry, I basically am not concerned with pick pocket / theft, for a number of reasons, and am more concerned with a business being unable to take a card for some reason. For instance, my primary travel card is an American Express which is not accepted by small businesses in a lot of countries, such as restaurants and shops. In these cases I have a backup card, but I would prefer to use cash. I also ensure I have enough cash to always get me back home and in communication, so enough to replace my phone and get a return plane ticket.
I imagine locals don't need to carry as much cash as foreigners because they have a different set of concerns and easy / ready access to more cash without being charged exorbitant fees for access.
I have had to carry a fair amount of cash into foreign countries, especially that time I had to bring fresh, non-wrinkly notes because the tour vendors demanded it. The bank was absolutely not surprised by my request.
I carry between £30 and £200. I aim to have about £100.
I have a single debit card, and a credit card I haven't used for years (I always failed to pay it off at the end of the month). The reason I carry cash is in case my debit card stops working - suspended by the bank due to suspected fraud, card stops working in card-readers, bank decides to close my account without warning or explanation.
£100 should last me a couple of days, in which time (hopefully) any problem with the card should be resolvable.
I don't carry shrapnel any more. I don't use cash in shops, unless they have a minimum card spend (then I have to carry the shrapnel change home). COVID has led to many shops having a preference for card payment, so I comply.
Perhaps I should peel off all but £30, and keep it somewhere safe at home. But I'm not afraid of being robbed in the street.
I have a single debit card, and a credit card I haven't used for years (I always failed to pay it off at the end of the month). The reason I carry cash is in case my debit card stops working - suspended by the bank due to suspected fraud, card stops working in card-readers, bank decides to close my account without warning or explanation.
£100 should last me a couple of days, in which time (hopefully) any problem with the card should be resolvable.
I don't carry shrapnel any more. I don't use cash in shops, unless they have a minimum card spend (then I have to carry the shrapnel change home). COVID has led to many shops having a preference for card payment, so I comply.
Perhaps I should peel off all but £30, and keep it somewhere safe at home. But I'm not afraid of being robbed in the street.
Paying electronically has improved a lot in the last dozen or so years, but my typical strategy had always been to keep $50-100 of local currency in my front pocket, and then another $200 usd in my money belt (along with my passport) for a typical day.
Between food and drink, lunch, busfare etc $100 generally covered most expenses beyond tickets to events, and then $200 USD was usually enough to solve any significant problems if you miss your bus ride home or whatever. If you sprain your ankle in some castle ruins, you likely don't want to spend half the afternoon hobbling around historic cobblestone roads in a village somewhere looking for an ATM to get taxi fare back to the hotel. Taxi drivers rarely turn down USD.
That said, ATM fees internationally, depending on your card issuer, can be pretty expensive, ATM fees + forex fees can amount to over 10% if you're only pulling out $100/day. If you don't mind the risk, pulling out the maximum amount of cash per day (usually $400 I've noticed) gets total fees down to about 4%. If you're a student backpacker on a budget for weeks on end these fees can be a substantial fraction of your travel savings/budget.
Between food and drink, lunch, busfare etc $100 generally covered most expenses beyond tickets to events, and then $200 USD was usually enough to solve any significant problems if you miss your bus ride home or whatever. If you sprain your ankle in some castle ruins, you likely don't want to spend half the afternoon hobbling around historic cobblestone roads in a village somewhere looking for an ATM to get taxi fare back to the hotel. Taxi drivers rarely turn down USD.
That said, ATM fees internationally, depending on your card issuer, can be pretty expensive, ATM fees + forex fees can amount to over 10% if you're only pulling out $100/day. If you don't mind the risk, pulling out the maximum amount of cash per day (usually $400 I've noticed) gets total fees down to about 4%. If you're a student backpacker on a budget for weeks on end these fees can be a substantial fraction of your travel savings/budget.
You can't even replace your phone for that much.
I don't carry less than the cost of a new phone, new laptop, and at least a week in a hotel.
All sorts of systems can fail that make cards and ATMs stop working. Look at Puerto Rico after Maria.
I don't carry less than the cost of a new phone, new laptop, and at least a week in a hotel.
All sorts of systems can fail that make cards and ATMs stop working. Look at Puerto Rico after Maria.
It’s about what I withdraw at the airport. I don’t know the next time I’ll find an ATM that accepts my card. I only want to pay the fixed fee once. I estimate my risk of a mugging, while non-zero, to be very low.
The precautionary savings of physical cash may even be on the rise as people realize how easily their economic lives could be switched off in an instant in the increasingly digital world, whether by being intentionally targeted or accidentally disabled with a lot of bureaucracy slowing down the correction.
Having enough cash under your mattress that authority figures can't easily take from you is a psychological comfort.
Having enough cash under your mattress that authority figures can't easily take from you is a psychological comfort.
Pseudo-relevant anecdote: I wanted to buy a used car a few months ago off someone on Facebook. We were meeting up same day so the easiest method seemed to be cash. I went to the bank to withdraw $7000 and was informed, much to my surprise, that it is impossible to withdraw more than $3000 without 48 hours notice.
Suffice it to say, I've been seriously considering the tradeoffs of hoarding cash under my mattress.
Suffice it to say, I've been seriously considering the tradeoffs of hoarding cash under my mattress.
There was underreported shortage of cash since the start of pandemic. My branch for a while wouldn’t give out more than a $1000. Before the pandemic $10000 were fine.
There has also been a shortage of metal coins, because physical exchange isn't happening as much during covid.
Although, I still personally believe that coins at least up to the US quarter should probably be abolished. Quarters are really the only thing semi useful as a medium of exchange, and even they are starting to lose their utility. Maybe dollar coins can still be useful.
Although, I still personally believe that coins at least up to the US quarter should probably be abolished. Quarters are really the only thing semi useful as a medium of exchange, and even they are starting to lose their utility. Maybe dollar coins can still be useful.
the US killed the half-penny when it was worth what a dime was worth today - practically speaking, anything under a quarter is too little to be worth worrying about.
Yes, this likely means retailers will play games with change, but other times you will come out on top with the rounding. And think about it this way - yes, sometimes retailers played games with the half-penny too. A few decades on, once you've gotten out of the mindset that someone is "cheating you" out of maybe as much as a quarter-penny every transaction, nobody cares, it's not an actual significant amount of money.
there also are significant costs associated with maintaining currency units that small - it costs more than a penny to make a penny, and while sure, that penny gets used through multiple transactions, that also incurs additional costs on everybody who has to handle that penny in every single transaction. The amount of time and energy spent handling that penny probably winds up being dollars over the lifespan of the penny.
this also gives interesting context to the expression "a penny saved is a penny earned" - that expression today would be "a dollar saved is a dollar earned". A penny was actually a decently significant amount of money when that expression was coined, it wasn't literally "every single quarter-penny matters".
Yes, this likely means retailers will play games with change, but other times you will come out on top with the rounding. And think about it this way - yes, sometimes retailers played games with the half-penny too. A few decades on, once you've gotten out of the mindset that someone is "cheating you" out of maybe as much as a quarter-penny every transaction, nobody cares, it's not an actual significant amount of money.
there also are significant costs associated with maintaining currency units that small - it costs more than a penny to make a penny, and while sure, that penny gets used through multiple transactions, that also incurs additional costs on everybody who has to handle that penny in every single transaction. The amount of time and energy spent handling that penny probably winds up being dollars over the lifespan of the penny.
this also gives interesting context to the expression "a penny saved is a penny earned" - that expression today would be "a dollar saved is a dollar earned". A penny was actually a decently significant amount of money when that expression was coined, it wasn't literally "every single quarter-penny matters".
Granted I live in Japan, but I carry a coinpurse (an old camera bag) because the 10-yen, 100-yen, and 500-yen coins are so useful. Vending machines are on practically every corner here, and the drink sizes are such that $1.20 for a drink is normal. I think most US vending machines have gigantic cans of Coca-Cola / Red Bull / Monster for $3+.
The US probably could get by with just $1 and $5 coins.
The US probably could get by with just $1 and $5 coins.
Vending machines in France usually have NFC readers to allow contactless payments by card or phone. It's so much more practical than carrying a bunch of coins.
But it's much much harder to acquire a privacy-respecting contactless payment setup than carry a bunch of coins.
> privacy-respecting contactless payment setup
Do you know any? If I could vet its security and """reasonably total""" privacy, the idea could be tempting - e.g. to buy a cheap device to only do monetary transactions. I am not sure, first of all, how you would transform cash into credit into a personal device.
Do you know any? If I could vet its security and """reasonably total""" privacy, the idea could be tempting - e.g. to buy a cheap device to only do monetary transactions. I am not sure, first of all, how you would transform cash into credit into a personal device.
I don't know of a way that's both widespread, cheap and legal.
* Country-specific: prepaid cards like Suica in Japan, purchasable with cash from ATMs.
* Not that cheap: offshore bank account.
* Not legal: crypto card with "borrowed" KYC.
So basically unless you're lucky to be living in a country with a privacy-respecting culture, you have to act like a criminal to regain the basic right to privacy.
* Country-specific: prepaid cards like Suica in Japan, purchasable with cash from ATMs.
* Not that cheap: offshore bank account.
* Not legal: crypto card with "borrowed" KYC.
So basically unless you're lucky to be living in a country with a privacy-respecting culture, you have to act like a criminal to regain the basic right to privacy.
Do you mean that you obtain a card, go to an ATM, insert the card and the cash, and recharge it - without the ATM knowing it is you?
Because I also know of systems which are related to banks, but explicitly come from your account, invisibly to the seller - but the bank knows everything.
I have seen anonymous pre-paid cards which had in the back the space for a signature, and were accompanied by instructions such as "must be signed to be valid".
Because I also know of systems which are related to banks, but explicitly come from your account, invisibly to the seller - but the bank knows everything.
I have seen anonymous pre-paid cards which had in the back the space for a signature, and were accompanied by instructions such as "must be signed to be valid".
Many vending machines in Tokyo accept contactless subway cards (suica) for payment, but not all of them.
The Japanese still love their cash and coins. And even though they have a variety of NFC payment options and credit cards are not as terrible as they once were, their adoption rate is slow.
The Japanese still love their cash and coins. And even though they have a variety of NFC payment options and credit cards are not as terrible as they once were, their adoption rate is slow.
Can't wait to swipe my Hello Kitty Icoca for a can of Boss Flash Brew ;)
Last vending machine I used had cans for 75¢ and bottles for $1.25.
