The Dim Future of “Cash”

imageIt has been around here as a background topic for years. 

We’ve seen the de-emphasis of cash in Scandinavian countries.  There, almost everything is on plastic.

Elaine and I depart tomorrow morning at Oh-God-Thirty for our trip to marry off my youngest daughter and you know much of a role cash plays in trip planning these day?  Almost – but not quite – none.

The only places where I plan to use cash are down to tipping and casino use.

Tipping because there is no other way to pay the people who get things done (try putting a valet tip on plastic…which I will – we like that kind of research).  Casino use of cash is also a no-brainer.  My whole “stake” is $100 and that begins each day of play – when it’s gone, that’s time to leave the casino.

It’s going to get a lot worse.

Over here, in this article, Apple’s Tim Cook is predicting a generation that won’t know what cash is.

Cash has been slowly getting hammered.  Since it is stock and trade in the drug world, police have been making assumptions that have led to a lot of innocent people having their cash seized under civil asset forfeiture laws, which are an abomination and affront to Constitutional law.

Now, looks like the Apple folks are upping their game in the cash-replacement world.

It seems to us that government may have “dirty hands” or “sticky fingers” in all this.  Rather than be a country where a presumption of innocence was a foundational cornerstone of law, we have quickly moved into a world of presumed guilt.  Unless you have money, in which case, there’s always court shopping…

Who am I to question a bright fellow like Tim Cook, right?  So I did some research on how much coin in being produced by the U.S. mint:


If Cook is right about disappearing cash, we should see much smaller numbers if we pull the data from 10-years ago, right?

Turns out, in the easy data retrieval we can only get as far as 2011 data:


Hmmm…lots and lots more coin is around…

imageIt may seem a bit quirky of us, but things like the U.S. Mint Annual Report (here) make for interesting reading.  There, for example you can look at longer timeframes for  coin production, but if you’re not careful, your thinking can be skewed.

In other words it may look in this chart like there is a lot of “noise” to coin production, but in reality – because so much of the Mint’s output is numismatic (collectable) coins – the demand varies a lot with disposable income.    Notice how the chart above looks for 2008-2009 when we were making a good attempt at economic collapse.

The actual “cash” used involves a lot of paper, but that comes from the Bureau of Printing and Engraving, not the Mint.  And it’s NOT U.S. Dollars, it’s Federal Reserve Notes.

Some distortion of the outlook for cash comes because of changes to how it is manufactured:  You see, it wears out:


With a trip which will involve visiting four casinos on tap over the next couple of weeks, I can assure you that the use of cash in casinos is down:  All the slots are paying off in bar codes, chips and cash are being exchanged at the cages, mostly, although you can still walk up to a blackjack table with a hundred dollar bill and play most places.  But, not all.

So yeah, I suppose the outlook for cash is dimming.

The best news about its disappearance is that over time, we will likely see an end to annual income tax returns along with it.  The overwhelming use of computerized accounting systems has already removed most of the pain from preparing stock and investment reports as part of the income tax process.  You just download the trading data and toss it into the tax software.  Wash sales…all those once-complicated items…all fading into the background.  Five years ago, I purchased annual gain/loss calculation software.  Last year?  Three clicks and done.

Eventually this will come to everything you have:  Your electronic checking account already makes seizure and theft a push-button  crime.  The final transition phrases to a cashless society should wipe out tax accounting…but we’ll see.

Government is pretty crooked,  so no reason not to ensnare people in Accounting Traps.  You report one level of income and if you’re not exactly right, you’ll get a letter, or worse, an audit.  Government’s way of playing games with us so they can exert power over us.  We is tax-chattle, after all…

And that’s one of the big attractants of Bitcoin.  People don’t trust the government – now more than ever – at least for the past 41-years –  says a story about Paul (who we also don’t care for) Ryan and his cronies.

The reason people like the crypto money?.  It’s something we talk about all the time around here: Honest Money.  Hard to steal, hard to impound, hard to forfeit.

If you can’t trust the government, who can you trust?

