The real war on cash is driven by consumer convenience, the IRS, and Anti-(Drug|Terrorism|Vice) government agencies. Government agencies want a paper trail to catch tax evaders and illicit activity.
Whenever I see a very popular business (usually a bar or restaurant) that takes "Cash Only". I think to myself "Tax Evader". Which may or may not be true. Sadly, they are painting a target on their back.
That's no longer the case, because you'd mostly just get a pile of worthless credit card receipts for your trouble now.
> I pulled out my debit card to pay and he made a face. "No more debit," he said.
> "Huh? Why not?" I'd paid for my coffee habit on my card for years at the Turk's. He used to hassle me all the time, telling me I was too young to drink the stuff, and he still refused to serve me at all during school hours, convinced that I was skipping class. But over the years, the Turk and me have developed a kind of gruff understanding.
> He shook his head sadly. "You wouldn't understand. Go to school, kid."
> There's no surer way to make me want to understand than to tell me I won't. I wheedled him, demanding that he tell me. He looked like he was going to throw me out, but when I asked him if he thought I wasn't good enough to shop there, he opened up.
> "The security," he said, looking around his little shop with its tubs of dried beans and seeds, its shelves of Turkish groceries. "The government. They monitor it all now, it was in the papers. PATRIOT Act II, the Congress passed it yesterday. Now they can monitor every time you use your card. I say no. I say my shop will not help them spy on my customers."
> My jaw dropped.
> "You think it's no big deal maybe? What is the problem with government knowing when you buy coffee? Because it's one way they know where you are, where you been. Why you think I left Turkey? Where you have government always spying on the people, is no good. I move here twenty years ago for freedom -- I no help them take freedom away."
> "You're going to lose so many sales," I blurted. I wanted to tell him he was a hero and shake his hand, but that was what came out. "Everyone uses debit cards."
> "Maybe not so much anymore. Maybe my customers come here because they know I love freedom too. I am making sign for window. Maybe other stores do the same. I hear the ACLU will sue them for this."
> "You've got all my business from now on," I said. I meant it. I reached into my pocket. "Um, I don't have any cash, though."
> He pursed his lips and nodded. "Many peoples say the same thing. Is OK. You give today's money to the ACLU."
> In two minutes, the Turk and I had exchanged more words than we had in all the time I'd been coming to his shop. I had no idea he had all these passions. I just thought of him as my friendly neighborhood caffeine dealer. Now I shook his hand and when I left his store, I felt like he and I had joined a team. A secret team.
I'm genuinely curious, if any of his fans are reading this, what is his appeal? Is it the political messages and well-drawn near future settings?
I can also never think of a good enough reason for this, especially in the UK where vendor-expensive Amex cards are far less common, and the majority of people use debit cards. To me, its severely inconveniencing customers - I know personally I've gone elsewhere to a different merchant that will accept my card to make a purchase.
If you want to be friendly with your bartender and other people with similar businesses, pay with cash and tip with cash. I almost always do.
 Assuming this site: http://1000000-euro.de/how-much-does-a-million-dollars-weigh... is correct.
Edit: Of course I'm confusing density with mass. Anyone want to work out the volume?
But they did ban gold in the US in 1933 without banning jewellery. The ban doesn't have to be perfect to be useful to a government.
Any banknote larger than 50 Euro is very uncommon here. ATMs don't give them. Anecdote: I was sure the 200 one is green and when I googled for the 100 note I discovered that it's the 100 which is green; the 200 is yellow. I remembered correctly that the 500 is pink.
Doing without the 100 USD bill would be problematic for tourists in those countries with very minimal credit card penetration and that insist to accept only pristine very recent bills, the ones that in the West would be looked at with suspicion. Example: former USSR central Asia countries.
Very uncommon yes, but I've gotten 100€ notes from ATMs when withdrawing ~250€.
I believe that once when paying the security deposit for an apartment in Vienna I used a 500 euro bill & it phased no one.
I witnessed it firsthand in Argentina until very recently, and in Venezuela and other hyper-inflation countries it's still a huge burden.
Translated quote: "Not having higher denomination bills leads to very high costs in transportation and storage because of the large volumes handled and because bills don't fit in small safes."
Other curious facts: Singapore has a 10.000 dollar bill (U$ 7.500), and Switzerland has a 1000 CHF bill (U$ 1070).
However, the Singapore bill won't be printed anymore, for the same issues (money laundering concerns).