Damn a $0.75 can is cheap even by Japanese standards, and I'm assuming that's a US-standard 12FL OZ can (bigger than Japanese ones too).
What's the value of coins? Paper and plastic notes seems more convenient in most cases.
Metal coins seem like a case of holding onto tradition despite losing the original reason for the tradition.
Metal coins seem like a case of holding onto tradition despite losing the original reason for the tradition.
Detecting quarters is a lot easier, faster, and more reliable than detecting dollar bills. Card payments really want to be made online and transaction fees are brutal for small amounts anyway, so you end up with special purpose stored value cards and all of the lost change that implies.
Plus, quarters are better to flip to make decisions than bills.
Plus, quarters are better to flip to make decisions than bills.
Yep, tails never fails!
On the other end here in India there are few vending machines, but mostly are now based on digital payments.
As you said, in most cases. Mechanical (no electronics) vending machines are only possible with coins and even with electronics, sorting/recognising coins is far easier than notes. A basic coin also takes more effort to forge (well enough to pass at a gas station) than a basic note, although notes seeming everywhere else but the US have obvious safety features that completely beat coins.
They're also much easier to handle when you need many different ones, like when you're trying to assemble an exact amount. I can just look into my wallet and pick out the coins I need, whereas with notes, I'd have to spread them out like an awkward floppy hand of cards and especially if they weren't distinct enough scanning through and finding the right ones sounds plain annoying.
They're also much easier to handle when you need many different ones, like when you're trying to assemble an exact amount. I can just look into my wallet and pick out the coins I need, whereas with notes, I'd have to spread them out like an awkward floppy hand of cards and especially if they weren't distinct enough scanning through and finding the right ones sounds plain annoying.
Coins also last a lot longer, and are harder to accidentally damage / destroy. Canada moved to 1 and 2 dollar coins, for just this reason.
(Plus, 2 dollars is like a quarter 50 years ago....)
(Plus, 2 dollars is like a quarter 50 years ago....)
Canada got rid of pennies.
That's interesting, Wells at least seems to have increased cash withdrawal limits from their ATMs during the pandemic (and/or it's been years since I withdrew enough cash to notice), my memory was that I couldn't pull out more than ~$300/day but I see there's a $1000 option now (not sure how many customers they could serve taking that much out, I did recently see one ATM out of service to be refilled in the middle of the afternoon).
I've always heard the best way to do this transaction is for buyer and seller to meet at buyers bank. Buyer obtains cashier's check with seller watching and hands it over to seller before leaving bank. This way seller knows cashier's check is real, you don't have to deal with large amounts of cash, and nobody's at risk of getting robbed.
Downside is you have to go during banking hours and you have to make an extra trip.
Downside is you have to go during banking hours and you have to make an extra trip.
I don't really see people doing this in the UK anymore. Cars can be bought with a debit card if you have the funds, sometimes a call to the bank is required for verification.
When I've bought 2nd hand kayaks from someone's home, I've been able to transfer the money on my phone through the banking app and they've seen the funds arrive in seconds. Is this not the case in the US?
When I've bought 2nd hand kayaks from someone's home, I've been able to transfer the money on my phone through the banking app and they've seen the funds arrive in seconds. Is this not the case in the US?
The US banking system is still dog shit by comparison to the UK/EU.
That said, Faster Payments in the UK are not guaranteed to be instant and can take up to 2 hours. Also, some banks will arbitrarily downgrade them back to slow old BACs if it flags up as risky on their systems or if it's someone you haven't sent money to before.
In general I agree it's not a problem though, you're not going to let the buyer take the keys until the money is in your account.
That said, Faster Payments in the UK are not guaranteed to be instant and can take up to 2 hours. Also, some banks will arbitrarily downgrade them back to slow old BACs if it flags up as risky on their systems or if it's someone you haven't sent money to before.
In general I agree it's not a problem though, you're not going to let the buyer take the keys until the money is in your account.
Every secondhand item I've bought or sold on Craigslist (including a car bought and a car sold) was transacted in cash (literal banknotes). There is 0.0% chance that I'd consider paying or accepting anything else as it's just not the normal practice, meaning the risk of fraud is much higher.
I did this a couple of months ago (in the UK) - bought a car and did the bank transfer on my phone, sat in the guy's front room.
However, I did need to borrow his card reader/code generator thing - put my card in, enter the PIN and the amount and then type in the code it generated into my phone to authorise the transfer. Presumably because of the large amount going to a new payee.
However, I did need to borrow his card reader/code generator thing - put my card in, enter the PIN and the amount and then type in the code it generated into my phone to authorise the transfer. Presumably because of the large amount going to a new payee.
That’s a really good idea.
It can be just bank policy, not related to any shortage or whatever. My bank allowed me to withdraw $ 30k, and didn't even ask why, they just said "come tomorrow, we don't have that cash today".
Yeah, it's not a shortage. It's bank policy to mitigate the risk of bank runs. What bothered me was the 24hr (or 48 hr in my case) notice requirement. That day I learned that my money is only actually mine (in the sense that I can use it as I please) if the bank decides to allow me.
As time goes on, those dollar maximums and notice periods are malleable and completely outside my control.
As time goes on, those dollar maximums and notice periods are malleable and completely outside my control.
> That day I learned that my money is only actually mine (in the sense that I can use it as I please) if the bank decides to allow me.
It’s possible that the kind of account you have with that bank plays a role here. There has been a lot of deregulation over the last 10 years or something, but it used to be that your account had a descriptive name - passbook savings, demand deposit, etc. And those names meant something! A demand account meant you could demand your money any time you wanted, but it was against the law to earn interest. A passbook savings account earned interest, but you were limited in how often you could take money out, etc.
It’s possible that the kind of account you have with that bank plays a role here. There has been a lot of deregulation over the last 10 years or something, but it used to be that your account had a descriptive name - passbook savings, demand deposit, etc. And those names meant something! A demand account meant you could demand your money any time you wanted, but it was against the law to earn interest. A passbook savings account earned interest, but you were limited in how often you could take money out, etc.
Depends on the bank. Most branches are really sales offices. Usually there’s a few that actually stock cash.
That’s wild. When I was a teller (15 years ago maybe) we would routinely keep around 7-10k in our drawers, and another 40k as ready money in the day safe.
Granted, we were a drive up branch that dealt with commercial/retail so a lot of customers would routinely be dealing with 5k worth of cash. Other branches had similar amounts of cash though.
Strange world
Granted, we were a drive up branch that dealt with commercial/retail so a lot of customers would routinely be dealing with 5k worth of cash. Other branches had similar amounts of cash though.
Strange world
I've also been hit by not being able to withdraw more than about $5k cash as a retail customer without multi day notice. I do wonder if it's not all nefarious as cash has become drastically less common over the past couple decades.
Still, it's especially interesting because the numbers even 15 years ago are much higher in real terms than today.
This is another advantage of inflation.
You can set rules like, you have to declare more than $10k worth of assets traveling with you on flights, and every year, the plummeting value of that dollar metric includes more and more people and activities in the surveillance state.
Still, it's especially interesting because the numbers even 15 years ago are much higher in real terms than today.
This is another advantage of inflation.
You can set rules like, you have to declare more than $10k worth of assets traveling with you on flights, and every year, the plummeting value of that dollar metric includes more and more people and activities in the surveillance state.
Cash is a bit of a pain to deal with, and most branches all normal withdrawals are going to be via the ATM anyway.
Cash is also a security risk and liability from a ‘getting robbed’ perspective.
So it’s rare to really need more anymore, except for outlier situations like car sales, which they generally don’t handle well.
Cash is also a security risk and liability from a ‘getting robbed’ perspective.
So it’s rare to really need more anymore, except for outlier situations like car sales, which they generally don’t handle well.
True, but so much of banking has been moved to online and mobile so visits to an actual branch are almost always outlier situations.
I shouldn’t have to schedule something ahead of time which is the equivalent of cashing the average American paycheck. Cash might be a bit of a pain, but there are still plenty of common and good reasons why I might want 5k of my money without having to wait a few days for it.
I shouldn’t have to schedule something ahead of time which is the equivalent of cashing the average American paycheck. Cash might be a bit of a pain, but there are still plenty of common and good reasons why I might want 5k of my money without having to wait a few days for it.
100% agree, however a lot of the banks seem to not have picked up on this yet.
Same, though it was about 20 years ago for me.
I remember a guy withdrawing $25k in cash one day. That was unusual, which is why I remember it, but it wasn’t a problem either. (We gave it to him in a big sack, and I was disappointed that the sack didn’t have a large $ printed on the side.)
I remember a guy withdrawing $25k in cash one day. That was unusual, which is why I remember it, but it wasn’t a problem either. (We gave it to him in a big sack, and I was disappointed that the sack didn’t have a large $ printed on the side.)
Look at the security at most bank branches - it’s awful.
My wife used to work at a regional branch that did cash management for other banks. The place was like a fortress and had a lot of physical security measures to protect the people and dollars. That branch was nuts - they’d handle millions in currency and be able to handle six figure withdrawals. Midtown Manhattan banks can do that too.
My wife used to work at a regional branch that did cash management for other banks. The place was like a fortress and had a lot of physical security measures to protect the people and dollars. That branch was nuts - they’d handle millions in currency and be able to handle six figure withdrawals. Midtown Manhattan banks can do that too.
Same thing here, wanted to buy a car in cash, called the bank "Can I have x thousand EUR today?" - "No, you need to tell us 24h in advance" - "OK, can I have x-1 thousand EUR tomorrow?" - "Are you kidding me?"
Well, either they made it or I went to 2 different branches, but it was a classic "Why even have the rule with an arbitrary number"
Well, either they made it or I went to 2 different branches, but it was a classic "Why even have the rule with an arbitrary number"
> it is impossible to withdraw more than
In some countries that's the law.
> I wanted to buy a used car ... the easiest method seemed to be cash
In some countries that became illegal over a certain threshold of expense the payment must be traceable).
I was recently told (but did not verify) that car sellers, in some countries, out of some regulation, nowadays will even ask you how you "made" that money. (And I replied that they'd better know better before being impertinent.)
In some countries that's the law.
> I wanted to buy a used car ... the easiest method seemed to be cash
In some countries that became illegal over a certain threshold of expense the payment must be traceable).
I was recently told (but did not verify) that car sellers, in some countries, out of some regulation, nowadays will even ask you how you "made" that money. (And I replied that they'd better know better before being impertinent.)
sounds like you live in a police state.
