Banks, gangsters and the strange resurgence of cash
economist.com
economist.com
1. Precautionary savings. In a low interest rate environment, there is not the same penalty for holding cash as getting interest in a savings account. A lot of people find it prudent to have a buffer of cash, say enough to cover 1 month of expenses. So cash withdrawn from an ATM but put into a piggybank or under the mattress will appear here as "missing". If you want to change the situation, then raise interest rates and increase law and order.
2. Crime. Sure, crime is conducted in cash, and a lot of that money is funneled to Latin America. This is a known thing -- it's more seignorage income for the Fed unless the cash comes back into the economy, but much of it never will as several economies are dollarized. I don't think there has been a material increase in organized crime, so I would think household precautionary savings is the reason.
3. Let's get some perspective. $50 Billion in cash is basically nothing. It's like 2% of currency in circulation. So this whole article is complaining that 2% of currency is not circulating. Well, OK. Must be a slow day over at the Economist.
Having enough cash under your mattress that authority figures can't easily take from you is a psychological comfort.
Which gave way to IOUs from gold smiths, since carrying large amounts of coins was still hard. Which, well, everyone knows the rest.
Doing this kind of thing has meant their ancestors survived crazy insane disasters that most others did not, so they are going to keep doing it to some extent no matter what.
Think of it as humanities extra parity bits. Most of the time they’re useless, until they’re the only reason we’re still here.
So if you decide to flee the country, five pounds of gold is $150K and can easily be carried in a small backpack. Let's say you keep it in 1 troy oz pieces, so you have 80 of them worth about $1800 each. You can go to any nation on earth, and whatever currency they have, they will be happy to sell it to you for gold. Yes, only in $1800 pieces. That's fine, you can exchange it for whatever local currency is being used as you need it.
You can do this anonymously and privately. You don't need to worry about whether the US dollar has collapsed. Gold does go up and down, but it never goes to zero, and tends to do well in crisis situations and maintain value over the long term. It is not - or shouldn't be viewed as -- an "investment", it's insurance. It costs money.
Moreover even if you do not flee the country, having assets that you possess - true bearer assets -- is superior than assets others hold for you in a custodial account. How secure is your 401K? Secure until congress passes a law to take some of it. How secure is your bank account? It is as secure as someone who can convince the bank to freeze your account or close your account. So having a bit of gold or cash as a type of hedge for unlikely events makes sense to a lot of people.
You have to keep in mind that for a household living in Silesia, between 1880 and 2000, they would have lived through one hyperinflation, two world wars, two revolutions and three uprisings, and four foreign invasions. They would have been ruled by Prussia, Poland, Nazi Germany, Soviet-controlled Poland, finally free Poland. Each of these had their own currency regimes and currency reforms. That household would have been well off having a bit of gold tucked away. They would have been able to trade some of it for food during the Weimar collapse, and to transport some wealth through the dark days of communism -- maybe even bribing someone to let them escape the country with something more useful that worthless zlotys in whichever nation they landed.
You're attempting to use logic in a place where there is none.
2) it’s a lot less fun to talk or think (and may be dangerous to even try) about more realistic issues - like if you’re on the wrong side of the situation in Bosnia or Rawanda.
3) it’s the same kind of general process though, and some of the same tools can be useful to defend, escape, or repel.
And gold and diamonds got a LOT of people out of harms way that otherwise would be dead - at least from the 2 folks I knew that got out of Vietnam with their families when the south fell (and are probably alive today) only because they were able to bribe their way onto the boats using gold.
Think Argentine 90's hyper-inflation crisis. Think Venezuela economic colapse.
Heck! think Argentina RIGHT NOW.
If you think of it however as not needing to be rational, but more or from an evolutionary perspective ‘folks in the past who had similar types of fears and discomfort might have survived prior insane disasters that no one else expected to ever occur’ it might make more sense.
It doesn’t have to be rational. It doesn’t even have to help them survive or be successful most of the time. If it works even a little better and they survive when everyone else died because of their insane paranoia, those genes will propagate.
Most of us prepare for short-term disruptions that are far more likely than hordes of undead roaming the streets. If widespread societal collapse should actually happen, then having a strong local community, and knowing how to co-operate and communicate with one's neighbours is far more important than having enough canned tuna to last to Ragnarok and back. That being said, having survival skills and basic supplies can come in handy in a wide range of situations.
