Another little step towards a cashless society.

[jansman]

I think the concerns about a cashless system are many and varied ( we seem to have voiced them all? here).There are murmurings of trouble ahead in the banking sector regarding personal debt right now.In late 2007 we had the same about 'sub- prime ' mortgage lending in the USA.Of course ,when Northern Rock went bang, there was a run on the bank.Nobody at that stage,( except probably the Banksters) knew the extent to which UK banks were hooked up with dodgy lending.

To me,it looks as though we may have another kind of 'Credit Crunch' before long.What it's intensity may be,who knows? But one thing is for certain; We are in a low wage economy, and everyone is driving around in brand new motors,with the latest smart phones and Gizmos.That's borrowed money,for sure.

Imagine a cashless system in those circumstances. At least now you can withdraw your cash,and use it as a trading medium.If the system was cashless and it went bang, what then?

[grenfell]

Imagine a cashless system in those circumstances. At least now you can withdraw your cash,and use it as a trading medium.If the system was cashless and it went bang, what then?

Cynical head on , government of the day will do all they can to cover themselves in glory , "no bank runs on our watch" for instance and knight in shinning armour style saving the society and all the people in it by firm and fair allocation of resources "no one starves , minimum distruption and all back on track as quickly as possible"

[jansman]

Imagine a cashless system in those circumstances. At least now you can withdraw your cash,and use it as a trading medium.If the system was cashless and it went bang, what then?

Cynical head on , government of the day will do all they can to cover themselves in glory , "no bank runs on our watch" for instance and knight in shinning armour style saving the society and all the people in it by firm and fair allocation of resources "no one starves , minimum distruption and all back on track as quickly as possible"

Another cynical head on: We currently have 200 and more folks homeless from one tower block.The PTB can't even sort that! Let alone close on 65 million folks that cannot buy food...Of course that is entirely hypothetical.

[grenfell]

Yep , incompetence has never stopped a government trying to spin out just how wonderful they are.
Now I have to take my cynical head off or else I'll never fir through the door

[yorkshirewolf]

Obviously all the drug dealers across Sweden and every other country won't be going to the government and telling them what their turnover is, what percentage is cash and how they're doing their transactions!
.

Maybe an unforeseen side effect will be a reduction in drug dealers if they can't use or are unable to use cash or other untraceable methods. I can't really see a dealer going for barter certainly not with tins of beans or apples but then again they could accept gold and silver which may just give a rise to burglaries , hmmm.

Really? How do people in prison have an economy without cash? - barter and currency.

Tobacco is used as the main currency in every UK prison, for pretty much anything, drugs, weapons, phones....

[grenfell]

Yes good point. I suppose that as it functions in a prison it could be used as an argument for a cashless society. I still maintain , however , that bartering isn't a viable system with the amount of people we now have and more specifically the amount of "unproductive" people we have and I'm not sure how those numbers would affect the relatively small numbers that would be able to barter. There are low levels of barter now and I see no reason that would change but it won't replace cash or electronic banking.
Tobacco and cigarettes might very well be the currency in prison but just how much of that is sent in by relatives and associates of the inmates? They don't produce that tobacco themselves and at some point it is normally consumed , it can't be stuck in a safe and hoarded for decades . That's not to say it wouldn't be a useful barter commodity in the wider cashless world although it does highlight a problem with barter. One might have tobacco , blankets , eggs or whatever and perhaps want batteries but can't find someone with batteries who wants what you have , perhaps he wants petrol. So you may have to go through several "transactions" to get your batteries .
Though I don't want a cashless society , being pragmatic about it there are realistically more arguments for replacing physical cash with electronic banking than there are against. It will happen and the only thing in doubt at the moment is the timescale.

[Plymtom]

Really? How do people in prison have an economy without cash? - barter and currency.

Tobacco is used as the main currency in every UK prison, for pretty much anything, drugs, weapons, phones....

