The threat from a cashless society

Bill Masen - February 15, 2021

( I think I’ve fully depoliticised this article, but if it breaches standards please delete)

Soooo consider this good people, and consider the implications VERY carefully.

If the demands to take the US/ UK/ EU/OZ  economy to a CASHLESS society, which has been muted  often in the recent  past, Its still the $ or £ but all transactions will be electronic and digital via smart cards.

OK so far?

(A)This WILL open up the opportunity for a government to introduce a TRANSACTION tax to fund  social welfare programs and other initiatives . What this means every transaction you make buying or selling. Food, fuel, clothing, utility bills, state taxes, medical payments, garage bills, tradesmens charges, gun payments, E Bay or other online payment systems they can levy a TRANSACTION tax DIRECTLY to YOU. And you cannot avoid it because it happens at the point of transaction. In person or online.

(B)They can then also monitor and record ALL of your purchasing history. Guns, ammo, supplies donations to organisations or political parties, Books they don’t want you to read. EVERYTHING will be recorded.

(C )This will also allow the state to SKIM your bank accounts like the European Union did with the entire population of Cyprus. The EU simply ordered all the banks to remain shut and turn off the ATM machines for a long weekend, During that time they skimmed an average of 10% of everyone’s Savings, Deposits, Current accounts, Pensions and Investments

(D)If you fall foul of the government and find yourself listed as a Felon or Domestic Terrorist  or anything,  They could (1) Seize all your money, (2) Cancel all your Cards (3) Ban you from owning a bank account. Even Bitcoin wont be accessible.

The last thing preppers need is a cash free society as it leaves the STATE in control and leaves you only with BARTER to get what you need to live.

Many modern prepper folks already have considered this issue and have taken steps to invest in Gold, Silver and Barter Goods as a buffer against a worthless or voided paper dollar.

And this is why I agree with Pops new post strongly recommending we cache some cash for when TSHTF.

12  

Here’s a link to the post by Pops that Bill Mason mentions at the end of his topic.

And I have to agree with you Bill, there will be many negative effects to a cashless society.

One that you didn’t mention is that if there is a wide spread power or internet outage, that shuts down commerce. You won’t be able to go to your local grocery store and buy food. I used to work in retail and when our credit card machines were down we only were able to take cash. And i’ve even shopped at some stores during a power outage and they manually rung people up using a calculator and cash. 

I will have to disagree with you on the point that bitcoin won’t be available though. I’m not super knowledgeable on cryptocurrencies, but from what i’ve heard they are designed to be an alternative to traditional banks. They are decentralized and can be stored offline separate from your bank. If a government went to a cashless society, cryptocurrencies would skyrocket and gather much more interest. Especially for the privacy conscious and preppers who don’t want to store all their eggs in one basket.

I hope I never see the day of a cashless society. I love the privacy implications that come with cash. I can go to Walmart and pay cash and no one there knows my name or who I am. If that goes away, there will be a permanent record that Gideon bought this and this item on this day and that information will then be sold and traded with other organizations for marketing, statistics, and advertising purposes.

 

Good points Gideon, imagine society et al with a cashless society and we get another Carrington event or EMP ?? , absolute chaos.

But to access Bitcoin etc you need the internet, a phone line account and electricty, if the state blacks you then you cannot have phones, internet and possibly even power….. so no access to bitcoin.

 

Your post is a good reminder Bill of why it is important to be thoughtful about how you acquire your preps. Any of us in an electronic world can be stopped cold, however, the person of good reputation and character will be able to sort it out quicker.

There were provisions put in place in Canada and other countries to commandeer resources from citizens during emergencies. I believe there was such an act in the USA during the avian influenza pandemic.

Currently, if a person uses a points or store card to make purchases, that information is recorded in addition to using any debit or credit card. One of my grocery stores can pull up a substantial history as can other vendors I deal with. If it’s electronic, it’s recorded.