Personally, I'm preparing for more basic things like long power outages, extreme weather and supply chain disruptions. Sure, we got food, fuel and supplies for a few months at home, and it's been very handy during the pandemic, while being snowed in for a week a few winters ago, and when being without power for two days last summer -- I could keep working like any other day, and didn't lose any income.
Yes, that includes some cash. It's been handy a few times when the card terminals at the store wasn't working. Storing large piles of it seems an unnecessary risk, though.
The writer probably wanted to subtly refer to relevant Danish-American actress S.J. (a cryptic critique of the frugal accomplished Northern Europe?) in her statement "If I pay bucks for a movie ticket, I do not want to go there and think" (quoted from memory). Too subtle, let us not speak in riddles! (Even that «transphobia», presumably to be read as "fear of [monetary] transactions" - privacy, availability, inflation, currency as a token without intrinsic value: with such obscurity, little of the message can pass.)
Romero confirmed the depiction was that of "the revolution", where "the awake" realizes the vast majority is assimilated, but discovers "humanity" inside himself and decides that it is worth fighting to defend it, as the core hidden topic in the original work which provided the inspiration: Richard Matheson's I am Legend.
All of that installed in the social crisis of confusion, incompetence and violence seen as the core aspects of the '60 in the USA.
...Since we are discussing about cash, and surely you wanted to be on topic, I assume you meant to state "ghouls also renounce to privacy", worsening the scenario Romero originally depicted. Well noted.
The “real” gold and silver people use it to avoid taxation. The high spreads and illiquidity are less than what you owe the tax guy or your ex-wife.
An important caveat: this only applies to reasonably large orders, 1 oz or larger. You cannot buy $100 of gold with 1% spread.
Plenty of reputable shops, and most are more than happy to do cash transactions.
They’ll issue you an invoice made out to walk in or whatever, so you have documentation, and if you want, you can pay taxes on gains or whatever later.
It IS getting harder to get cash out of a bank without jumping through endless hoops, but most banks will still let you call in an order for $20k cash or whatever (more than $100k starts to become much more difficult) and after a few days will have it ready for you with documentation (so if a cop pulls you over you can prove it is documented/part of a ‘legal’ source).
Some will make you sign a waiver so if you get mugged outside the bank, you were warned and it’s not their fault, etc. at some point it’s probably worthwhile to get an armored truck or whatever.
Which the cop will promptly ignore and take the money anyway.
You do have enough lawyers right?
I really want to believe things are not that bad in the US.
Some are really good, some are…… really not.
And it’s hard to predict what you’ll get unless you really know the area.
Where the civil asset forfeiture stuff really gets people is when they don’t have a paper trail.
The department has an army of lawyers who deal with civil asset forfeiture all the time, and they can call in federal assistance if needed. There's a 95% chance the department will keep all of the cash, and in the other 5% they merely keep some of it.
Paperwork won't help because the prosecutors will successfully argue that it could be used for future crimes.
Civil asset forfeiture makes a mockery of the US legal system, but most people don't follow it enough to see just how bad it really is.
Someone’s gonna lose their job over that, at least if you have enough lawyers
Where civil asset forfeiture comes in hard core is when you can’t show the source of the money.
Show me a case otherwise.
Gold doesn't multiply itself so that you have more gold that might be unreported. It's not like an investment account in the Caymans. It's just a collectible. You can also buy rare books, or antique furniture, or rubies, or any other collectible. There is absolutely nothing special about gold that doesn't equally apply to these other items, other than gold is more famous.
For this reason alone lots of the extremely wealthy hold it as a hedge.
At volume the premium over spot is about ~6% even straight from the Royal Mint
Example: https://www.royalmint.com/invest/bullion/bullion-coins/gold-...
People who have businesses that are easy to run in cash (landlords, construction, restaurant trades) often run a portion of the business off book. Converting cash to commodities is a pretty common way to store value more securely, as cash gets unwieldy. Sometimes country folk use equipment like tractors or junk cars for similar purposes.
Might loose a bit to fees getting it on chain(s) (though less than intl money transfers if one is used to that), but should make it back pretty quickly.