A place with a traditionally skewed (Pareto) distribution in all non-monetary contexts, in which it was decided that Median Jack should rule and anti-intellectualism ate society and state.
I am trying to flee - if you know a place in which values (such as aptitude and civilization) are still in place, drop a note.
Interestingly for the context, it was a crisis in banking that "made the first alarms ring", in my case, years ago.
I am trying to flee - if you know a place in which values (such as aptitude and civilization) are still in place, drop a note.
Interestingly for the context, it was a crisis in banking that "made the first alarms ring", in my case, years ago.
You're not that many steps away from being a gold bug or a bitcoin hodler.
I don't think this is true. I don't know anyone who would have benefited from owning gold or bitcoin in an emergency. However, my hometown once had its only internet exchange catch on fire, and the bank had a multiple-hour queue going around the block to withdraw a maximum of (I think) $300 in cash. I've also loaned money to people whose bank accounts got flagged.
For those reasons I keep a week of cash on hand, not because civilisation might collapse, but as a buffer if my access to the banking system is disrupted.
For those reasons I keep a week of cash on hand, not because civilisation might collapse, but as a buffer if my access to the banking system is disrupted.
I owned an ounce of gold in the past. When I needed some quick cash many of the buyers wouldn't buy it for fear of it being fake. The ones that would buy it wanted to pay less than the spot price. I've never owned it since, but silver coins were a different story. I had 1oz Canadian maple leafs that sold very quickly.
Depending on your hobbies, having access to cash to make purchases is pretty important. (Do you collect arcade machines, vintage bikes or vintage anything else? If so, you might want to buy something with cash that costs a $1000 or two).
For a while last year, bank branches had pretty limited hours, and I bank with a out of state credit union (because they have decent interest rates, even if that's 0.5% these days), and some co-op network branches weren't doing shared branching either. So, if I want to be able to buy something over my daily ATM limit, I had to hoard cash, since I couldm't be sure I'd have access to it.
Of course, prices haven't been great for buyers on most things (although I did pick up a well priced Street Fighter II Turbo early last summer and a not terribly priced tandem this spring; lots more nice things went at prices I'm not willing to pay)
For a while last year, bank branches had pretty limited hours, and I bank with a out of state credit union (because they have decent interest rates, even if that's 0.5% these days), and some co-op network branches weren't doing shared branching either. So, if I want to be able to buy something over my daily ATM limit, I had to hoard cash, since I couldm't be sure I'd have access to it.
Of course, prices haven't been great for buyers on most things (although I did pick up a well priced Street Fighter II Turbo early last summer and a not terribly priced tandem this spring; lots more nice things went at prices I'm not willing to pay)
The reason those people exist is that the US banking system is so bizarrely dysfunctional. The American system is corrupt and byzantine and antiquated and leaves tens of millions of people out in the cold. Those people are absolutely right to be furious. They're just wrong about the solution.
I dont think either of those is any great option but government has really damaged our banking system. Having no ability to withdraw own money or having the IRS snoop if you have more than $x in an account is so really wrong and makes me want to look elsewhere, just there dont seem to be many good alternatives.
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Hurricane season started in the southeastern US on June 1st. It's not uncommon for folks to have a few hundred in cash for when the power goes out and the credit card terminals aren't working.
Sometimes the card systems don't work on a normal day.
I was checking out food at a supermarket with debit when the card reader crashed. Cashier rebooted it but it complained that I didn't have enough money in the account, which I definitely did. I checked my banking app and it showed as if the transaction had succeeded, but the supermarket couldn't produce a receipt and refused to give me the groceries. When I called the bank they said there's nothing they can do and it would sort itself out in two weeks. The supermarket info desk radio'd that apparently someone else was also having trouble checking out with debit.
That was the day I vowed to always withdraw a month's expenses in advance and fight against full computerization of cash. I can imagine someone getting screwed real good having their food budget stuck in a banking error for half a month unable to buy food!
I was checking out food at a supermarket with debit when the card reader crashed. Cashier rebooted it but it complained that I didn't have enough money in the account, which I definitely did. I checked my banking app and it showed as if the transaction had succeeded, but the supermarket couldn't produce a receipt and refused to give me the groceries. When I called the bank they said there's nothing they can do and it would sort itself out in two weeks. The supermarket info desk radio'd that apparently someone else was also having trouble checking out with debit.
That was the day I vowed to always withdraw a month's expenses in advance and fight against full computerization of cash. I can imagine someone getting screwed real good having their food budget stuck in a banking error for half a month unable to buy food!
Slowing down the correction?
I had 40K taken by US Bank last year...365 days have passed and they're still coming up with excuses as to why they can't disburse that amount to me.
Thank god that I had the insight to start a savings account at a Credit Union about 10 years ago, and moved half of my paychecks there via direct deposit.
I now keep cash in a safe (what safety am I getting keeping that cash in a CD at .05%?) as my savings account.
I had 40K taken by US Bank last year...365 days have passed and they're still coming up with excuses as to why they can't disburse that amount to me.
Thank god that I had the insight to start a savings account at a Credit Union about 10 years ago, and moved half of my paychecks there via direct deposit.
I now keep cash in a safe (what safety am I getting keeping that cash in a CD at .05%?) as my savings account.
Don't forget civil forfeiture.
The government can legally just take your wealth from you, and you have to prove that you it came from legit and legal means, and they can drag their feet even when you produce proof.
https://www.aclu.org/issues/criminal-law-reform/reforming-po...
The government can legally just take your wealth from you, and you have to prove that you it came from legit and legal means, and they can drag their feet even when you produce proof.
https://www.aclu.org/issues/criminal-law-reform/reforming-po...
But there is also a record level of natural disasters in term of flood and fire. I wonder if an unusual level of cash was destroyed
Fire/water proof safes aren't terribly expense.
Also, safe deposit boxes are an option, which have different security tradeoffs from a safe in your home.
Also, safe deposit boxes are an option, which have different security tradeoffs from a safe in your home.
A safe deposit box is at a bank, at which point, why not just put your money in the bank?
And fire-proof safes aren't "fire proof". They're generally rated for a reasonable amount of fire resistance - 1 to 2 hours - which is usually enough time for a house to burn down around them and be extinguished (they also only promise to protect paper, for example).
Whether they would survive the inferno of a bushfire, wherein the house is not extinguished, is far less clear.
And fire-proof safes aren't "fire proof". They're generally rated for a reasonable amount of fire resistance - 1 to 2 hours - which is usually enough time for a house to burn down around them and be extinguished (they also only promise to protect paper, for example).
Whether they would survive the inferno of a bushfire, wherein the house is not extinguished, is far less clear.
Banks close first, for emergency supplies safe deposit boxes are basically useless.
Depends on the scenario.
If it's a societal event, then yes, you can't rely on safe deposit boxes, just like you can't rely on your bank account. You're better off shoving cash under your mattress and stacking brass and lead.
But if it's an individual event, then your home itself might be a target, and safe deposit boxes might mitigate your risk.
It's all about tradeoffs.
If it's a societal event, then yes, you can't rely on safe deposit boxes, just like you can't rely on your bank account. You're better off shoving cash under your mattress and stacking brass and lead.
But if it's an individual event, then your home itself might be a target, and safe deposit boxes might mitigate your risk.
It's all about tradeoffs.
So you really want to do a little bit of all. A month's worth of cash safely hidden in your home. Another in an easy-to-access account at your bank. Another in a deposit box at a different bank.
Reminds me of 1-2-3 rule for backups.
Reminds me of 1-2-3 rule for backups.
Previous commentary on Safe Deposit Boxes:
https://news.ycombinator.com/item?id=27106695
https://news.ycombinator.com/item?id=27106695
Yeah. It's not an either/or situation. It's a both/and.
Tradeoffs generally require hedging your bets.
Tradeoffs generally require hedging your bets.
Physical cash that buys less and less with each passing day is not as useful, though.
If you don’t get paid interest at a bank, and no brokerage is going to take you on (or you don’t trust them), then what else are your options?
I mean isn't that the reason preppers love gold/silver bullion?
Those are the folks schnookered by companies that sell gold. Aka suckers.
The “real” gold and silver people use it to avoid taxation. The high spreads and illiquidity are less than what you owe the tax guy or your ex-wife.
The “real” gold and silver people use it to avoid taxation. The high spreads and illiquidity are less than what you owe the tax guy or your ex-wife.
I don't see either high spreads or illiquidity. At least in the US the spread from reputable dealers is under 1% for bullion; slightly more for coins. It is certainly a feasible (and, in current low interest rate scenario, inexpensive) hedge against catastrophic economic problems.
The only stuff with that kind of spread are 100oz silver bars or 1oz gold coins, all of which are well outside of feasible for $20/wk folks (unless they are willing and able to save for 2 yrs per coin anyway)
Where do you find spreads that low? They’re like 10-20% where I am.
Using reputable dealers that deliver orders placed online. Strange as it sounds, it is, IMO, one of the better and safer (definitely low commission) ways to get gold. BD Bullion, APMEX are good ones. I did not check very recently, but when I did the difference with spot price were under 1% (slightly higher for APMEX, slightly lower for BD). A friend in Australia mentioned the same ballpark, 1-1.5% spread (combined, not each way). 10-20% is a highway robbery!!
An important caveat: this only applies to reasonably large orders, 1 oz or larger. You cannot buy $100 of gold with 1% spread.
An important caveat: this only applies to reasonably large orders, 1 oz or larger. You cannot buy $100 of gold with 1% spread.
I stand corrected -- currently, the difference with spot price is about 2% each way. Lower than 10-20%, but much higher than ~0.5% I remember earlier. I suspect this is due to recent gold price volatility, but not sure.
How exactly is it going to work out if all purchaser of gold are tracked? You can’t buy any amount of gold without id.
You don't need to be anonymous. Legal tender Gold coinage in the UK is free of capital gains tax, so even if the spot price goes up 1000% you still pay nothing to the tax man on sale.
For this reason alone lots of the extremely wealthy hold it as a hedge.
At volume the premium over spot is about ~6% even straight from the Royal Mint
Example: https://www.royalmint.com/invest/bullion/bullion-coins/gold-...
For this reason alone lots of the extremely wealthy hold it as a hedge.
At volume the premium over spot is about ~6% even straight from the Royal Mint
Example: https://www.royalmint.com/invest/bullion/bullion-coins/gold-...
How would you go about doing that, and what would it accomplish?
