Cash is king

“Money talks, but it don’t sing or dance.”
— Neil Diamond.

Gerald Allgaier: Political Point of View

Most of the hysteria regarding the historic vote by the U.K. to leave the European Union concerns the lost business opportunities, the threat of tariffs and the reduced ability of people to live and work unencumbered by border issues. The Leave camp has been accused of being petty, provincial and narrow-minded in voting to free themselves from thousands of inane diktats from an unelected and expensive autocracy ruling over the worst performing economic zone on earth. As of this writing the stock markets have rebounded, the Pound is gaining strength and the sky is not falling. Calls for a revote have been squashed and apparently, according to the media (social and otherwise), money is everything.

Ten trillion dollars is the global amount of bonds bearing a zero or negative interest rate. The latest 10 year German bonds pay no interest as do the new Swiss ones. In plain English, a person buys bonds and instead of making interest on it, pays the issuer to hold the paper! This is a total reversal of common sense. You have to pay people to borrow something from you? It’s no wonder consumer, corporate and government debt levels are unprecedented. There’s no point in saving money if there is no return on it.

Unnoticed in all the commotion is another fundamental transformation being plotted by central bankers, federal governments and the private banking industry itself: to reduce and possibly remove cash from the financial system. They claim it would improve efficiency and be better for everyone because we could simply pay by tapping our phones. Think of the happy world that would be! No more lugging around cumbersome five, 10 and 20 dollar bills; no more holes in pants pockets from the weight of all those loonies, toonies, quarters, dimes and nickels!

Photo - Flickr
Photo – Flickr

Everything you buy, rent or use would be carefully tracked and logged by the responsible and wise Big Government, Big Banks and Big Data. There would be no more tax dodgers, under-the-table-work or shadow economy. All transactions would be open and transparent. It’ll be a brave new world!

I hate to be the fly in the ointment but to have a cabal of Big Brothers immediately informed of my every expenditure would be a total invasion of privacy, not to mention a big loss of freedom. With cash in my pocket, I can spend it on any kind of good or service and the resultant deal is an agreement between the two parties and no one else. I call this actual privacy.

We have a privacy commissioner in Ottawa who sucks up a half billion dollars annually. They don’t see a problem with the Feds snooping through every deal every person makes and for good reason. They don’t care about our privacy —
only theirs.

Cash is king because it means freedom, anonymity and also liquidity. Your phone may be down, your credit card may be compromised but that roll of paper with prime ministers’ pictures on it seems to have everyone’s genuine attention.

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