[0] https://www.reuters.com/business/walmart-allowing-some-shopp...
[1] https://github.com/bisq-network/bisq
In the event of hyperinflation the Bitcoin will hopefully gain (or at least preserve value)-- and it can be transferred online, which the cash cannot. (And in the event of a total bitcoin collapse you still have 90%). Re-balance it once a year or so.
It doesn't take much to make missing out on the 0.5% interest rate of a high rate savings account into not much of a problem.
Suffice it to say, I've been seriously considering the tradeoffs of hoarding cash under my mattress.
For those reasons I keep a week of cash on hand, not because civilisation might collapse, but as a buffer if my access to the banking system is disrupted.
For a while last year, bank branches had pretty limited hours, and I bank with a out of state credit union (because they have decent interest rates, even if that's 0.5% these days), and some co-op network branches weren't doing shared branching either. So, if I want to be able to buy something over my daily ATM limit, I had to hoard cash, since I couldm't be sure I'd have access to it.
Of course, prices haven't been great for buyers on most things (although I did pick up a well priced Street Fighter II Turbo early last summer and a not terribly priced tandem this spring; lots more nice things went at prices I'm not willing to pay)
Granted, we were a drive up branch that dealt with commercial/retail so a lot of customers would routinely be dealing with 5k worth of cash. Other branches had similar amounts of cash though.
Strange world
Still, it's especially interesting because the numbers even 15 years ago are much higher in real terms than today.
This is another advantage of inflation.
You can set rules like, you have to declare more than $10k worth of assets traveling with you on flights, and every year, the plummeting value of that dollar metric includes more and more people and activities in the surveillance state.
Cash is also a security risk and liability from a ‘getting robbed’ perspective.
So it’s rare to really need more anymore, except for outlier situations like car sales, which they generally don’t handle well.
I shouldn’t have to schedule something ahead of time which is the equivalent of cashing the average American paycheck. Cash might be a bit of a pain, but there are still plenty of common and good reasons why I might want 5k of my money without having to wait a few days for it.
I remember a guy withdrawing $25k in cash one day. That was unusual, which is why I remember it, but it wasn’t a problem either. (We gave it to him in a big sack, and I was disappointed that the sack didn’t have a large $ printed on the side.)
My wife used to work at a regional branch that did cash management for other banks. The place was like a fortress and had a lot of physical security measures to protect the people and dollars. That branch was nuts - they’d handle millions in currency and be able to handle six figure withdrawals. Midtown Manhattan banks can do that too.
Although, I still personally believe that coins at least up to the US quarter should probably be abolished. Quarters are really the only thing semi useful as a medium of exchange, and even they are starting to lose their utility. Maybe dollar coins can still be useful.
The US probably could get by with just $1 and $5 coins.
Metal coins seem like a case of holding onto tradition despite losing the original reason for the tradition.
Plus, quarters are better to flip to make decisions than bills.
They're also much easier to handle when you need many different ones, like when you're trying to assemble an exact amount. I can just look into my wallet and pick out the coins I need, whereas with notes, I'd have to spread them out like an awkward floppy hand of cards and especially if they weren't distinct enough scanning through and finding the right ones sounds plain annoying.
(Plus, 2 dollars is like a quarter 50 years ago....)
The Japanese still love their cash and coins. And even though they have a variety of NFC payment options and credit cards are not as terrible as they once were, their adoption rate is slow.
Do you know any? If I could vet its security and """reasonably total""" privacy, the idea could be tempting - e.g. to buy a cheap device to only do monetary transactions. I am not sure, first of all, how you would transform cash into credit into a personal device.
* Country-specific: prepaid cards like Suica in Japan, purchasable with cash from ATMs.
* Not that cheap: offshore bank account.
* Not legal: crypto card with "borrowed" KYC.
So basically unless you're lucky to be living in a country with a privacy-respecting culture, you have to act like a criminal to regain the basic right to privacy.
Because I also know of systems which are related to banks, but explicitly come from your account, invisibly to the seller - but the bank knows everything.
I have seen anonymous pre-paid cards which had in the back the space for a signature, and were accompanied by instructions such as "must be signed to be valid".