Gold doesn't multiply itself so that you have more gold that might be unreported. It's not like an investment account in the Caymans. It's just a collectible. You can also buy rare books, or antique furniture, or rubies, or any other collectible. There is absolutely nothing special about gold that doesn't equally apply to these other items, other than gold is more famous.
Gold doesn't multiply itself so that you have more gold that might be unreported. It's not like an investment account in the Caymans. It's just a collectible. You can also buy rare books, or antique furniture, or rubies, or any other collectible. There is absolutely nothing special about gold that doesn't equally apply to these other items, other than gold is more famous.
They are not tracked at all.
People who have businesses that are easy to run in cash (landlords, construction, restaurant trades) often run a portion of the business off book. Converting cash to commodities is a pretty common way to store value more securely, as cash gets unwieldy. Sometimes country folk use equipment like tractors or junk cars for similar purposes.
People who have businesses that are easy to run in cash (landlords, construction, restaurant trades) often run a portion of the business off book. Converting cash to commodities is a pretty common way to store value more securely, as cash gets unwieldy. Sometimes country folk use equipment like tractors or junk cars for similar purposes.
It’s trivial to buy gold in the US without id, in cash. More than a million or two might require something, but less than that very doable.
How exactly would you go about that? And how are you going to make sure you are buying gold and not gold-plated lead?
You go to a reputable dealer with cash, and buy what you want. If you’re clear you are doing a cash only deal no name, you’re good.
They’ll issue you an invoice made out to walk in or whatever, so you have documentation, and if you want, you can pay taxes on gains or whatever later.
It IS getting harder to get cash out of a bank without jumping through endless hoops, but most banks will still let you call in an order for $20k cash or whatever (more than $100k starts to become much more difficult) and after a few days will have it ready for you with documentation (so if a cop pulls you over you can prove it is documented/part of a ‘legal’ source).
Some will make you sign a waiver so if you get mugged outside the bank, you were warned and it’s not their fault, etc. at some point it’s probably worthwhile to get an armored truck or whatever.
They’ll issue you an invoice made out to walk in or whatever, so you have documentation, and if you want, you can pay taxes on gains or whatever later.
It IS getting harder to get cash out of a bank without jumping through endless hoops, but most banks will still let you call in an order for $20k cash or whatever (more than $100k starts to become much more difficult) and after a few days will have it ready for you with documentation (so if a cop pulls you over you can prove it is documented/part of a ‘legal’ source).
Some will make you sign a waiver so if you get mugged outside the bank, you were warned and it’s not their fault, etc. at some point it’s probably worthwhile to get an armored truck or whatever.
I think he is talking about the reletively high number of people that buy and sell gold for cash as private parity sales.
Generally, I have been gold authenticated by taking the density with a good scale and water displacement. Though that technically could be faked it would be very hard. If you wanted to do it quickly you could probably cut a corner off because the stuff in circulation is normally high enough grade that it's almost soft.
Gold Plated lead would feel off to anyone that's handled gold before from density alone. Gold is nearly twice as dense. That's why it made a great coin in the past. It's far denser than anyother common materials.
Honestly, no need - if you’re going that route, I’d personally want a XRF machine or ultrasound tester at least.
Plenty of reputable shops, and most are more than happy to do cash transactions.
Plenty of reputable shops, and most are more than happy to do cash transactions.
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i've never understood how this would work in these doomsday scenarios. are people going to walk around with scales to weigh the gold for every transaction as well as test the purity of the gold? are they going to mint their own coins? I just don't see how it's supposed to work
I think the idea is that gold is a universally desired good that can be exchange for money or anything of value in any situation or place.
So if you decide to flee the country, five pounds of gold is $150K and can easily be carried in a small backpack. Let's say you keep it in 1 troy oz pieces, so you have 80 of them worth about $1800 each. You can go to any nation on earth, and whatever currency they have, they will be happy to sell it to you for gold. Yes, only in $1800 pieces. That's fine, you can exchange it for whatever local currency is being used as you need it.
You can do this anonymously and privately. You don't need to worry about whether the US dollar has collapsed. Gold does go up and down, but it never goes to zero, and tends to do well in crisis situations and maintain value over the long term. It is not - or shouldn't be viewed as -- an "investment", it's insurance. It costs money.
Moreover even if you do not flee the country, having assets that you possess - true bearer assets -- is superior than assets others hold for you in a custodial account. How secure is your 401K? Secure until congress passes a law to take some of it. How secure is your bank account? It is as secure as someone who can convince the bank to freeze your account or close your account. So having a bit of gold or cash as a type of hedge for unlikely events makes sense to a lot of people.
You have to keep in mind that for a household living in Silesia, between 1880 and 2000, they would have lived through one hyperinflation, two world wars, two revolutions and three uprisings, and four foreign invasions. They would have been ruled by Prussia, Poland, Nazi Germany, Soviet-controlled Poland, finally free Poland. Each of these had their own currency regimes and currency reforms. That household would have been well off having a bit of gold tucked away. They would have been able to trade some of it for food during the Weimar collapse, and to transport some wealth through the dark days of communism -- maybe even bribing someone to let them escape the country with something more useful that worthless zlotys in whichever nation they landed.
So if you decide to flee the country, five pounds of gold is $150K and can easily be carried in a small backpack. Let's say you keep it in 1 troy oz pieces, so you have 80 of them worth about $1800 each. You can go to any nation on earth, and whatever currency they have, they will be happy to sell it to you for gold. Yes, only in $1800 pieces. That's fine, you can exchange it for whatever local currency is being used as you need it.
You can do this anonymously and privately. You don't need to worry about whether the US dollar has collapsed. Gold does go up and down, but it never goes to zero, and tends to do well in crisis situations and maintain value over the long term. It is not - or shouldn't be viewed as -- an "investment", it's insurance. It costs money.
Moreover even if you do not flee the country, having assets that you possess - true bearer assets -- is superior than assets others hold for you in a custodial account. How secure is your 401K? Secure until congress passes a law to take some of it. How secure is your bank account? It is as secure as someone who can convince the bank to freeze your account or close your account. So having a bit of gold or cash as a type of hedge for unlikely events makes sense to a lot of people.
You have to keep in mind that for a household living in Silesia, between 1880 and 2000, they would have lived through one hyperinflation, two world wars, two revolutions and three uprisings, and four foreign invasions. They would have been ruled by Prussia, Poland, Nazi Germany, Soviet-controlled Poland, finally free Poland. Each of these had their own currency regimes and currency reforms. That household would have been well off having a bit of gold tucked away. They would have been able to trade some of it for food during the Weimar collapse, and to transport some wealth through the dark days of communism -- maybe even bribing someone to let them escape the country with something more useful that worthless zlotys in whichever nation they landed.
Great example with Silesia. Funny thing about "worthless zlotys" is that "zloty" is the name of a currency, as well as literally meaning "gold". In this historical case, the latter would have certainly been a more stable store of value.
I understand the rational thinking of gold exchanges. You missed the detail about this being confusion on preppers. If the world has gone to shit (nuclear war, zombies, etc), then gold just isn't that useful. If it was silver, you could at least melt it down and kill the vampires with it.
You're attempting to use logic in a place where there is none.
You're attempting to use logic in a place where there is none.
I don't really understand your point; the fact that preppers have gold and gold didn't help against zombies seems easily explainable by preppers not actually preparing for zombies, but instead far more realistic events including short term social unrest.
I don't see the value of gold if there is widespread chaos. Like a walking dead scenario, gold and diamonds are almost worthless. Guns, food, medical care is what's worth something in that chaotic environment. Of course we aren't defining the environment here.
1) it’s fun to TALK or THINK about some crazy synthetic situation like a walking dead scenario, but not many folks are really thinking about it literally.
2) it’s a lot less fun to talk or think (and may be dangerous to even try) about more realistic issues - like if you’re on the wrong side of the situation in Bosnia or Rawanda.
3) it’s the same kind of general process though, and some of the same tools can be useful to defend, escape, or repel.
And gold and diamonds got a LOT of people out of harms way that otherwise would be dead - at least from the 2 folks I knew that got out of Vietnam with their families when the south fell (and are probably alive today) only because they were able to bribe their way onto the boats using gold.
2) it’s a lot less fun to talk or think (and may be dangerous to even try) about more realistic issues - like if you’re on the wrong side of the situation in Bosnia or Rawanda.
3) it’s the same kind of general process though, and some of the same tools can be useful to defend, escape, or repel.
And gold and diamonds got a LOT of people out of harms way that otherwise would be dead - at least from the 2 folks I knew that got out of Vietnam with their families when the south fell (and are probably alive today) only because they were able to bribe their way onto the boats using gold.
Forget about Walking Dead. Nobody prepares for that. It is a strawman.
Think Argentine 90's hyper-inflation crisis. Think Venezuela economic colapse.
Heck! think Argentina RIGHT NOW.
Think Argentine 90's hyper-inflation crisis. Think Venezuela economic colapse.
Heck! think Argentina RIGHT NOW.
Hyperinflation and concerning political instability worth relocating over can happen without quite reaching the level of a zombie apocalypse.
But is this what preppers are really prepping for? Maybe I'm just too far into the conspiracy theorists and what not, but my personal experience with preppers are way way way futher than fears of social unrest.
Preppers aren't just a bunch of American right-wingers locked up in remote cabins with large stockpiles of food and valuables (although those people certainly exist).
Most of us prepare for short-term disruptions that are far more likely than hordes of undead roaming the streets. If widespread societal collapse should actually happen, then having a strong local community, and knowing how to co-operate and communicate with one's neighbours is far more important than having enough canned tuna to last to Ragnarok and back. That being said, having survival skills and basic supplies can come in handy in a wide range of situations.
Personally, I'm preparing for more basic things like long power outages, extreme weather and supply chain disruptions. Sure, we got food, fuel and supplies for a few months at home, and it's been very handy during the pandemic, while being snowed in for a week a few winters ago, and when being without power for two days last summer -- I could keep working like any other day, and didn't lose any income.
Yes, that includes some cash. It's been handy a few times when the card terminals at the store wasn't working. Storing large piles of it seems an unnecessary risk, though.
Most of us prepare for short-term disruptions that are far more likely than hordes of undead roaming the streets. If widespread societal collapse should actually happen, then having a strong local community, and knowing how to co-operate and communicate with one's neighbours is far more important than having enough canned tuna to last to Ragnarok and back. That being said, having survival skills and basic supplies can come in handy in a wide range of situations.
