Keynes, FDR, Nixon ... they all hated cash
I didn't know so many efforts have been made to eliminate cash, so thank you for posting this article.
What intrigued me the most is what happened circa 2008 when savings rates starting going nearly - or literally - negative. Suddenly holding cash became more "economic" because the opportunity cost of doing so approached zero as well. Given the bail-ins in Greece and the fears of capital controls and market shutdowns seemingly possible at the time it seemed prudent to side step all those probabilities by holding cash physically. But holding physical cash is "money" taken offline. It doesn't contribute to bank reserves, and all that implies.
Interestingly - and perhaps forebodingly - now that prevailing interest rates are relatively high cash is probably being allocated to conventional investments - CDs, Treasuries, money markets, etc. to take advantage of that. But converting physical cash to that is dicey. Holding physical cash should be considered a form of diversification in one's "portfolio." I'm not prepared to say that the PTB have masterminded this but it could make conversion to all digital "money" a little easier on a mass scale. It may not be possible to retrieve the cash again.
But another thought evoked from this article is less academic and more relevant: The value of physical gold and silver and the inherent limitations of cryptos.
The government can remove the "legal tender" designation from physical cash and it might work, at least long term, but nobody in their right mind needs that affirmation concerning physical gold and silver. Gold and silver are true money that has intrinsic value (historically) and doesn't need the blessings of government or the legal system to be valid. Admittedly, transacting in physical gold and silver may be impractical - at least long term - but the main point is that gold (primarily) and silver are stores of value that can serve to get one through the craziness, which is what physical cash is normally meant for.
I love the analogy that bitcoin is "digital gold" and there's a ton to say about that, but the most germane for this piece is that "digital" means it's not outside the system (and that's an understatement.) If governments succeed in implementing and mandating CBDCs then the practical uses and alleged advantages of bitcoin will be nullified. The only way it might escape that is if once bitcoin always bitcoin so that even if conversions to bit coin from "cash" are taxed they may never be taxed again. But there are myriad implications with that. Essentially one would be taking themselves out of the financial system as we know it.
Supposedly it's true that money is whatever people agree it to be but the only way bitcoin et al can become the new monetary system is if institutions are willing to fight for it. But the problem with that is it's the institutions and the people behind them that actually want a fiat system with central banking and all that implies.
It will be fascinating to see how things play out.
I wonder how power people pay each other and media off ??
But there is a gold backed USA coin since 2015 invitation only https://www.americanbanker.com/news/gold-backed-digital-currency-ditches-the-blockchain
After watching what has transpired in the ME these past few days, nothing would surprise me going forward. We have hit an all time low.
You’re all right.
Love to meet you sometime.
The story mentioned Treasury Sec Donald Regan - not Reagan.
That definitely needs to be corrected !!
You never cease to impress me with your wealth of knowledge!
Fed Now is no more threatening than the ACH has been for 50 years. Any patriotic citizen has a stake in seeing to it criminal transactions can't be hidden. Of course quislings have the freedom won by others to disagree.