Yes, this likely means retailers will play games with change, but other times you will come out on top with the rounding. And think about it this way - yes, sometimes retailers played games with the half-penny too. A few decades on, once you've gotten out of the mindset that someone is "cheating you" out of maybe as much as a quarter-penny every transaction, nobody cares, it's not an actual significant amount of money.
there also are significant costs associated with maintaining currency units that small - it costs more than a penny to make a penny, and while sure, that penny gets used through multiple transactions, that also incurs additional costs on everybody who has to handle that penny in every single transaction. The amount of time and energy spent handling that penny probably winds up being dollars over the lifespan of the penny.
this also gives interesting context to the expression "a penny saved is a penny earned" - that expression today would be "a dollar saved is a dollar earned". A penny was actually a decently significant amount of money when that expression was coined, it wasn't literally "every single quarter-penny matters".
Downside is you have to go during banking hours and you have to make an extra trip.
When I've bought 2nd hand kayaks from someone's home, I've been able to transfer the money on my phone through the banking app and they've seen the funds arrive in seconds. Is this not the case in the US?
That said, Faster Payments in the UK are not guaranteed to be instant and can take up to 2 hours. Also, some banks will arbitrarily downgrade them back to slow old BACs if it flags up as risky on their systems or if it's someone you haven't sent money to before.
In general I agree it's not a problem though, you're not going to let the buyer take the keys until the money is in your account.
However, I did need to borrow his card reader/code generator thing - put my card in, enter the PIN and the amount and then type in the code it generated into my phone to authorise the transfer. Presumably because of the large amount going to a new payee.
They have some biometric auth thing in the app now but I've not set it up or even looked at it yet.
As time goes on, those dollar maximums and notice periods are malleable and completely outside my control.
It’s possible that the kind of account you have with that bank plays a role here. There has been a lot of deregulation over the last 10 years or something, but it used to be that your account had a descriptive name - passbook savings, demand deposit, etc. And those names meant something! A demand account meant you could demand your money any time you wanted, but it was against the law to earn interest. A passbook savings account earned interest, but you were limited in how often you could take money out, etc.
Well, either they made it or I went to 2 different branches, but it was a classic "Why even have the rule with an arbitrary number"
In some countries that's the law.
> I wanted to buy a used car ... the easiest method seemed to be cash
In some countries that became illegal over a certain threshold of expense the payment must be traceable).
I was recently told (but did not verify) that car sellers, in some countries, out of some regulation, nowadays will even ask you how you "made" that money. (And I replied that they'd better know better before being impertinent.)
I am trying to flee - if you know a place in which values (such as aptitude and civilization) are still in place, drop a note.
Interestingly for the context, it was a crisis in banking that "made the first alarms ring", in my case, years ago.
Also, safe deposit boxes are an option, which have different security tradeoffs from a safe in your home.
And fire-proof safes aren't "fire proof". They're generally rated for a reasonable amount of fire resistance - 1 to 2 hours - which is usually enough time for a house to burn down around them and be extinguished (they also only promise to protect paper, for example).
Whether they would survive the inferno of a bushfire, wherein the house is not extinguished, is far less clear.
Tradeoffs generally require hedging your bets.
If it's a societal event, then yes, you can't rely on safe deposit boxes, just like you can't rely on your bank account. You're better off shoving cash under your mattress and stacking brass and lead.
But if it's an individual event, then your home itself might be a target, and safe deposit boxes might mitigate your risk.
It's all about tradeoffs.
Reminds me of 1-2-3 rule for backups.
I was checking out food at a supermarket with debit when the card reader crashed. Cashier rebooted it but it complained that I didn't have enough money in the account, which I definitely did. I checked my banking app and it showed as if the transaction had succeeded, but the supermarket couldn't produce a receipt and refused to give me the groceries. When I called the bank they said there's nothing they can do and it would sort itself out in two weeks. The supermarket info desk radio'd that apparently someone else was also having trouble checking out with debit.
That was the day I vowed to always withdraw a month's expenses in advance and fight against full computerization of cash. I can imagine someone getting screwed real good having their food budget stuck in a banking error for half a month unable to buy food!
Now also suppose a "clerical mistake" freezes access to your accounts.
I had 40K taken by US Bank last year...365 days have passed and they're still coming up with excuses as to why they can't disburse that amount to me.