Personally, I'm preparing for more basic things like long power outages, extreme weather and supply chain disruptions. Sure, we got food, fuel and supplies for a few months at home, and it's been very handy during the pandemic, while being snowed in for a week a few winters ago, and when being without power for two days last summer -- I could keep working like any other day, and didn't lose any income.
Yes, that includes some cash. It's been handy a few times when the card terminals at the store wasn't working. Storing large piles of it seems an unnecessary risk, though.
Near as I can tell it’s a generalized fear they are attempting to address this way, and don’t often really fully understand it or why they are even doing it.
If you think of it however as not needing to be rational, but more or from an evolutionary perspective ‘folks in the past who had similar types of fears and discomfort might have survived prior insane disasters that no one else expected to ever occur’ it might make more sense.
It doesn’t have to be rational. It doesn’t even have to help them survive or be successful most of the time. If it works even a little better and they survive when everyone else died because of their insane paranoia, those genes will propagate.
If you think of it however as not needing to be rational, but more or from an evolutionary perspective ‘folks in the past who had similar types of fears and discomfort might have survived prior insane disasters that no one else expected to ever occur’ it might make more sense.
It doesn’t have to be rational. It doesn’t even have to help them survive or be successful most of the time. If it works even a little better and they survive when everyone else died because of their insane paranoia, those genes will propagate.
Zombies have always been a thinly veiled analogy for fear of the mindless hoard of ‘everyone else’ coming to get you. In my opinion anyway.
And what are X-Men the movies about? Transphobia no doubt
...And this parent post seems to mean, with self-harming rhetoric, that the «veiled analogy» depicted a context of anti-intellectualism - as just written explicilty nearby. Yes, well noted.
The writer probably wanted to subtly refer to relevant Danish-American actress S.J. (a cryptic critique of the frugal accomplished Northern Europe?) in her statement "If I pay bucks for a movie ticket, I do not want to go there and think" (quoted from memory). Too subtle, let us not speak in riddles! (Even that «transphobia», presumably to be read as "fear of [monetary] transactions" - privacy, availability, inflation, currency as a token without intrinsic value: with such obscurity, little of the message can pass.)
The writer probably wanted to subtly refer to relevant Danish-American actress S.J. (a cryptic critique of the frugal accomplished Northern Europe?) in her statement "If I pay bucks for a movie ticket, I do not want to go there and think" (quoted from memory). Too subtle, let us not speak in riddles! (Even that «transphobia», presumably to be read as "fear of [monetary] transactions" - privacy, availability, inflation, currency as a token without intrinsic value: with such obscurity, little of the message can pass.)
Not exactly. It was an analogy for the «mindless hoard» of the conformant - the "silent majority" -, promised a dull excuse for a life, but free of care inside a social system, which «comes to get you» with that promise wanting to assimilate you; more specifically the system would have been consumerism (as in "live to have and purchase"), installed over anti-intellectualism (as was already a very evident trend half a century ago). The revealing moment was the scene in which "ghouls/zombies" drive shopping trolleys.
Romero confirmed the depiction was that of "the revolution", where "the awake" realizes the vast majority is assimilated, but discovers "humanity" inside himself and decides that it is worth fighting to defend it, as the core hidden topic in the original work which provided the inspiration: Richard Matheson's I am Legend.
All of that installed in the social crisis of confusion, incompetence and violence seen as the core aspects of the '60 in the USA.
...Since we are discussing about cash, and surely you wanted to be on topic, I assume you meant to state "ghouls also renounce to privacy", worsening the scenario Romero originally depicted. Well noted.
Romero confirmed the depiction was that of "the revolution", where "the awake" realizes the vast majority is assimilated, but discovers "humanity" inside himself and decides that it is worth fighting to defend it, as the core hidden topic in the original work which provided the inspiration: Richard Matheson's I am Legend.
All of that installed in the social crisis of confusion, incompetence and violence seen as the core aspects of the '60 in the USA.
...Since we are discussing about cash, and surely you wanted to be on topic, I assume you meant to state "ghouls also renounce to privacy", worsening the scenario Romero originally depicted. Well noted.
[deleted]
Modern banking was also basically invented because of this very problem - gold was inconvenient so you had gold coins with insigna's which promised a standard weight of gold and could be reasonably trusted due to being hard to forge.
Which gave way to IOUs from gold smiths, since carrying large amounts of coins was still hard. Which, well, everyone knows the rest.
Which gave way to IOUs from gold smiths, since carrying large amounts of coins was still hard. Which, well, everyone knows the rest.
Right, so again, what do these people think they are solving? There's plenty of logic flaws with the doomsday preppers, but returning to the gold economy is just where I draw the straw. Sure, store all the food, guns/ammo, fuel, water, etc you can, but if the world is that screwed up, we've all seen the movies on how well best laid plans workout.
[deleted]
See my comment above. It doesn’t have to make sense in our current environment for people to do it.
Doing this kind of thing has meant their ancestors survived crazy insane disasters that most others did not, so they are going to keep doing it to some extent no matter what.
Think of it as humanities extra parity bits. Most of the time they’re useless, until they’re the only reason we’re still here.
Doing this kind of thing has meant their ancestors survived crazy insane disasters that most others did not, so they are going to keep doing it to some extent no matter what.
Think of it as humanities extra parity bits. Most of the time they’re useless, until they’re the only reason we’re still here.
Yup, though the minimum ‘buy in’ per unit without getting raked over the coals with high spread products is too high for many people. If you’re trying to set aside $20/wk, silver is terrible and good luck with Gold.
bitcoin
If one truly doesn't need it for day to day expenses and just saving (assuming its at least over $200), one can: buy some btc at a walmart coinstar kiosk[0] with the cash (or any other cash for bitcoin methods that has been around since ~2009), sell it for eth with bisq network[1], bridge it to avalanche[2] for weth.e and sell for dai.e (decentralized overcollateralized stablecoin to the $) and at least 1 avax (for future gas costs, you can get away with holding less if one watches the fees), and put the dai.e in yieldyak benqi farm[3] (decentralized non custodial overcollateralized protocol) for over %20 APY in dai.e?
Might loose a bit to fees getting it on chain(s) (though less than intl money transfers if one is used to that), but should make it back pretty quickly.
[0] https://www.reuters.com/business/walmart-allowing-some-shopp...
[1] https://github.com/bisq-network/bisq
[2] https://bridge.avax.network/
[3] https://yieldyak.com/farms?platform=benqi
Might loose a bit to fees getting it on chain(s) (though less than intl money transfers if one is used to that), but should make it back pretty quickly.
[0] https://www.reuters.com/business/walmart-allowing-some-shopp...
[1] https://github.com/bisq-network/bisq
[2] https://bridge.avax.network/
[3] https://yieldyak.com/farms?platform=benqi
Place in a fire/water resistant bag 90% cash, 10% Bitcoin.
In the event of hyperinflation the Bitcoin will hopefully gain (or at least preserve value)-- and it can be transferred online, which the cash cannot. (And in the event of a total bitcoin collapse you still have 90%). Re-balance it once a year or so.
It doesn't take much to make missing out on the 0.5% interest rate of a high rate savings account into not much of a problem.
In the event of hyperinflation the Bitcoin will hopefully gain (or at least preserve value)-- and it can be transferred online, which the cash cannot. (And in the event of a total bitcoin collapse you still have 90%). Re-balance it once a year or so.
It doesn't take much to make missing out on the 0.5% interest rate of a high rate savings account into not much of a problem.
And bitcoin ATMs that spit out cash are becoming more common if you've been cut off from using traditional banking services and need physical cash, even if the spreads they offer are currently exorbitant.
5% on an ATM in Hong Kong. I'd say that's reasonable.
That isn't limited to cash, though, as the money in the bank would have the same loss.
It's not a disadvantage if savings accounts pay close to 0%.
> A lot of people find it prudent to have a buffer of cash
Cash is always more trustworthy than a bank, if you can ensure its safety. Many people during the greek "crisis" (eg. when the Greek government took money from the people to distribute to the foreign Troïka under the pretext of a misrepresented "debt") wish they had not stored their money in banks.
> 2. Crime. Sure, crime is conducted in cash
I don't have stats, but i think you'd be surprised how much of crime does not use cash. I mean sure, drug trafficking probably involves cash at all levels, but the most serious crimes committed by people in power don't. These people bank-wire funds to remote accounts, as exemplified in the Pandora (and previous) leaks.
Also worth pointing out, cash is the money of the poor. Even when you're too poor/indebted for banks to open an account for you, you can still handle cash daily to survive. Even when you have a bank account, you can usually withdraw your cash before being seized, because money seizures usually take at least a day. So, say your corrupt government/justice has indebted you to a boss/landowner for incredible sums: even if you earn your wage via bank transfer, keeping it in cash is your only option to avoid feeding the insanely-rich and eating dirt yourself.
Cash is always more trustworthy than a bank, if you can ensure its safety. Many people during the greek "crisis" (eg. when the Greek government took money from the people to distribute to the foreign Troïka under the pretext of a misrepresented "debt") wish they had not stored their money in banks.
> 2. Crime. Sure, crime is conducted in cash
I don't have stats, but i think you'd be surprised how much of crime does not use cash. I mean sure, drug trafficking probably involves cash at all levels, but the most serious crimes committed by people in power don't. These people bank-wire funds to remote accounts, as exemplified in the Pandora (and previous) leaks.
Also worth pointing out, cash is the money of the poor. Even when you're too poor/indebted for banks to open an account for you, you can still handle cash daily to survive. Even when you have a bank account, you can usually withdraw your cash before being seized, because money seizures usually take at least a day. So, say your corrupt government/justice has indebted you to a boss/landowner for incredible sums: even if you earn your wage via bank transfer, keeping it in cash is your only option to avoid feeding the insanely-rich and eating dirt yourself.
I live in Venezuela and we've had forex controls for 2 decades now.
Our currency has also depreciated massively over the years to the point of being useless.
We've unofficially dollarized a lot of cash operations so I bet a bunch of it is here.
Cuba and Argentina have similar forex controls.
This is probably the case all over the world.
Our currency has also depreciated massively over the years to the point of being useless.
We've unofficially dollarized a lot of cash operations so I bet a bunch of it is here.
Cuba and Argentina have similar forex controls.
This is probably the case all over the world.
I always wondered, how is the unofficial USD rate set there?
Just day to day or do you have an app or something that the people follow?
Just day to day or do you have an app or something that the people follow?
Argentinians have a lot of cash that they (we) use as an edge against inflation
I assume you mean USD cash to hedge against inflation of Argentinian pesos?
