
In defense of cash: why we should bring back the $500 note and other big bills - fern12
https://theconversation.com/in-defense-of-cash-why-we-should-bring-back-the-500-note-and-other-big-bills-85880
======
pzxc
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.

~~~
e2e8
It is the article author's own book. Their list of publications:
[http://u.osu.edu/zagorsky.1/sample-page/](http://u.osu.edu/zagorsky.1/sample-
page/)

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white-flame
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.

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

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joecasson
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.

~~~
teslabox
> 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_...](https://en.wikipedia.org/wiki/Large_denominations_of_United_States_currency#Passive_retirement)

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_...](https://en.wikipedia.org/wiki/Large_denominations_of_United_States_currency#High-
denomination_.28HD.29_banknote_issuing_data)

------
jcranmer
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.

~~~
dragonwriter
> 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.

~~~
jcranmer
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.

~~~
majewsky
> 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.

------
CryptoPunk
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.

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fatbird
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_.

~~~
Spooky23
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.

------
vfXander
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.

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dmckeon
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.