Thank god that I had the insight to start a savings account at a Credit Union about 10 years ago, and moved half of my paychecks there via direct deposit.
I now keep cash in a safe (what safety am I getting keeping that cash in a CD at .05%?) as my savings account.
The government can legally just take your wealth from you, and you have to prove that you it came from legit and legal means, and they can drag their feet even when you produce proof.
https://www.aclu.org/issues/criminal-law-reform/reforming-po...
Our currency has also depreciated massively over the years to the point of being useless.
We've unofficially dollarized a lot of cash operations so I bet a bunch of it is here.
Cuba and Argentina have similar forex controls.
This is probably the case all over the world.
Just day to day or do you have an app or something that the people follow?
There is certainly misrepresentation and rumour-mongering in these comments, but not in the article, and there's nothing benign about international money laundering, or more precisely, nothing benign about the people it enables.
> $50 Billion in cash is basically nothing. It's like 2% of currency in circulation.
This is very far from the numbers quoted in the article, which shows two thirds (£50bn) of all British pounds sterling banknotes (£75bn) being unaccounted for, and then similarly one-half of all Euros apparently circulating outside the eurozone.
This article wasn't written by, or from the perspective of, Americans. There's a brief mention, though - $7,000 per US citizen is in circulation. Somewhere.
> this whole article is complaining
There are no complaints registered in the article, unless you count the cash mule's plaintive wail about how heavy the suitcase was.
This article is a careful discussion about folks in authority seeming unburdened by the discrepancy.
> raise interest rates and increase law and order
Parochialism doesn't solve global issues.
However, given that international travel took a nosedive in the last 18 months whilst banknote production continued to stampede, I'd have to suggest that hoarding by globetrotters doesn't account for any current discrepancy in production vs use in observable trade.
It's three times what I routinely carry, which is still above average:
https://www.bloomberg.com/toaster/v2/charts/892967a8146e4cc8... or https://www.statista.com/statistics/787626/average-amount-of...
Between food and drink, lunch, busfare etc $100 generally covered most expenses beyond tickets to events, and then $200 USD was usually enough to solve any significant problems if you miss your bus ride home or whatever. If you sprain your ankle in some castle ruins, you likely don't want to spend half the afternoon hobbling around historic cobblestone roads in a village somewhere looking for an ATM to get taxi fare back to the hotel. Taxi drivers rarely turn down USD.
That said, ATM fees internationally, depending on your card issuer, can be pretty expensive, ATM fees + forex fees can amount to over 10% if you're only pulling out $100/day. If you don't mind the risk, pulling out the maximum amount of cash per day (usually $400 I've noticed) gets total fees down to about 4%. If you're a student backpacker on a budget for weeks on end these fees can be a substantial fraction of your travel savings/budget.
I have a single debit card, and a credit card I haven't used for years (I always failed to pay it off at the end of the month). The reason I carry cash is in case my debit card stops working - suspended by the bank due to suspected fraud, card stops working in card-readers, bank decides to close my account without warning or explanation.
£100 should last me a couple of days, in which time (hopefully) any problem with the card should be resolvable.
I don't carry shrapnel any more. I don't use cash in shops, unless they have a minimum card spend (then I have to carry the shrapnel change home). COVID has led to many shops having a preference for card payment, so I comply.
Perhaps I should peel off all but £30, and keep it somewhere safe at home. But I'm not afraid of being robbed in the street.
I don't carry less than the cost of a new phone, new laptop, and at least a week in a hotel.
All sorts of systems can fail that make cards and ATMs stop working. Look at Puerto Rico after Maria.
Regarding cash to carry, I basically am not concerned with pick pocket / theft, for a number of reasons, and am more concerned with a business being unable to take a card for some reason. For instance, my primary travel card is an American Express which is not accepted by small businesses in a lot of countries, such as restaurants and shops. In these cases I have a backup card, but I would prefer to use cash. I also ensure I have enough cash to always get me back home and in communication, so enough to replace my phone and get a return plane ticket.
I imagine locals don't need to carry as much cash as foreigners because they have a different set of concerns and easy / ready access to more cash without being charged exorbitant fees for access.
Its common for wealthy (upper middle class, not oligarch) folks in Russia to have proper safe at home, and to keep thousands of Euros in cash there.