Not OP, but your assumption is valid with a high degree of confidence since holding a currency experiencing inflation is a net negative. USD is commonly used as a store of value in those situations.
[deleted]
The economist has been killing me for a long time. They use to have what I thought were good articles or maybe i was just less informed although I don’t think that has changed in the past 2 years when i noticed a huge drop in quality.
If anyone has any good news sources please let me know. The economist was the last thing i was reading before it stopped putting out quality content.
If anyone has any good news sources please let me know. The economist was the last thing i was reading before it stopped putting out quality content.
I know what you mean. In my case also, I think it is a combination of me being better informed about the world and the economist declining somewhat over time. BUT I started reading it 25 years ago, and still do read it a bit.
In terms of other news sources - I have no great advice. Here in the uk, I read the Financial Times - it is also rather international - maybe have a look at it. I would say that it is ok rather than great - but it is nice to get your news from more than one place. Private Eye is excellent, but mainly just for a subset of uk news.
I would like to have one "go-to" news source that I could rely on. But that is apparently not possible. So I read a few different things, and try to judge from their different stories what is really going on. Interestingly, I find that hn is a good source of quality information and insight, although it (of course) doesn't cover everything that I want to know about.
In terms of other news sources - I have no great advice. Here in the uk, I read the Financial Times - it is also rather international - maybe have a look at it. I would say that it is ok rather than great - but it is nice to get your news from more than one place. Private Eye is excellent, but mainly just for a subset of uk news.
I would like to have one "go-to" news source that I could rely on. But that is apparently not possible. So I read a few different things, and try to judge from their different stories what is really going on. Interestingly, I find that hn is a good source of quality information and insight, although it (of course) doesn't cover everything that I want to know about.
> So this whole article is complaining that 2% of currency is not circulating.
And 40% of US dollars in existence were printed in the last 12 months: https://techstartups.com/2021/05/22/40-us-dollars-existence-...
And 40% of US dollars in existence were printed in the last 12 months: https://techstartups.com/2021/05/22/40-us-dollars-existence-...
> Instead of spending the money on food, savings, or paying off debts, some people invested their stimulus checks in stocks (GameStop, etc.), and cryptocurrencies like bitcoins further driving up their prices.
I've never thought about rising stock prices as inflation before.
I've never thought about rising stock prices as inflation before.
I think that we have some artificial inflation because of supply chain issues and all cargo ships sitting in the Pacific ocean waiting to be unloaded. But I don't see why stock prices should not raise with everything else.
If we read into this article as pushing an agenda, then the agenda is probably written here. https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-nega...
Almost all US banks have had upside down Texas ratios since 2000. Used to be savings accounts paid the rate of inflation, but not paying inflation and driving investments into riskier classes is the way they are driving revenue to pay off their bad debts.
With covid, the likelihood of bank failures has risen considerably as the savings money is drying up or moving out of cities and investment risks have raised considerably. Historically, whenever banks got systemically over-levered and they try to avoid a systemic banking collapse, they come for the commoners assets. Last time around they did gold confisaction. I remember in 08 they were talking about confiscating 401k money into the stock market.
This is no different. This is a creepy article full of trite anecdotes and observational BS that demonizes anyone that uses cash as a drug dealer or sex trafficker and doesn't mention the root issue.
With covid, the likelihood of bank failures has risen considerably as the savings money is drying up or moving out of cities and investment risks have raised considerably. Historically, whenever banks got systemically over-levered and they try to avoid a systemic banking collapse, they come for the commoners assets. Last time around they did gold confisaction. I remember in 08 they were talking about confiscating 401k money into the stock market.
This is no different. This is a creepy article full of trite anecdotes and observational BS that demonizes anyone that uses cash as a drug dealer or sex trafficker and doesn't mention the root issue.
Downplaying is being "only" 2% of currency in circulation is really strange. It is 2% of currency in circulation of the world's largest economy and the de facto international currency. The US accounts for almost 16% of the GLOBAL GDP when adjusted for PPP.
I guess people just love to be contrarians on HN.
I guess people just love to be contrarians on HN.
50,000 million? Yes, that's broader economy chump change. But, toss it in a suit case, move it off shore, and the magnitude increases (especially if it's a corruption tool). I think the question is: how does the current % size up historically? (I wasn't able to read the whole article.)
All noncash methods of payment have strings attached where consumers and merchants alike are subject to various controls and costs. Cash is simple, exchange something in your posession for goods and services. It cannot be used as a means of identity based regulation or to audit who is buying what from whom. I mean, bitcoin exists because of how unacceptable this is to everyone but the middlemen, bureaucrats and purse clutchers. It seems a bit obvious but I wanted to stress on this point that a cash resurgence could just mean market participants wanting more liberty.
Oddly - cash can be, and appears to be, widely tracked. Many ATMs scan serial numbers of bills, and network analysis of that data can be VERY informative.
Do you have a source? How valuable is knowing the serial number of an ATM dispensed bill?
Very little cash is deposited into an ATM. Any time I’ve deposited cash I’ve never seen it scanned (it goes into the drawer).
And if it were scanned at multiple points think of the cash in a register at a store? How many transactions does it go through before getting scanned again? Especially smaller bills?
Seeing that a bill was dispensed at an ATM on Market St in San Francisco then deposited by a restaurant in San Mateo 1 month later tells you what exactly?
Very little cash is deposited into an ATM. Any time I’ve deposited cash I’ve never seen it scanned (it goes into the drawer).
And if it were scanned at multiple points think of the cash in a register at a store? How many transactions does it go through before getting scanned again? Especially smaller bills?
Seeing that a bill was dispensed at an ATM on Market St in San Francisco then deposited by a restaurant in San Mateo 1 month later tells you what exactly?
Some merchants can deposit their cash through certain ATMs. Maybe they scan cash confiscated from criminals.
Getting insight from someone's cash transaction over time, in aggregate, is an excercise in statistics and probably yields many interesting and surprising results.
Getting insight from someone's cash transaction over time, in aggregate, is an excercise in statistics and probably yields many interesting and surprising results.
IIRC research showed that most large bills really were in circulation for 1 transaction only. As in, withdrawn from ATM, paid for something, deposited by the merchant at the end of the same day. Only small bills given out as change stay in circulation; but small bills constitute a tiny fraction of the total money circulation.
[https://www.hyundaimib.com/tech-guide/ocr/]
Up to the bank as to what level of detail they record and where the data goes, but the sensors are usually there.
If you know 100 people pulled cash out of various amounts over time, and 1 person deposited $100 from each of them - that tells you 100 people all made nearly the same purchase of something around $100 from that person correct?
Even better if some portion of those funds sometimes end up in someone else’s pocket.
It’s mainly useful for detecting black and grey market activity, like someone selling drugs or sex work or whatever, and people working with them directly. Look at it Over long enough and you could probably identify almost all of the business associates and regular customers.
Same tricks are used to track Bitcoin.
That said, not usually worth it for anyone to do this, and it isn’t disclosed how common scanning or tracking this way is done (and some banks deny it), so your mileage may vary depending on your level of paranoia.
Up to the bank as to what level of detail they record and where the data goes, but the sensors are usually there.
If you know 100 people pulled cash out of various amounts over time, and 1 person deposited $100 from each of them - that tells you 100 people all made nearly the same purchase of something around $100 from that person correct?
Even better if some portion of those funds sometimes end up in someone else’s pocket.
It’s mainly useful for detecting black and grey market activity, like someone selling drugs or sex work or whatever, and people working with them directly. Look at it Over long enough and you could probably identify almost all of the business associates and regular customers.
Same tricks are used to track Bitcoin.
That said, not usually worth it for anyone to do this, and it isn’t disclosed how common scanning or tracking this way is done (and some banks deny it), so your mileage may vary depending on your level of paranoia.
The great thing about cash is you can use it everywhere, not just for things you want to keep on the down low.
You take that fat stack of bills you made selling dime bags and you go to Walmart and you buy groceries with it or whatever. Only the things that require a non-cash method of payment need to involve the banking system. Even then you can buy prepaid visa gift cards to handle most of those case if you're ok with the inconvenience.
You take that fat stack of bills you made selling dime bags and you go to Walmart and you buy groceries with it or whatever. Only the things that require a non-cash method of payment need to involve the banking system. Even then you can buy prepaid visa gift cards to handle most of those case if you're ok with the inconvenience.
Hard to do that with a million/month though (like the local dispensary seems to do)
But how would they track spending then?
Cash transactions have different ‘controls’ rather than being simple, like:
Do I feel safe being near you? Do I feel safe letting you know I have money at all? Will you retain product after payment?
Cash is a transaction mechanism that no outside party can block. A power out can't; a failed computer or a network outage can't; even a government can't. That has a certain charm.
Yes, articles like this one can become inadvertent advertisements for the benefits of cash.
What's wrong with cash?
I always have cash because the bank, at any point, can decide to freeze my account until I show up in person with some arbitrary ID/documents and beg on my knees.
That's the reality for most people and they don't even realize it.
I guess once you have enough money it's different, but for an average non-millionaire chump, it's best not to trust anyone too much.
That's the reality for most people and they don't even realize it.
I guess once you have enough money it's different, but for an average non-millionaire chump, it's best not to trust anyone too much.
That's why i personally have a few bank accounts in different banks, with cards on different networks. The risk of a banking/network error is significantly lower that way.
> The risk of a banking/network error is significantly lower that way.
The risk of a banking/network error is significantly higher that way, although the risk that it affects all deposited funds is significantly lower.
The risk of a banking/network error is significantly higher that way, although the risk that it affects all deposited funds is significantly lower.
I remember reading a while back that at some point at the beginning of our time in Afghanistan, at some point we shipped multiple pallets of bundled $100 dollar bills and we had no idea where any of it went
https://www.theguardian.com/world/2007/feb/08/usa.iraq1
https://www.theguardian.com/world/2007/feb/08/usa.iraq1
Why, as kickbacks to the future taliban government, a.k.a the former democratic leadership of Afghanistan, of course.
We have a habit of doing that:
https://www.cnn.com/2016/08/03/politics/us-sends-plane-iran-...
https://www.cnn.com/2016/08/03/politics/us-sends-plane-iran-...
This isn't the same at all, other than it's a lot of money going somewhere in the middle east.
It was their own money being returned to them and not pallets earmarked for development disappearing into the night.
It was their own money being returned to them and not pallets earmarked for development disappearing into the night.
Well that's the official story. The ulterior is it was basically a ransom payment for hostages released at the same time.
