nocash

The Curse of Cash Part 1

OWNx Team Global Finance and Economics, News & Commentary 0 Comments

Many gold and silver bullion owners are all for hard currency. They see a need for some form of physical money.  Reasons vary. Privacy is among the top concerns. However, as we wrote about last month, there is a move underfoot to move toward a cashless society.

That proposal has been championed in a book recently written by Kenneth S. Rogoff called “The Curse of Cash.” In it he makes a case for removing nearly all cash from circulation, focusing first on $50 and $100 bills. Now, I don’t know about you, but I don’t think it would be wise to tell Grandma and Grandpa they can’t give their grand kids a crisp new $100 bill for Christmas – or the grandkids that they can’t get one.

An insightful summary of the book by William J. Luther can be found at The Sound Money Project: Curse of Cash op ed.

The point of the book is that large cash bills are primarily used to buy and sell illegal goods and services and to avoid taxes. His assertion is that if something is made illegal, then there should be no way to trade in it. Also, he says that government goods and services are all valuable, and thus avoiding taxes hinders funding these valuable services.

A final argument he makes is that cash hinders central bank monetary policy by giving people a way to escape negative interest rate policies that may be imposed in order to jump start growth.

At this time we will refrain from commenting on these assertions as we await the next op-ed piece by Mr. Luther. However, please know that the debate over cash is now going mainstream.

(photo credit Howard Lake)

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