They often use Euro's because Ruble devalues a lot. Additionally, they have justified distrust in the ability of the government to run the economy and banking system, and it is their stash in case either collapses.
So cash does not mean Crime, it could also mean you don't want to be left out in the cold.
Also, western privilege: western banks rarely close their doors and leave you without access to your digital money, and rarely hyperinflate it away without any recourse (though they also have, historically). While cash doesn't protect against the second danger, it well protects against the first -within- western countries. Now, in other places hoarding Euros and Dollars, it protects against both.
Anit-Money-Laundering (AML) laws, in practice, do not protect us from greedy billionaires. They protect surveillance and hyperinflation states from citizens trying to protect themselves against them.
It isn't like removing privacy stops crime, it just makes corrupting the government more profitable.
[0] https://en.wikipedia.org/wiki/List_of_corporate_collapses_an...
Let's go way back to the wild days of "utterly different tribes interacting." You know, really basic things are really very different, between people. What is legal are base definitions, but differences grow from there and increase. A system of physical currency bridges that divide.
Now let's think of "the Empire that takes taxes from all tribes." Of course there is an effort to standardize practices, so that Empire can collect vastly larger sums than any one or ten tribes, and use that money to build roads, forts, harbors and hire police/troops.
With this aggrandized example pair, think of the role of cash, banking and transfer of money. It is not "illegal" to handle money outside of accounting practices of Empire, but by keeping and holding your own money in your own ways so you are defining economic territory outside of the control of a centralized/tax system. Legions of accountants will oppose this, since the accountants are paid more by Empire.
With covid, the likelihood of bank failures has risen considerably as the savings money is drying up or moving out of cities and investment risks have raised considerably. Historically, whenever banks got systemically over-levered and they try to avoid a systemic banking collapse, they come for the commoners assets. Last time around they did gold confisaction. I remember in 08 they were talking about confiscating 401k money into the stock market.
This is no different. This is a creepy article full of trite anecdotes and observational BS that demonizes anyone that uses cash as a drug dealer or sex trafficker and doesn't mention the root issue.
And 40% of US dollars in existence were printed in the last 12 months: https://techstartups.com/2021/05/22/40-us-dollars-existence-...
I've never thought about rising stock prices as inflation before.
Cash is always more trustworthy than a bank, if you can ensure its safety. Many people during the greek "crisis" (eg. when the Greek government took money from the people to distribute to the foreign Troïka under the pretext of a misrepresented "debt") wish they had not stored their money in banks.
> 2. Crime. Sure, crime is conducted in cash
I don't have stats, but i think you'd be surprised how much of crime does not use cash. I mean sure, drug trafficking probably involves cash at all levels, but the most serious crimes committed by people in power don't. These people bank-wire funds to remote accounts, as exemplified in the Pandora (and previous) leaks.
Also worth pointing out, cash is the money of the poor. Even when you're too poor/indebted for banks to open an account for you, you can still handle cash daily to survive. Even when you have a bank account, you can usually withdraw your cash before being seized, because money seizures usually take at least a day. So, say your corrupt government/justice has indebted you to a boss/landowner for incredible sums: even if you earn your wage via bank transfer, keeping it in cash is your only option to avoid feeding the insanely-rich and eating dirt yourself.
If anyone has any good news sources please let me know. The economist was the last thing i was reading before it stopped putting out quality content.
In terms of other news sources - I have no great advice. Here in the uk, I read the Financial Times - it is also rather international - maybe have a look at it. I would say that it is ok rather than great - but it is nice to get your news from more than one place. Private Eye is excellent, but mainly just for a subset of uk news.
I would like to have one "go-to" news source that I could rely on. But that is apparently not possible. So I read a few different things, and try to judge from their different stories what is really going on. Interestingly, I find that hn is a good source of quality information and insight, although it (of course) doesn't cover everything that I want to know about.
I guess people just love to be contrarians on HN.
That's the reality for most people and they don't even realize it.
I guess once you have enough money it's different, but for an average non-millionaire chump, it's best not to trust anyone too much.
The risk of a banking/network error is significantly higher that way, although the risk that it affects all deposited funds is significantly lower.