But really I was just noting how we love sending pallets of cash to our adversaries.
We have no way of knowing how they spent those pallets of bank notes in either exchange.
The whole point was our government loves to use cash in deals yet label civilians with too much cash as criminals!
But really I was just noting how we love sending pallets of cash to our adversaries.
We have no way of knowing how they spent those pallets of bank notes in either exchange.
The whole point was our government loves to use cash in deals yet label civilians with too much cash as criminals!
The former was not sending pallets of cash to our adversaries.
Agreed that asset forfeiture should be illegal.
Agreed that asset forfeiture should be illegal.
> then distributed the cash with no proper control over who was receiving it and how it was being spent.
> Some of the funds could have enriched both criminals and insurgents fighting the United States.
Literally in the article GP linked. You could argue that we don't know for sure, but the point is the US sends cash around willy nilly that can easily fall in the hands of terrorists while treating Americans like criminals if they have anything above pocket change.
> Some of the funds could have enriched both criminals and insurgents fighting the United States.
Literally in the article GP linked. You could argue that we don't know for sure, but the point is the US sends cash around willy nilly that can easily fall in the hands of terrorists while treating Americans like criminals if they have anything above pocket change.
They are circulating in places beyond the borders, I assume. We let North Korea print their own$100 bills for years as a form of off the books aid, but once that stopped the underworld needed someone to provide the currency.
Remember the pallets of cash being sent to Iraq?
Remember the pallets of cash being sent to Iraq?
I had to Google the north korea thing.
https://en.wikipedia.org/wiki/Superdollar
TIL. Thanks!
https://en.wikipedia.org/wiki/Superdollar
TIL. Thanks!
I'd just note a full read of the article shows that the origin of the bills is apparently quite murky and North Korea is just one of several accused sources. Israel blames Syria, some US media blames the CIA. Nothing is proven and nothing is certain.
>"blames the CIA"
I cannot believe people would dare suggest that such an upstanding organization would do such a thing. For shame! /s
I cannot believe people would dare suggest that such an upstanding organization would do such a thing. For shame! /s
The most interesting part of that article was this:
> On 21 December 2011, the Irish High Court dismissed the US application for Garland's extradition,[4][25] as the alleged offence took place in Ireland and was therefore not subject to extradition.
I wonder why the UK doesn't have that clause but Ireland does?
> On 21 December 2011, the Irish High Court dismissed the US application for Garland's extradition,[4][25] as the alleged offence took place in Ireland and was therefore not subject to extradition.
I wonder why the UK doesn't have that clause but Ireland does?
> We let North Korea print their own $100 bills for years as a form of off the books aid
That's very hard to believe. Citation needed!
That's very hard to believe. Citation needed!
See previous "Super Bill" Wikipedia link comment.
It happened/may still be happening for all we know.
It happened/may still be happening for all we know.
The wikipedia article could in no way be summarized as "we let Korea print $100 bills". A first sentence is "A superdollar (also known as a superbill or supernote) is a very high quality counterfeit United States one hundred-dollar bill,[1] alleged by the U.S. Government to have been made by unknown organizations or governments". The body of article follows this. Only dubious allegation that North Korea (among several groups) print them and no allegations that the US allowed this.
Link if it gets lost: https://en.wikipedia.org/wiki/Superdollar
Link if it gets lost: https://en.wikipedia.org/wiki/Superdollar
Well, it's like saying "we let organized crime run rampant", implying there's a choice to stop it.
Which I now realize might be true...
Which I now realize might be true...
Outside hot-war which would result in massive casualties in SK, there is very little more that can be done to NK...
So there being no choice is probably correct in this case. At least with other countries there is some ways pressure them, with NK not too much, and not for measly sums of money involved.
So there being no choice is probably correct in this case. At least with other countries there is some ways pressure them, with NK not too much, and not for measly sums of money involved.
It's also ridiculously hard to get spies inside of North Korea. Covert action is incredibly difficult. Imagine trying to train a South Korean to blend in when they are a foot taller due to sufficient nutrition.
This month, G7 finance ministers released a policy paper on Central Bank Digital Currencies, https://www.gov.uk/government/publications/g7-public-policy-...
> When designing CBDCs, public authorities should look to build in ways of countering fraud and other forms of illicit finance by looking to incorporate advancements in technology and/or innovative solutions that may improve the authentication and verification of transactions.
> Public authorities’ powers and use of data in any CBDC ecosystem to counter their use for illicit finance should be set out transparently in national legislative frameworks (see Principle 2) and those powers should not be used for other purposes.
We can expect bank lobbying in G7 countries for new legal kill-switch, data harvesting and analytics powers to "authenticate and verify" EVERY transaction that uses a national CBDC. Since CBDCs are scheduled for deployment by 2025, the pre-requisite national legislation would be needed by 2023.
> When designing CBDCs, public authorities should look to build in ways of countering fraud and other forms of illicit finance by looking to incorporate advancements in technology and/or innovative solutions that may improve the authentication and verification of transactions.
> Public authorities’ powers and use of data in any CBDC ecosystem to counter their use for illicit finance should be set out transparently in national legislative frameworks (see Principle 2) and those powers should not be used for other purposes.
We can expect bank lobbying in G7 countries for new legal kill-switch, data harvesting and analytics powers to "authenticate and verify" EVERY transaction that uses a national CBDC. Since CBDCs are scheduled for deployment by 2025, the pre-requisite national legislation would be needed by 2023.
People that live in countries with unstable or collapsed currencies use USD (I assume the same of Euros and GBP) as well. Everyone in Cuba wants USD now for example. It isn’t for money laundering or terrorism, it is for toothpaste and clothing. I imagine Euros are popular in Turkey these days.
I don’t know how you write an article on this subject and don’t mention this. Argentina, Venezuela, etc. USD/EUR cash is how people save/avoid inflation.
Plus USD is the official (?) currency in Panama, and de facto currency in half the Caribbean.
Not to mention the western governments have been shipping cash by the plane load into conflict zones to pay off war lords and other leaders
Plus USD is the official (?) currency in Panama, and de facto currency in half the Caribbean.
Not to mention the western governments have been shipping cash by the plane load into conflict zones to pay off war lords and other leaders
Also extremely common in Myanmar and much of Africa. It is literally considered the WORLD reserve currency.
The more turmoil in economies abroad, the more USD is in demand to replace failing currencies.
Turkey is a great example - people were paying a premium on USD just to get their savings out of Turkish Lira a couple years ago.
The more turmoil in economies abroad, the more USD is in demand to replace failing currencies.
Turkey is a great example - people were paying a premium on USD just to get their savings out of Turkish Lira a couple years ago.
Supply chains are disrupted everywhere, wouldn't it be a quite reasonable precaution to have a large amount of cash on hand, like having a months worth of toilet paper, just in case? Running out of either is not fun.
I also have 1 real US dollar that I keep in my wallet as a reminder, it was minted in New Orleans in 1901, it's 120 years old, and can't be inflated away like Johnson sandwiches or paper money.
I also have 1 real US dollar that I keep in my wallet as a reminder, it was minted in New Orleans in 1901, it's 120 years old, and can't be inflated away like Johnson sandwiches or paper money.
> This seemingly counterintuitive paradox can be explained by demand for banknotes as a store of value in the euro area coupled with demand for euro banknotes outside the euro area,” the ECB’s analysis concluded. Strip away the jargon and it’s just another way of saying that people want banknotes because people want banknotes.
I think they missed the point massively in this article, the ECB comment is pretty self explanatory.
What they mean here is that other central banks (Japan and China for instance) and autocrats (and not gangsters at least not significantly) prefer keeping their foreign currency in cash despite the extra costs because western countries have the annoying habit to lock foreign electronic funds on a whim.
I think they missed the point massively in this article, the ECB comment is pretty self explanatory.
What they mean here is that other central banks (Japan and China for instance) and autocrats (and not gangsters at least not significantly) prefer keeping their foreign currency in cash despite the extra costs because western countries have the annoying habit to lock foreign electronic funds on a whim.
I guess we live in a time when cash is now a scary thing. This is kind of funny... And makes me feel old.
No this probably is astroturfing a fear of what is being done with cash, try to make it seem like having cash is not normal and only for crime, then government can ban it to gain more complete control on monetary system and all transaction.
There is the interesting history of Mansa Musa whose lavish spending of gold caused a recession. So it's not like gold is an absolutely safe asset either. It's possible we will find much more gold in Earth's mantle or on some asteroids. Then what?
https://en.wikipedia.org/wiki/Mansa_Musa#Islam_and_pilgrimag...
https://en.wikipedia.org/wiki/Mansa_Musa#Islam_and_pilgrimag...
Europe had the Great Bullion Famine in the 15th century causing deflation across the continent, which was ended by the Spanish flooding Europe with gold from the Americas, causing massive inflation instead.
https://en.wikipedia.org/wiki/Great_Bullion_Famine
A long period of deflation followed by a long period of over-inflation doesn't scream stability to me.
https://en.wikipedia.org/wiki/Great_Bullion_Famine
A long period of deflation followed by a long period of over-inflation doesn't scream stability to me.
I don't know why the article frames it as some crazy big mystery and tries to come up with different hypotheses for it throughout. The answer is clear from the very first example they start with, and explained further towards the end – the cash is circulating in the grey/black market economy and across international borders. Demand for cash is rising because this economy is growing at a similar rate to the regular one.
As for the "why does nobody care part", the possible explanation is unconvincing. Yes central banks enjoy the power of being the sole issuer of currency, but the few cents per note they get to keep is hardly where their real interests lie.
As for the "why does nobody care part", the possible explanation is unconvincing. Yes central banks enjoy the power of being the sole issuer of currency, but the few cents per note they get to keep is hardly where their real interests lie.
Or it could be kind of "propoganda" / PR from the people who are proponents of a cashless society. An assassination of cash in the media would be the logical place to start.
I have like $200 cash just sitting in my room for years in case I need it for something that doesn’t take debit or credit like a carnival trip (I haven’t carried cash, ever, in years).
I wonder how many others do the same? It adds up I imagine.
I wonder how many others do the same? It adds up I imagine.
I have a cash stash in my car for this very reason. I can't count the number of times it got me out of deep crap. When you are on an outdoors expedition in the middle of nowhere, you can lose your wallet, your phone might lose signal, you will find rural services that only take cash.
Always having the money for a full tank of gas and a night of cheap accommodation can prevent those very bad decisions and situations where you need to call the local authorities to rescue you, or worse. It's a bona fide survival technique for the modern world.