Well, the data seems to suggest “just about anyone else.”

Fed Parade Day

We have all kinds of FedSpeak coming our way…so brace for a round of Janet Sez’ing later on today.  Markets are relatively calm, so far this morning (because news flows are down to stupidity, inane, and moribund items).

Maybe Janet can shake things up a bit.

Meanwhile, we have new jobless claims data…

In the week ending November 7, the advance figure for seasonally adjusted initial claims was 276,000, unchanged from the previous week’s unrevised level. The 4-week moving average was 267,750, an increase of 5,000 from the previous week’s unrevised average of 262,750. 

Long-term trend is down so the world isn’t ending.

On the other hand, the Baltic Dry (shipping numbers) just dropped down under the 600 level, so that’s not a good look-ahead numbers.

What seems to be out there is a bigger problem we have talked about before:  Capitalism is not designed to work well at the “stable, everyone happy” level.  It works best with huge problems like massive growth or a world war to produce for.

When economics get stable and begin to look sustainable…things really go to hell for capitalists which is why corporations hate low rates:  Means their one idol in the center of life (double digit growth) will have to come from new gotta-have-it products, not from much easier war, terrorism, security state, and world wars.

Minutia and Superwoman

She of whom we don’t write is now embroiled in a media frenzy over whether she wears a frigging wig.

Did I, or did I not, tell you the media was down to scraping the bottom of the barrel?

I can sit here and talk till I’m blue in the face about real items of concern that impact all Americans at some level – and no one cares.

For example, I tell you that the price according to Triple A of unleaded gas nationally this week is $2.20- and a year ago it was $2.93…and all I get are blank stares.

But comes this Hairlary Clinton story and FB and Twits explode about it.

That speaks to the core problems of America. I am now going to observe a moment of silence since the country formerly known as The United States no longer exists.

To prove it, let me ask you to point out an actual southern border… And by administrative fiat, how many young men of military age are we about to import?

It’s gotten to where the only person you can trust is the person in the mirror.  Even that guy looked questionable this morning.

17 thoughts on “The Dim Future of “Cash””

  1. Bit coin as I see it is just an electronic platform that the government will take over (not buy – takeover) in it’s push to go cashless – there will be nothing safe about it…..and if in in multi currencies will just be a giant manipulated platform…….if controlled by central banks – the Chinese nationals will have their accounts confiscated…….The big question is – what will be the means of trade in the black market?

    • Totally agree. Does anyone really think that the wealthiest corporation on earth (City of London) is going to sit around and allow any alternative system cut into their taxation/cash flow system? Remember Silk Road?

  2. They have to get rid of cash first, before implementing negative interest rates. Lew Rockwell had a nice explanation of this.

  3. cash is whatever people will take in trade for goods & services. If gov’t cash goes away, something will take its place imo. Maybe the states will go back to issuing currency!

  4. I just don’t get it. Why in the world use a credit card to purchase things or pay bills when banks and stores are so susceptible to hacking? I don’t use them for much of anything except what I buy on the Net. Plus, there are interest charges! Seems nutz to me.

  5. Latest figure I saw was that 92% of all USA retail purchases are electronic. For non-cash purchases, smartphones (not android) are the most secure way of electronic transaction, because the mandated chips in plastic cards can be read in your pocket from a distance, or skimmed at point of sale by a hidden device. This percentage was verified by my millennial son and his friends.

    The only chance for Americans to avoid total slavery with a cashless system is to eliminate the income tax. The Obamacare legislation gave the IRS access to the bank accounts of every American. Filing/paying taxes is actually unnecessary, the IRS can just access your account and take what they want. But in a country that can print all the money they want, federal taxes are unnecessary. They are in place only to remind folks with money that the government is in charge, and don’t forget it! The rest of the I non-moneyed are controlled by government “entitlements” every month so they don’t need that April 15 reminder. There is a reason the USA constitution prohibits direct taxation by the federal government. And the reason there are more than 80,000 pages in the federal tax code is that 99.9% of it is tax breaks for the wealthy/corporations to avoid taxes. It’s why in the USA, if you do not have a corporation you are in actuality a foreigner in your own economic system.

