In defense of cash: why we should bring back the $500 note and other big bills | Hacker News Reader

In defense of cash: why we should bring back the $500 note and other big bills

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36 pointsfern1218 comments

This article is blog spam. It was written by someone with only a rudimentary understanding of the topic, which is pretty evident if you read it.

The entire purpose of this article being written was to get a good looking (SEO-wise) back link to the domain "businessmacroeconomics.com". If you look at all the links in the article, they are almost all to major news media publications (safe links to make the page look good). Then the real link appears at the end of the second-to-last section (the perfect spot for SEO). It's the only link not to a major news outlet, and if you look at that domain/website, it's some guy selling a book no one's ever heard of.

This article was 100% paid, for SEO purposes and written by someone who has no idea what they're talking about. They just ramble for 500-1000 words to get good (human-sounding) content so that google will trust it's a good backlink to the author's website and put him at a higher rank in the search results.

Either a voting ring got this post to the front page of HN, or 29 HN readers (at the time of this post) were swindled into thinking there was any substance here at all.

It is the article author's own book. Their list of publications: http://u.osu.edu/zagorsky.1/sample-page/

> Then the real link appears at the end of the second-to-last section (the perfect spot for SEO).

Curious. Why is the 2nd to last section perfect for SEO? Also what does that link get in terms of SEO cred?

> Either a voting ring got this post to the front page of HN, or 29 HN readers (at the time of this post) were swindled into thinking there was any substance here at all.

I sometimes vote things solely by their title, and keep it open in a tab until I read it later. This way, I vote on topics that might provide an interesting conversation for later, without the investment of spending a lot of time reading each entry on the front page. Most of the value of HN ist the comments, and it would not be the first time that a bad article produced a great discussion.

But thanks for the research! I didn't know that was a thing.

Bigger bills would also be nice when doing things like privately purchasing used cars, or more expensive Craigslist items. Multi-thousand dollar items are common on the used market.

But one thing seriously needs to change as well: The level of cash considered "suspicious" by law enforcement.

This is especially relevant in our current environment of unregulated civil forfeiture.

Am I missing something or does the author not explain why bring back specifically the $500 bill? The defense seems to be, "Well, in case of catastrophe, we should have cash," which I agree with, but that still doesn't explain why the $500 note. If anything, the author makes a good case for maintaining smaller denominations.

> Am I missing something or does the author not explain why bring back specifically the $500 bill?

Inflation? "[...] despite the amount of inflation that has occurred since 1969 (a $500 bill is now worth less, in real terms, than a $100 bill was worth in 1969)." -https://en.wikipedia.org/wiki/Large_denominations_of_United_...

The $500 bill pictured in the article is a gold certificate: "Redeemable In Gold On Demand at the United States Treasury"... Looks like all $500 gold certificates were printed in 1928, as the 1934 high-denomination bills were only used for intra-federal reserve transfers:

https://en.wikipedia.org/wiki/Large_denominations_of_United_...

Okay... let's say we should avoid a cashless society and encourage people to carry cash. Why is a $500 note useful? If you look at businesses today, you'll find several with signs that say "no bills greater than $20 accepted." If you think it useful to keep cash stuffed in your mattress in $500 notes, and there's a massive disaster that shuts down all the banks... where are you going to convert that $500 into everyday spending money?

As I once saw a survivalist say, hoarding gold for a post-apocalyptic world is a dumb idea, because it's too valuable to be fungible. High-value currency notes have a similar problem. They're not really usable except for high-value transactions, and the number of transactions that meet the criterion is actually quite low (I've paid rent in cash using $50s before, and the most problematic thing was getting them), especially in disaster scenarios.

> If you think it useful to keep cash stuffed in your mattress in $500 notes, and there's a massive disaster that shuts down all the banks... where are you going to convert that $500 into everyday spending money?

Since the Fed, which issues currency, is, in large part, the banks themselves, if a disaster causes a general banking collapse, you've got bigger problems with the value of your cash than whether you can convert denominations.

This is less "collapse of the financial system" and more "all the infrastructure be fucked and ATMs don't work," as posited in the article.

> all the infrastructure be fucked and ATMs don't work

Which is not that far away. A few months ago, in my town, underground workers dug in the wrong place and cut a central internet connection, and ATMs and other cash terminals in the better part of the city center stopped working. I luckily carried enough cash, otherwise I wouldn't have been able to do my shopping.

Because $100 bills are an inconvenient way to hold wealth, and other mechanisms like gold are too unpredictably unstable and have negative tax implications.

You could have made the same argument about small denominations in 1917, when probably half the population never saw a $20 bill.

The most important function of cash is to limit the power of the government to control private economic actions. There needs to be more acknowledgement of the fallibility of government, and other mitigation strategies proposed for government abuse than just "we'll vote in a better government". Society needs non-political checks on state power, like cash.

It would be a much stronger article if the author did more to counter the reasons for eliminating large denomination bills than simply to say "the positives outweigh the negatives". In particular, the argument that cash is useful under catastrophic circumstances seems very weak against the problems large denomination bills cause in everyday life.

What problems do they cause in everyday life?

The standard argument is money laundering, but we just had a case not long ago where a multinational bank facilitated billions in money laundering. So criminals seem to have found a way.

Such a dumb article. In case of natural disaster, you might risk losing your cash in your house, something that can't happen with digital currency. Also, the problem is not just the access to ATM or cellphones, but lack of energy and cellular data at all: by creating a more robust grid and connections you already solved all the issues related to them. Having cash handy doesn't solve the real problem, only partially patch it up.

In a disaster, buying a few bags of ice, or a few gallons of gasoline is unlikely to cost more than $50. What cash-only vendor will be able and willing to provide change for a $100, let alone a $500?

If any cell service were available (think Project Loon) then a vendor with a Square reader could do business without cash, or, if willing to break ToS for trusted customers, could act as an ATM, providing cash in trade for credit or debit card charges - with the risk of charge backs, of course.

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