Always having the money for a full tank of gas and a night of cheap accommodation can prevent those very bad decisions and situations where you need to call the local authorities to rescue you, or worse. It's a bona fide survival technique for the modern world.
probably does add up, but... there's loads of folks with no cash... which might balance it out...?
i've got ... ~$1000/cash in the house. There's an occasional consideration of regional power outages where we might need to leave the area for a day or two (has happened yet, but we came close twice). Mostly useful to pay handyman/lawn guys now and then, then top it up now and then. Have considered holding on to a bit more, but we've never really needed more than a few hundred at any one point, so not sure there's much utility.
i've got ... ~$1000/cash in the house. There's an occasional consideration of regional power outages where we might need to leave the area for a day or two (has happened yet, but we came close twice). Mostly useful to pay handyman/lawn guys now and then, then top it up now and then. Have considered holding on to a bit more, but we've never really needed more than a few hundred at any one point, so not sure there's much utility.
I keep much more cash than that in case there is a problem with electricity or the bank networks or my electronic accounts get seized.
Wouldn't that be accounted for already? You withdrew that from a bank.
Oh perhaps. Maybe I misunderstand the situation but I thought if it wasn’t being circulated for years it would be considered unaccounted for.
Nothing is strange here. Interest rates are dull and Sleepy Joe is about to spy on everything over $599, so money are much safe in the wall safe. That is, not every American can afford offshore banking services.
I like to use cash for the privacy.
If you are concerned about giving your data to Facebook, then you should also be concerned about giving your data to the banks. I'd argue that the banks have more important information on you, and you never known who they share it with
If you are concerned about giving your data to Facebook, then you should also be concerned about giving your data to the banks. I'd argue that the banks have more important information on you, and you never known who they share it with
I like to use cash for the bribery. Not the illegal/corrupt kind, but the little things. Like not having to wait for a table at a restaurant, or having my valeted car already at the curb when I walk out. There will always be a place for cash.
Exactly! Cash is king in this. You can just slip it under, no need for anyone to carry electronic terminals and fiddling with buttons or touch screens.
And also vending machines! (Especially when you're a tourist in another country.)
And also vending machines! (Especially when you're a tourist in another country.)
Billions of new banknotes are printed every day. Why does nobody care?
Amusing most people I know only use cash for drug dealers. Even my mom stopped using cash when the pandemic hit. But I am located in a stable country so mileage may vary.
J. P. Koning noticed this a year ago - he blames crooks having a hard time laundering money in pandemic lockdowns. https://jpkoning.blogspot.com/2020/07/how-pandemic-has-clogg...
I find it strange that people trust the banks with their money, given their history and their behavior.
Deposit insurance?
https://en.wikipedia.org/wiki/Deposit_insurance
It seems like most countries have an equivalent of FDIC.
https://en.wikipedia.org/wiki/Deposit_insurance
It seems like most countries have an equivalent of FDIC.
In my opinion the deposit insurance programs are ok but the way they are financed basically begs banks to be insolvent because eventually the government chips in and that's where they end up making their guaranteed profits.
what's the alternative? there's a small risk that the bank screws me at some point, but if I don't make some kind of positive EV investment with my savings, it's a near guarantee that I'll never be able to retire.
I trust the bank more than I trust my mattress.
All risks are relative.
All risks are relative.
Wells Fargo recently charged me $12 to deposit $9,000 cash. I have more cash, but why would I deposit it if they take it? I can use it to get discounts from service companies instead.
Transacting in cash isn't as "free" as many people like to think. There are real costs associated with processing, transporting, and securing it that someone has to pay.
What if it's simpler than that.
People still use cash, but most of the "money" is tied up in finance's parasitism. So while the amount of e-cash has skyrocketed, cash is still circulating and in high use/demand among the people. I know that for facebook marketplace/craiglist I exclusively use cash... when I buy something from my neighbors or go to a non-chain market I go out of my way to use cash since it saves on transaction fees (and taxes, lol.)
I buy and restore classic cars as a hobby and I always buy/sell them in cash if I can.
People still use cash, but most of the "money" is tied up in finance's parasitism. So while the amount of e-cash has skyrocketed, cash is still circulating and in high use/demand among the people. I know that for facebook marketplace/craiglist I exclusively use cash... when I buy something from my neighbors or go to a non-chain market I go out of my way to use cash since it saves on transaction fees (and taxes, lol.)
I buy and restore classic cars as a hobby and I always buy/sell them in cash if I can.
Any link without the paywall?
Cash is king. Totally anonymous, easy to carry and works when there’s no power grid. Long live cash.
I hope to see the day we ban cash. Here in Sweden, it's almost there.
It's pretty much only used by tax dodgers and criminals here now.
It's pretty much only used by tax dodgers and criminals here now.
Next door, in Norway, the Norwegian bank is quite clear that accepting cash is required for every shop and failure to do so will be punished (unmanned kiosks and vending machines seems to be allowed though).
I'm actually in favour of that, not because I fear my current government but because it
- is convenient (much better than gift cards)
- feels good to be able to buy stuff without telling my bank and Google and who knows who else what I buy
- the banks reason is because it might be necessary in emergencies which also seems like a really good reason.
I'm actually in favour of that, not because I fear my current government but because it
- is convenient (much better than gift cards)
- feels good to be able to buy stuff without telling my bank and Google and who knows who else what I buy
- the banks reason is because it might be necessary in emergencies which also seems like a really good reason.
But banning cash, stops all petty crime, tax evasion, drug dealing, etc. immediately.
It's such a great solution and we're so close!
No-one will rob you when you have no cash to take, and they can't sell your phone anywhere since it could be traced (and the phone is now locked out and banned via IMEI, etc.).
Technology could make society so much safer, so easily.
And cards can work offline in an emergency, like they do on aeroplanes. Just normal shops would need to have this capability.
It's such a great solution and we're so close!
No-one will rob you when you have no cash to take, and they can't sell your phone anywhere since it could be traced (and the phone is now locked out and banned via IMEI, etc.).
Technology could make society so much safer, so easily.
And cards can work offline in an emergency, like they do on aeroplanes. Just normal shops would need to have this capability.
> But banning cash, stops all petty crime,
Do you really think criminals would give up this easy? Or go on to steal jewelry, watches, demand you buy gift cards as extortion or payment for stolen goods etc?
> tax evasion,
I'm fairly certain most significant tax evasion happens without any cash already.
> drug dealing, etc. immediately.
Again, do you really think this?
As mentioned above criminals doesn't have a history of just putting up a sad face and start doing something useful instead.
By the way, the more I learn the more I think we should end prohibition of more drugs, just like we did with alcohol. That could actually put a sad face on a number of criminals.
Do you really think criminals would give up this easy? Or go on to steal jewelry, watches, demand you buy gift cards as extortion or payment for stolen goods etc?
> tax evasion,
I'm fairly certain most significant tax evasion happens without any cash already.
> drug dealing, etc. immediately.
Again, do you really think this?
As mentioned above criminals doesn't have a history of just putting up a sad face and start doing something useful instead.
By the way, the more I learn the more I think we should end prohibition of more drugs, just like we did with alcohol. That could actually put a sad face on a number of criminals.
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> banning cash, stops all petty crime, tax evasion, drug dealing, etc. immediately.
Is this sarcastic? You do realize the vast majority of tax evasion happens through banks right? Like African dictators stashing dirty money in European or Swiss Banks, or Mexican druglords using HSBC to launder money. Specifically in scandinavia:
> the leaks with the detailed administrative records of wealth, income, and taxes paid that Norway, Sweden, and Denmark maintain to offer a detailed portrait of tax evasion in the three Nordic countries. The findings are fairly shocking. Throughout the three countries, about 3 percent of all personal taxes are avoided. But among those with more than $40 million in assets — not the top 1 percent but the top 0.01 percent — about 30 percent of taxes are evaded [0]
Do you think the top 0.01% avoid their 30% of taxes by carrying cash?
What about drug dealing with cryptocurrency? Or petty crime with credit card copying? How would banning cash make a material difference?
[0] https://www.vox.com/2017/6/7/15745978/tax-evasion-zucman
Is this sarcastic? You do realize the vast majority of tax evasion happens through banks right? Like African dictators stashing dirty money in European or Swiss Banks, or Mexican druglords using HSBC to launder money. Specifically in scandinavia:
> the leaks with the detailed administrative records of wealth, income, and taxes paid that Norway, Sweden, and Denmark maintain to offer a detailed portrait of tax evasion in the three Nordic countries. The findings are fairly shocking. Throughout the three countries, about 3 percent of all personal taxes are avoided. But among those with more than $40 million in assets — not the top 1 percent but the top 0.01 percent — about 30 percent of taxes are evaded [0]
Do you think the top 0.01% avoid their 30% of taxes by carrying cash?
What about drug dealing with cryptocurrency? Or petty crime with credit card copying? How would banning cash make a material difference?
[0] https://www.vox.com/2017/6/7/15745978/tax-evasion-zucman
But the banks can be forced to open up their accounts and transaction details.
Cryptocurrency-Fiat exchanges should also be banned. You can't copy credit cards in Europe due to the chip on the card.
These problems have largely technical solutions, we just need to stop fearing technology.
Cryptocurrency-Fiat exchanges should also be banned. You can't copy credit cards in Europe due to the chip on the card.
These problems have largely technical solutions, we just need to stop fearing technology.
> These problems have largely technical solutions, we just need to stop fearing technology.
Ego of the coder
Ego of the coder
"No-one will rob you when you have no cash to take" Except... the bank and your government.
Must be nice to never expect your government to turn against you.
1. Precautionary savings. In a low interest rate environment, there is not the same penalty for holding cash as getting interest in a savings account. A lot of people find it prudent to have a buffer of cash, say enough to cover 1 month of expenses. So cash withdrawn from an ATM but put into a piggybank or under the mattress will appear here as "missing". If you want to change the situation, then raise interest rates and increase law and order.
2. Crime. Sure, crime is conducted in cash, and a lot of that money is funneled to Latin America. This is a known thing -- it's more seignorage income for the Fed unless the cash comes back into the economy, but much of it never will as several economies are dollarized. I don't think there has been a material increase in organized crime, so I would think household precautionary savings is the reason.
3. Let's get some perspective. $50 Billion in cash is basically nothing. It's like 2% of currency in circulation. So this whole article is complaining that 2% of currency is not circulating. Well, OK. Must be a slow day over at the Economist.
https://fred.stlouisfed.org/series/WCURCIR