One of America’s favorite board games, Monopoly, is going through a major change. A new version of the game, called the “Ultimate Banking” edition, will no longer feature cash. That’s right, no cash. Instead, players will have a “debit card” with which they will scan properties and use to make monetary transactions. This may seem like nothing more than a simple change to a board game, but in reality it is indicative of a much larger economic trend that is taking place in Western society. This trend is the elimination of cash. It is being sold to the public as a means to “eliminate crime,” but in reality is being implemented for much more disturbing reasons.
Let’s examine, for instance, NBC’s coverage of the cashless Monopoly game. Within the first paragraph, the news source paints a cashless Monopoly game as a good thing, and insinuates that only cheaters will bemoan the loss of cash bills in the game. Literally the first sentence of the NBC piece discussing the cashless Monopoly game reads, “In a move that will delight younger siblings who never got a chance to be the banker -- and infuriate older siblings who had a habit of stashing cash under the board…” Really? The only people who will miss the cash aspect of Monopoly® are those who “had a habit of stashing cash under the board?” Really?
These sorts of anti-cash movements aren’t merely child’s play, however. They are happening in real life, all over the Western world. In France, for instance, it is illegal to use cash for any transactions above €1,000. The United Kingdom says that it expects, “cash will be obsolete,” in the UK by 2020, and Denmark is hoping to do the same by 2030. The EU Anti-Fraud Office has declared that it intends to eliminate the €500 bill, and even in the good ‘ol USA, the “Land of the Free,” Lawrence Summers, a former economic advisor to Obama and ex-Treasury Secretary, has suggested that the $100 and even the $50 bill be phased out in the near future. I suppose, in the logic of the cashless Monopoly game, the only people who will miss having cash in everyday society are drug dealers and money launderers, right?
Of course, governments and their media cohorts will paint the elimination of cash as a means to eliminate crime. Interestingly enough, for those who aren’t history buffs, crime has been around long before any type of currency system ever existed, and is certain to continue even if cash is successfully eliminated. Perhaps the people who think that the end of cash will mean the end of crime should consider that for a second.
The reality is that a cashless society has nothing to do with putting a stop to cheating and crime, and has everything to do with putting a final nail in the coffin of personal privacy. A world without cash means a world where every transaction that takes place is digital, and thus, is recorded and tracked. Every single purchase you make will be recorded. Even something as simple as giving your son or daughter $5 for mowing the lawn will be tracked. This is a grim and frightening prospect.
There is one more element that needs to be brought up to understand the move towards the elimination of cash, and that final piece of the puzzle is negative interest rates. Traditionally, lowering interest rates is a policy tool of central banks to spur the economy. With lower interest rates, it makes less sense to save money, as it earns you less interest, and it makes more sense to spend money. But what if interest rates are already essentially at 0%, as they are in the United States and most Western nations. What then? The answer is negative interest rates.
Many of you are familiar with the way regular, positive interest rates work. Basically, you deposit your money in a bank, they lend your money out and pay you interest for the privilege of loaning out your money. Negative interest rates, however, would mean that you pay the bank for allowing them to loan your money out. Seems pretty backwards, doesn’t it?
What negative interest rates will mean is that you would have to pay to keep your money in a bank. Of course, people aren’t going to like paying to hold their money in a bank, so they will likely go to the banks in droves to take out their savings, or at least a part of them, in cash. This is what’s known as a bank run, and it can destroy a banking system. So what’s the government’s solution to this? Get rid of cash! If you can’t take your money out in cash, then there can’t be a bank run, and when negative interest rates are implemented, all of us will have no choice but to roll over and accept it.
Now we can understand the full picture of a cashless society. A cashless society means banks charging people to have money in their bank accounts. It also means that all transactions can be recorded and tracked, and even more importantly that all transactions can be taxed. A cashless society is an autocrat’s dream, which consequently would make it the nightmare of the average citizen. Literally everything that citizens of a country do that involves the exchange of goods or services will be tracked, recorded, and taxed.
So, what is an average person supposed to do about this? How does one react to these sorts of autocratic policies being handed down with what seems like no form of retaliation available?
For those who are rightfully worried about living in a society where everything you do is tracked, recorded and taxed, there is a ray of hope. Getting a bit of money outside of the Big Brother-esque clutches of Western society will surely help. While negative interest rates seem almost inevitable in the Western world, it is yet to be seen if they will make their way to other jurisdictions. Another potential hedge against negative interest rates and a cashless society would be to convert some of your savings into precious metals, such as gold and silver. These assets are less likely to be affected by the cash elimination wave sweeping the Western world. In addition, gold and silver have historically been used as a means for financial transactions, and so owning them is a good backup plan in a world where cash is under attack.
A cashless society is a frightening prospect, but one that seems to be ever more inevitably becoming a reality. For those who have no desire to live in a society where our every transaction is tracked and recorded, there a few options, although it seems that the powers that be are getting closer and closer to their goal of the decimation of personal privacy.