Isn't it sort of dumb? people used something to barter for goods and services, as we know cash avoids a level of scrutiny which most of us are entirely happy with, the level of control over our lives which can be effected when everything is electronic is frankly unacceptable, hacking becomes possible in ways we can only begin to imagine, look at paperless statements from banks and utilities ( a form of ID for some things) which could be manipulated, it's like "The Net and 1984 " rolled into a potential nightmare.
We are all looking at ways of insuring against cashless, ways of carrying on doing what we do both if the system fails, and if the system becomes abused by forcing excessive control on our lives, as they do behind bars a black market will emerge, people will talk in code, refuse to text, email, or even talk on phones, it's a breeding ground for a far darker world the powers that be don't see.

[jansman]

Of course,until such a situation arises,this discussion is( as I said earlier) purely hypothetical. However,if you want to see (or rather did see) a cashless society,then Argentina was a good example.The Peso collapsed and the banks/government introduced the 'Corralito' which was literally a fence around your money.The banks simply shut!

Initially folks started to barter,and so I read, continued to do so in one form or another right through the crisis.However,on a broader scale,barter became generally unsatisfactory. As grenfell pointed out,you many have eggs and need batteries,but the man with batteries needs petrol!

So it appears that trading evolved using US Dollars and precious metals.When the banks finally started releasing rationed amounts of the national currency,folks changed it as quickly as they could into US Dollars.Gold jewellery and coins soon became a valuable currency,and to an extent silver. Traders would take a couple of links from a bracelet or necklace and pay appropriately, leaving you to trade the rest another day.
Oh yes,plastic was NOT accepted anywhere.

As I say,such a situation here can only be speculated upon.Fascinating stuff!

[grenfell]

It is fascinating to speculate just how things might play out. Argentina is a good example and for that matter so are Weimar Germany , Hungary and Zimbabwe all of which suffered hyperinflation while at the same time still being cash economies. I seem to recall an anicdote from Germany about filling a wheelbarrow with banknotes and the wheelbarrow still being worth more than it's contents , it might be an exaggeration but it makes the point. I also seem to recall people using dollars where they could and in all the examples precious metals have played their part consistently which could be seen as a very good reason to store gold and silver.
I've always leant towards a slow crash type of scenario for most things and I feel that's just how a cashless society will come about. I could say it started for me at least in the 1980's when I started work. The company was just wheeling out a direct to the bank payment scheme. I never got my wages in cash , for the first few months I was given a cheque until the system was set up . One guy did still demand his wages in cash and used the 1899 trucking act to back him up ( repealed or otherwise removed now I believe) but the amount of "mistakes" that were made wore him down and he accepted direct bank payments in the end. With the rise of the internet electronic payment took off and now the spread of ways to pay or be paid is much wider , cards , contactless , discounts for DD's pingit and phone transfers and so on. People get used to electronic systems and use cash less and less until we have a generation who realise they can do without it which if everything goes smoothly is very true.
I suspect that in some ways I'm still a bit of a Luddite , I cling to the old ways of doing things. If teleportation was invented and perfected tomorrow would I get rid of my car or bike? Probably not.

[Jamesey1981]

I seem to recall an anicdote from Germany about filling a wheelbarrow with banknotes and the wheelbarrow still being worth more than it's contents , it might be an exaggeration

You recall correctly, and it wasn't an exaggeration, it happened between the wars, Germany needed money for their war effort, so they stopped producing the gold mark which was a nominal amount of gold, and started issuing the paper mark. When the war ended with Germany defeated they ran the presses without any assets to back up the currency they were printing, causing the value of the mark to collapse, the gold mark still had value, but they didn't have the gold to issue it, they were printing paper marks.
In 1914 a dollar was worth 4.2 marks, by the end of 1923 a single dollar was worth 4,200,000,000,000 marks, (4.2 trillion marks!)

They even printed a 100 trillion mark note, at the end of the hyperinflation they were worth around $24 or £5.