    And as for the black market, it will simply go to foreign currencies or coinage containing precious metal labeled not-money. Once the Chinese finally free the precious metal markets and the market establishes the true price, it’s not going to take much metal to buy anything. The 90% silver coins will actually be valued too highly for using in small transactions like one ounce gold coins are today. Gasoline is still less than 25 cents a gallon if paying with silver coins.

    If the government outlaws ownership of precious metals, then the only way out is to kill anyone trying to enforce that law, because the alternative is total slavery. Then at the push of a button the government can impoverish any citizen. They can already do that, and do if a person is declared a threat to national security.

    The other time it happens is when the IRS freezes accounts/assets and denies all of your deductions for the past 7 years until you can prove otherwise. The IRS can also cancel your passport administratively. That’s why airlines require a valid passport number before you can purchase an international ticket to leave the USA.

  6. “I can sit here and talk till I’m blue in the face about real items of concern that impact all Americans at some level – and no one cares.”

    Le’s say 20% care, but that is not enough in a so-called democracy of ours. I was never asked for anything that affects our nation. Once the clowns get into the circuit it’s a dictatorship.

    However, the most fundamental issue is the world’s overpopulation with 80%-centers. They seem to be at the root of most of its problems.

  7. Here’s one for you George, maybe a plot line for a future book. A spawn of Hildebeast presidency will be forced on our grandchildren.

    The nightmare came to me while sitting in a rather boring planning meeting this afternoon. The mind map I doodled made me feel sick.

  8. Hate to be the one who disagrees with what the government does to its serfs but WE do not own anything in the good old USA Don’t believe that? let your taxes fail for 3 years OOPS there goes your Home and property up for auction along with any equiptment that it contains, Have a Farm? there goes everything you are allowed your Clothing and household goods. Autos? Same thing start walking, Own a corporation Buy the Senator of your choice and get Government Contracts and Money even tho your Buisness is entering Failure. Only in America land of the free Slaves

  9. credit cards are great! I order one every year or so, get a free RT on the plane (international included)from the points hustle….same for Amtrak (every 4-5 yrs)…and when I book with points, my ticket can be changed for $150, instead of wasting an extra $700 per refundable ticket…

  10. Just a wee bit o’ a note here George ol’ boy: You devoted a fair amount of space the the Hairlary issue yourself. And now you sucked me into it as well. Thank you very much…

  11. Mr. Ure, I hope that things are going swimmingly well for you, Elaine et al. Late 70’s early 80’s I recall seeing US Mint graphs of a prodigious amount of quarters being minted for some continuous years. This also happened to coincide with the “Golden Age of arcade games”. I was weaving in and out of the margins of Silicon Valley at the time. Rumor had it that the Nolan Bushnell’s(Atari), Sega corp, etc. were lobbying the powers that be- no not for some typical government contract or legislation to benefit them- but to increase the “velocity of 2bit pieces”.

    Wikipedia claims that “The arcade video game industry would continue to generate an annual revenue of $5 billion in quarters through to 1985.” Now I stopped putting any credence in any humongous round numbers especially those being published on the public sector side some time ago. But I will give Wikipedia the benefit here. I could see buried on some whiteboard a mission statement…Mr./Ms. red blooded American video game player will have pounds of our quarters in the pockets of their cargo pants!!!( were they around then?) Not sure how this would go down if Mr./ Ms. video game player had to make a water rescue on the way to the arcade!! May all of your cuts be one cut….Mark

  12. Sun Tzu again:

    “It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle.”

    It seems to me that the cashless world is the end result of the corpgovs winning not just the battle but the war. Most of us tax slaves don’t even know we are in a battle let alone who the enemy is.

  13. I don’t know George. No cash=No Grease for the society.
    Cash is a lubricant and without the “dark side” the world would not run. The business world would find it difficult to operate.

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