I was once next in line at a bank in Singapore, and I watched the lady in front of me withdraw around 10 x $10,000 bills in cash. (They're golden yellow and very distinctive: http://www.singaporemint.com/images/facts/port10000.gif) She counted them carefully, then she put them in her purse and walked away.
Now Singapore's a pretty safe place to be, but how many other people watching were tempted to follow her and see if they could get their hands on US$75,000, in cool, untraceable cash at that?
Man can you imagine getting a letter like this when you're 75 ? What are these people to do ?
Yes, I understand if LE had their way we'd be paying with 5-spots, but convenience has to mean something also. Let's bring back the $500 bill and then index the entire thing to inflation such that there isn't more than a dozen or so steps between the smallest and largest monetary units.
I don't think this is a political discussion/argument we need to have constantly. Fix it once and then leave it alone. I'm also completely opposed to eliminating all currency and going totally electronic, which sounds like an even more dystopian state than the current one our betters have created for us over the last decade or two.
A large portion of this I see as people moving their transactions outside of the banking system. The main reasons are a loss in faith is the financial system (especially in Europe). The banking system is very expensive, and very shaky. Just look at Deutsche Bank at the moment. And the Europeans all remember the situation that unfolded near them in Cyprus.
Over time there will be more and more of the general economic transactions happening outside of the banking sector as the banking sector seeks to extract more wealth to pay off their bad debts and improve their solvency with haircuts, negative interest rates, bank holidays, bail ins, bail outs or capital controls.
It's an extremely dangerous option to try, though, as it could lead to people losing faith with the system even more and shows how desperate they are. Things might be worse behind the scenes than they look on the surface.
We see a lot of that in the states. You'll buy a car for $1500. Both of you call the "official" price $500. The seller pays less sales tax. You pay less property tax.
Yes, illegal. But drug-running it's not.
It's one thing to want to make things tough on drug dealers or terrorists. It's something else entirely to want to be able to observe and control every instance of money moving through the economy. We have to ask ourselves what the real goal is here. Or maybe a better question is: where are we going to end up?
I know in the states we've seen a lot of drastic action around organized crime, mobs, and drugs. We had the RICO statute, then various laws around money movement. All passed because of severe and dangerous threats. But now? All of that heavy firepower we passed to prevent severe threats is applied to the average citizen. The effects are not pleasant to observe.
Having said that, I notice that we might be moving towards an environment of negative interest rates. If that's the case? Then it makes sense for everybody to warehouse cash, not just drug lords and terrorists. Having larger denominations could be tremendously useful to tons of legitimate organizations.
Downfall Hitler spoof video related to negative interest rates I was watching yesterday: https://vimeo.com/65679960
I vote for a 1000EUR bill!
Negative interest rates will never "work" without also having capital controls.
Note that I'm talking about monetary policy now, that is central bank interest rates. Not commercial bank savings rates. The latter are typically either zero or slightly positive even if the central banks rate is negative.
In a negative interest rate environment inflation is not going to be a very low positive number. It is going to be much higher. That's half the aim. To inflate away the debt and pay it off with cheaper money. Instead of banks needing to pay the central bank to borrow money, the central bank is going to pay them to take it. And they have the power to coin. Inflation is going to be dramatically higher.
In my opinion, what should be done now is to let the market crash. The long term cause of the crisis has been the constant effort to stop the business cycle from occurring. Instead of having lots of little, regular, mini 'crashes' that would reallocate capital to solid businesses and erase bad debt, we have been propping up and preventing (to the best of the central banks ability) any markets' natural attempts to rebalance.
So we've had this enormous, multi-decade boom. 2008 was a chance to correct, and that was not allowed to happen. So now the bust we have will be ferocious and terrible, far worse than 2008 would have been. But there is nothing we can do. We should have taken our economic medicine years ago, and prevented these insane bankers from doing this for their own personal gain.
Central banks were established to 1) ensure a stable currency and 2) to be a lender of last resort. Since when did propping up the stock market become part of their purview? Or ensuring asset prices continue to rise?
If we don't take the medicine now with an economic down turn, then the problem will just grow bigger, and the next time it will be far, far worse. Just as now it is far worse than 2008. We are effectively screwing our children's prospects for our own greedy self interest.
You can only kick the can down the road for so long. With each kick it becomes heavier. Its now a boulder. Eventually we'll break our metaphorical foot on it, trying to kick it.
Because it's taking money from everyone and handing it to those in proportion to their ability qualify for negative rate loan, i.e., commercial banks.