Very little cash is deposited into an ATM. Any time I’ve deposited cash I’ve never seen it scanned (it goes into the drawer).
And if it were scanned at multiple points think of the cash in a register at a store? How many transactions does it go through before getting scanned again? Especially smaller bills?
Seeing that a bill was dispensed at an ATM on Market St in San Francisco then deposited by a restaurant in San Mateo 1 month later tells you what exactly?
Getting insight from someone's cash transaction over time, in aggregate, is an excercise in statistics and probably yields many interesting and surprising results.
Up to the bank as to what level of detail they record and where the data goes, but the sensors are usually there.
If you know 100 people pulled cash out of various amounts over time, and 1 person deposited $100 from each of them - that tells you 100 people all made nearly the same purchase of something around $100 from that person correct?
Even better if some portion of those funds sometimes end up in someone else’s pocket.
It’s mainly useful for detecting black and grey market activity, like someone selling drugs or sex work or whatever, and people working with them directly. Look at it Over long enough and you could probably identify almost all of the business associates and regular customers.
Same tricks are used to track Bitcoin.
That said, not usually worth it for anyone to do this, and it isn’t disclosed how common scanning or tracking this way is done (and some banks deny it), so your mileage may vary depending on your level of paranoia.
You take that fat stack of bills you made selling dime bags and you go to Walmart and you buy groceries with it or whatever. Only the things that require a non-cash method of payment need to involve the banking system. Even then you can buy prepaid visa gift cards to handle most of those case if you're ok with the inconvenience.
https://www.cnn.com/2016/08/03/politics/us-sends-plane-iran-...
It was their own money being returned to them and not pallets earmarked for development disappearing into the night.
But really I was just noting how we love sending pallets of cash to our adversaries.
We have no way of knowing how they spent those pallets of bank notes in either exchange.
The whole point was our government loves to use cash in deals yet label civilians with too much cash as criminals!
Agreed that asset forfeiture should be illegal.
> Some of the funds could have enriched both criminals and insurgents fighting the United States.
Literally in the article GP linked. You could argue that we don't know for sure, but the point is the US sends cash around willy nilly that can easily fall in the hands of terrorists while treating Americans like criminals if they have anything above pocket change.
Remember the pallets of cash being sent to Iraq?
https://en.wikipedia.org/wiki/Superdollar
TIL. Thanks!
I cannot believe people would dare suggest that such an upstanding organization would do such a thing. For shame! /s
> On 21 December 2011, the Irish High Court dismissed the US application for Garland's extradition,[4][25] as the alleged offence took place in Ireland and was therefore not subject to extradition.
I wonder why the UK doesn't have that clause but Ireland does?
That's very hard to believe. Citation needed!
It happened/may still be happening for all we know.
Link if it gets lost: https://en.wikipedia.org/wiki/Superdollar
Which I now realize might be true...
So there being no choice is probably correct in this case. At least with other countries there is some ways pressure them, with NK not too much, and not for measly sums of money involved.
> When designing CBDCs, public authorities should look to build in ways of countering fraud and other forms of illicit finance by looking to incorporate advancements in technology and/or innovative solutions that may improve the authentication and verification of transactions.
> Public authorities’ powers and use of data in any CBDC ecosystem to counter their use for illicit finance should be set out transparently in national legislative frameworks (see Principle 2) and those powers should not be used for other purposes.
We can expect bank lobbying in G7 countries for new legal kill-switch, data harvesting and analytics powers to "authenticate and verify" EVERY transaction that uses a national CBDC. Since CBDCs are scheduled for deployment by 2025, the pre-requisite national legislation would be needed by 2023.
Plus USD is the official (?) currency in Panama, and de facto currency in half the Caribbean.
Not to mention the western governments have been shipping cash by the plane load into conflict zones to pay off war lords and other leaders
The more turmoil in economies abroad, the more USD is in demand to replace failing currencies.
Turkey is a great example - people were paying a premium on USD just to get their savings out of Turkish Lira a couple years ago.
I also have 1 real US dollar that I keep in my wallet as a reminder, it was minted in New Orleans in 1901, it's 120 years old, and can't be inflated away like Johnson sandwiches or paper money.
I think they missed the point massively in this article, the ECB comment is pretty self explanatory.