Also, as a quick aside comment: if you apply for store points cards not a store credit card, many stores will pull a credit bureau on you and that inquiry alone can actually bring your credit score down. This is not widely known and be careful of this practice when applying for any points cards.

What I buy is justified and legal because most of my preps are part of my normal lifestyle: groceries, medical supplies, house repair and maintenance, storage, tools, etc. I am careful about quantities and it is easy to justify due to living in a rural town and winter weather.

I was told a long time ago to only use cash when making obvious or larger prep purchases. It is not always possible given the current necessity for online shopping during the pandemic.

Some wise preppers advised me many years ago to ensure any cash on hand was in smaller denominations. Coins for change and smaller bills are much more practical than wandering around trying to find change for a $100.00 bill in any crisis.

Cash might also be needed in addition to barter in order to seal a larger deal.

During a crisis (and this has already happened in Canada) like the Montreal ice storms, stores were charging grossly inflated prices for a single candle that one would have paid 50 cents for the day before the storm. Canada enacted a type of “anti-gouging” act to prevent this afterwards, however, during a crisis there are always people of less than noble character who will go out of their way to chance breaking the law and over charge or rip off others.

 

Canada has gotten rid of using the 1 cent penny right? (you guys call it a penny too right?)

I’ve heard the US talk about getting rid of pennies for years and they would just round things up to the nearest 5 or 10 cents and after a while it should be the new norm and we won’t really notice anything. 

The reason I bring that up is because is because some preppers collect pre 1982 US pennies in hopes that the US will get rid of using them. If they do, then people will legally be able to melt them down for their metal value. And each pre 1982 penny is 95% copper and has about $0.025 worth of copper in them, more than doubling what they have.

Just look on YouTube for “copper penny sorter” and you’ll see people making DIY sorters, or electronic sorters and they pour in buckets of pennies to get sorted. They then will take the non copper ones back to the bank. 

 

Hi Bradical, Yep, we call them pennnies, too. And you are right, Canada did get rid of the penny. We also no longer have the $1.00 or $2.00 bills. We carry a $1.00 coin (the loonie) and a $2.00 coin (the toonie).

There is talk that we are losing our $5.00 bill for a $5.00 coin (that one will be called: “hey knock it off already – these darn coins are too heavy) Seriously, we are dreading it if the $5.00 bill is changed over as they have suggested.

You used to be able to use copper pennies on batteries if I remember correctly.

Will they allow people to melt them down for sure? In Canada the pennies went back to the banks for destruction as the went through circulation. I could be wrong, but I don’t think the metal dealers were allowed to buy them.

 

I didn’t know that about the $1 and $2 bills turning into coins. I personally would like that though, I like coins and remember using larger denomination Euro coins when I visited Europe and thought it was cool. 

You made me laugh about the $5 coin haha!

And you know, I really don’t know for sure what would happen if they discontinued pennies. It probably sounds like they would do what Canada did and take them for themselves to melt down and destroy. It’s just what i’ve heard from other preppers years ago that once it stops being considered legal currency it isn’t protected from the law that makes it illegal to melt them down. 

It makes sense from a financial standpoint to get rid of pennies as they cost more to mint than the face value, and also the same with bills moving to coins as coins have a much longer lifespan than bills do. They have to print less as they can stay in circulation longer before being worn out and needing to be destroyed.

Hey, I have some american coins from the 1800’s that still look great but don’t have any bills older than 30 years old. 

 

Here’s one if you are storing bills for emergency funds. I don’t know if your paper currency is now like ours, which is basically plastic, but people have stored bills in a container under the sofa and it melted because it was too close to an electric heater.

I checked it out and it doesn’t take much. Another really interesting change is that in Canada anyway, you are no longer allowed to store cash in your safety deposit box. Big problems if they catch you. I didn’t even know that had changed until I rented as safety deposit box and read the contract. Weird, eh? 