Why would anyone think this is fair?
What's your plan here?
When there is a new design for any banknote, which happens every now and then (new security features added and so on) the issuing authority usually puts and end date to the old version a few years into the future. Otherwise it becomes very hard for the central bank to know how much money they have in circulation, and also they don't get the full benefit of the new security features if a lot of "old" money circulates along side it. As an example, I don't think any of the paper money I have in my wallet is of a design that has been valid for 15 years, or will be valid in 15 years from now. I have lived through the retirement of at least 10 different designs over the last decade, and at least three denominations were removed entirely.
That said, the use of US dollars outside the US might not be too sensitive to changes. I remember german D-marks still being a thing in the balkans even after the germans themselves switched to Euro!
The banks will stop giving that money out and start sending it back to the gov to be removed from circulation once you turn it in, but there is no date a discontinued note in the USA has to be turned in by.
Here's a source, there are many others. http://www.littletoncoin.com/webapp/wcs/stores/servlet/Displ...
For instance, I live outside the US and I have roughly $300 in older US $100 bills that was given to me and my wife as a gift for our wedding. No over-the-counter currency exchange or bank will accept the notes. I could probably find someone here to trade me something for the notes, but the effort/hassle is probably not worth it for such a low number of bills.
What are you talking about?
> the issuing authority usually puts and end date to the old version a few years into the future
Not in the US.
Apparently, how money works in most places but not in the US...
I can't imagine it would be very controversial however, if US authorities announced that "in 10 years, banknotes older than the 1960's will be invalid, you can exchange them for new notes before that". Why would it be controversial? It would be a big change after having so old money being legal tender, but it would be understandable not least because old money without modern features is likely much easier to counterfeit than new.
In any case: banknotes expiring completely or being made invalid/replaced by new editions with the same denomination isn't anything strange, even if it would be news in the US. So in that light, removing some denominations of Euro notes wouldn't be controversial. Remember: all the EU countries already quite recently had ALL their original banknotes made invalid (after period of conversion, which I believe has ended a long time ago in the original EUR-countries).
That depends on the issuing country. I'd guess it's related to whether they expired their banknotes before the Euro.
French and Dutch banknotes are now invalid, but German Deutschemarks are valid for exchange at any Bundesbank indefinitely. The same applies to Austrian and Estonian currency.
I would even be okay with getting rid of the $100 bill. Let's face it, people who deal in VERY large amounts of cash $100,000+ are not good people. Drug dealers or politicians (same thing in my opinion) don't use $20 bills as amounts that high get very cumbersome. If you find yourself in a situation with so many $20 bills that you physically can't carry them around, I have literally zero sympathy for you.
Slippery slope? Maybe, but as it stands I have no issue.
Having limits on transactions over 1000 euro (like France) does forces law-abiding citizens to handle transactions in a way that can be monitored by the security services (the non-law abiding citizens of course just ignore the damn law or wash the money through a front).
It's yet another attack on privacy, if I want to buy a bike from someone legally and pay in cash for it what business is it of the governments, it's a private transaction between two parties for a legally owned and sold item.
I'm rapidly coming to the view that Orwell wasn't far of the mark with "If you want a vision of the future, imagine a boot stamping on a human face - forever." except instead of an actual jackboot we just have the complete removal of privacy, fear of the boot stamping on your face instead of an actual boot.
That's the bare faced lie masquerading as an excuse. The reason they want to get rid of it all of a sudden is to cut down on cash hoarding in a negative interest rate environment.
>If you find yourself in a situation with so many $20 bills that you physically can't carry them around, I have literally zero sympathy for you.
I lack sympathy for the banks that would see a deposit flight to cash in the event of negative interest rates they lobbied for.
But Apple Generation does not care. We are used to being watched and patronized.
The number of things wrong with this statement. I don't like most politicians, but those two are very different. I'll just leave it there, because I don't even know where to begin to refute this.
Also, anyone that uses +$100,000 in cash is a bad person? This makes no sense. I run a charity, and if I choose to give cash to the organizations beneficiaries, is it evil? If I do the same thing personally and find $100,000 to give to charity or a family in need, am I evil now? Generalizing people who spend a lot of money (to you anyway, it's a very subjective and arbitrary definition of a lot of money) is just illogical.
Edit: Article more in line with current discussion:
I didn't down vote, because it looks like WSJ is catching onto the game. Going to Google in the usual way doesn't work either.
At what point do you stop to realize that you aren't doing anything useful to combat crime?