What they mean here is that other central banks (Japan and China for instance) and autocrats (and not gangsters at least not significantly) prefer keeping their foreign currency in cash despite the extra costs because western countries have the annoying habit to lock foreign electronic funds on a whim.
https://en.wikipedia.org/wiki/Mansa_Musa#Islam_and_pilgrimag...
https://en.wikipedia.org/wiki/Great_Bullion_Famine
A long period of deflation followed by a long period of over-inflation doesn't scream stability to me.
As for the "why does nobody care part", the possible explanation is unconvincing. Yes central banks enjoy the power of being the sole issuer of currency, but the few cents per note they get to keep is hardly where their real interests lie.
I wonder how many others do the same? It adds up I imagine.
i've got ... ~$1000/cash in the house. There's an occasional consideration of regional power outages where we might need to leave the area for a day or two (has happened yet, but we came close twice). Mostly useful to pay handyman/lawn guys now and then, then top it up now and then. Have considered holding on to a bit more, but we've never really needed more than a few hundred at any one point, so not sure there's much utility.
Always having the money for a full tank of gas and a night of cheap accommodation can prevent those very bad decisions and situations where you need to call the local authorities to rescue you, or worse. It's a bona fide survival technique for the modern world.
If you are concerned about giving your data to Facebook, then you should also be concerned about giving your data to the banks. I'd argue that the banks have more important information on you, and you never known who they share it with
And also vending machines! (Especially when you're a tourist in another country.)
https://en.wikipedia.org/wiki/Deposit_insurance
It seems like most countries have an equivalent of FDIC.
All risks are relative.
People still use cash, but most of the "money" is tied up in finance's parasitism. So while the amount of e-cash has skyrocketed, cash is still circulating and in high use/demand among the people. I know that for facebook marketplace/craiglist I exclusively use cash... when I buy something from my neighbors or go to a non-chain market I go out of my way to use cash since it saves on transaction fees (and taxes, lol.)
I buy and restore classic cars as a hobby and I always buy/sell them in cash if I can.
It's pretty much only used by tax dodgers and criminals here now.
I'm actually in favour of that, not because I fear my current government but because it
- is convenient (much better than gift cards)
- feels good to be able to buy stuff without telling my bank and Google and who knows who else what I buy
- the banks reason is because it might be necessary in emergencies which also seems like a really good reason.
It's such a great solution and we're so close!
No-one will rob you when you have no cash to take, and they can't sell your phone anywhere since it could be traced (and the phone is now locked out and banned via IMEI, etc.).
Technology could make society so much safer, so easily.
And cards can work offline in an emergency, like they do on aeroplanes. Just normal shops would need to have this capability.
Do you really think criminals would give up this easy? Or go on to steal jewelry, watches, demand you buy gift cards as extortion or payment for stolen goods etc?
> tax evasion,
I'm fairly certain most significant tax evasion happens without any cash already.
> drug dealing, etc. immediately.
Again, do you really think this?
As mentioned above criminals doesn't have a history of just putting up a sad face and start doing something useful instead.
By the way, the more I learn the more I think we should end prohibition of more drugs, just like we did with alcohol. That could actually put a sad face on a number of criminals.
Is this sarcastic? You do realize the vast majority of tax evasion happens through banks right? Like African dictators stashing dirty money in European or Swiss Banks, or Mexican druglords using HSBC to launder money. Specifically in scandinavia:
> the leaks with the detailed administrative records of wealth, income, and taxes paid that Norway, Sweden, and Denmark maintain to offer a detailed portrait of tax evasion in the three Nordic countries. The findings are fairly shocking. Throughout the three countries, about 3 percent of all personal taxes are avoided. But among those with more than $40 million in assets — not the top 1 percent but the top 0.01 percent — about 30 percent of taxes are evaded [0]
Do you think the top 0.01% avoid their 30% of taxes by carrying cash?
What about drug dealing with cryptocurrency? Or petty crime with credit card copying? How would banning cash make a material difference?
[0] https://www.vox.com/2017/6/7/15745978/tax-evasion-zucman
Cryptocurrency-Fiat exchanges should also be banned. You can't copy credit cards in Europe due to the chip on the card.
These problems have largely technical solutions, we just need to stop fearing technology.
Ego of the coder