Monday, June 09, 2014

Cashless Society in Fiat World

It appears that the Israeli government is looking to move the Israeli economy to a cashless economy. The link mentions other nations are considering this as well. The Israelis are uaing tax revenue, the black market economy and money laundering as excuses. While those are good excuses, anti-money laundering efforts sound weak when banks caught red handed with cartel money get slaps on the wrist. There is something deeper this protects governments from: a loss of confidence.

Zero Hedge rightfully harps on the surveillance capabilities a cashless society would grant the government. A central authority could track the transactions of any questionable individual, preventing anything subversive. The digital aspect would be a much easier sell after decades of widespread credit card use and technology advancements at the consumer level. This would also fully actualize the printing press = a computer idea Bernanke discussed years ago.

In a cashless society with a central bank, the unit would be infinite in quantity. It would be a reverse bitcoin. This would be easy to manipulate and expand to cover any problems in the system from big players. In a confidence crisis, people go to hard money, but in the absence of it or stratospheric cost, they go to cash. This first move is a signal of lost confidence. Might a cash heavy world spark not just a loss in the government's money but the banking system? Cashless solves that. Bank runs are eliminated as a concern.

This will be interesting to watch because the trends are moving away from petrodollar security. Outright collapse may not happen but change will come. Israel may not pull this off, or they might ans act as a guinea pig for the rest of the dollar system. A cashless economy would be a wild step to keep the current aystem in place just a little longer to keep the current elite in place and farming the population for money.


peppermint said...

heyyyyyyyyyyyy you finally discovered what Bitcoin really means! All it mook for you to disregard the ideological whaargarbl associated with it, was to call it a reverse Bitcoin.

Yes, this is exactly what a cashless economy means. Perfect surveillance of every transaction - in the Bitcoin economy, this by everyone. Government can still print money because forcing people to do things is what government does.

The real question regarding Bitcoin is, obviously the government should know, but whether making your friends and family know about your every transaction is good or bad.

nikcrit said...


sorry, but couldn't resist pointing this one from the face page/cover of today's nytimes/

I was sort-of surprised; I didn't think this topic was still 'seriously' being entertained; in recent years, it's usually proposed as a sort-of incendiary joke, e.g., as a conversational 'flame-fanner' with the purpose of energizing more sober racial discussion, etc.

peterike said...

The idea of a cashless and entirely traceable economy is the sort of thing that should get me riled, but it just doesn't anymore. I pay for just about everything I can with my credit card, because it's easy and I get points. Woo hoo! Ok, sure, I probably pay way more in interest than I ever make on the points, but that's because I'm a lousy money manager.

As for cash, when I need to use it I find it annoying. Most often that's when some disgusting African cab driver lies to me and says "mah-sheen bro-can, no cardt" or whatever.

Does it mean Big Brother follows my every move? Yeah, probably. And so what? I'm not a threat. Ok sure I have CrimeThink opinions up the wazoo, and given the blogs I post at I wouldn't doubt that somewhere deep in the bowels of the NSA (or, possibly, the Dept. of Education -- is there any difference anymore?), somebody once put me on some tracking list. Ho hum. Are they really going to come and get me?

Well, maybe. And in some ways that might be a brilliantly liberating experience. Ok, they forced me out. Now let me see what I can do. Though "what I can do" is probably die in a jail cell someplace. If it gets to that.

Meanwhile, my supreme indifference, so carefully cultivated over decades, has me saying "yeah, get rid of cash and force everyone to take my credit card even if it's for a 25 cent transaction."

For years I've wondered why we don't do this, since it would effectively eliminate organized crime in one swell foop. And then I always figured that's exactly WHY we don't do it. But since the real organized crime is now the Banksters far more than the Sopranos, maybe it's time has come.

Portlander said...

Peppermint, I have no idea what you are talking about.

I've been in agreement with "SoBL" on the few bitcoin posts he's made including this one. There's no new discovery here as far as I can tell.

Your second and third paragraphs likewise make no sense except as the rants of the tin foil hat set.

Portlander said...

Two days, no answer… As suspected all along, a troll.