 

Bill, am going to try to ramble here in reply with much effort to keep the politics divorsed from subject – although real difficult to do.

I approach the anticipated solution by the study of the WWII experiences.  Thoe folks still had cash but it was hypernflated away – no value.

Re (A); Some contemporary background; USG is no longer funded off of Treasury appropriations from Congress. The Federal Reserve System is used. Of course taxes are still collected but not for social welfare programs (the “other initiatives”: Yes!).  There are already indirect transaction taxes along with the direct taxes. Financially speaking, indirect and direct taxes are the same. A revenue stream is required to activate the transaction.

Re (B); ALL purchasing of significance is already monitored. This dpes not represent ipso facto evil.  It’s a legitimate function of government. The big stuff like corporate transfers of foreign exchange (FOREX) overseas are monitored (in theory). If, for example, a private-citizen prepper orders from a forestry supply house some chemical to accelerate decay of tree stumps for removal and the order is large and from a postal code in Central Park West, Manhattan, monitoring will occur. A private citizen prepper stockpiling pharma WITHOUT medical doctor (and related licensed professionals) participation in transaction, anticipate the transactions to be monitored.

We Yanks don’t have the EU / Cyprus long weekend problem.  We have a long forever.  A national news release that, for example, OPEC is going to or not going to or meeting somewhere to discuss… effectively accomplishes what a bank holiday does in the land of Aphrodite.  Last week’s announcement of a planned sale of oil from the Strategic Petroleum Reserve, effectively accomplishes the same as a bank holiday. It’s all about purchasing power parity (“P3”) of one’s money. 

In WWII China, food and medicine were valuable and traded.  

Isn’t “investing” in gold, silver, a monitored transaction when thresholds reached ?

Feet Notes:

FN1:  One’s individual and group health is more valuable than precious metals and gemstones.

FN2: One’s prepper skills are more valuable than plans to trade anything.

……

Anything new under the sun ?

Next best hospital in east Med, next to Rambam, Haifa is RAF Hosp Akrotiri, Cyprus 

 

13 months ago wildfires took out the power grid for a large section of coast just south of me.  Complete towns without any electricity, just when they were full of Christmas/New Year holiday makers. Many people just filled up on fuel or groceries and left without paying, because they didn’t carry cash.  I think this was a wake up call to everyone, govt included, about how vulnerable a cashless society is. 

The blackmarket runs on cash, and not only for illegal items. Lots of the building trade is still done by cash here in Australia. That’s not going to change, regardless of what government wants. There will always be people willing to accept cash. The only issue is how to get more when you run out. You need something to sell. 

 

Was reading some news articles and saw this one that there was a credit card outage in multiple businesses today. Just goes to show how companies can be in trouble of continuing business if they rely solely on one method of payment

 

Good point Jay. Also cards of any kind can malfunction, become damaged or lost. Backup cash is always a good plan.

 

Thanks for the mention Bill, you bring up some valid concerns. Gideon also points out the big weakness with digital. I’ll add that anything that can be programed can be hacked. We know Russia is way up in our business, we just don’t know how far. We do know they’ve hacked deep into government and business, banking seems an obvious target.

Modern life is surely interesting; computers, the ‘net, “digital life”  are both a blessing and a curse. I stumbled on my first bulletin board in 198x while trying to dial in to a lumber yard that I heard had lumber pricing online. The BBS was a way out there militia group in the Sierra Nevadas. LOL Not my cup of tea mind you but pretty interesting reading.

That is the thing about tech, the possibilities are amazing, but so are the pitfalls. I’m a knee-jerk Luddite, but also an early tech adopter, hard to reconcile but there it is. I bugged out after 9/11 to an Ozark farm to build my 19th century skillset—while doing remote design work via microwave internet connection.

I try to be a prudent digital user, taking advantage of the tool but understanding the ramifications.

We all leave a digital trail, by design. Every word we post on this and every other site is a part of our permanent record, IPs logged, words sent to some data store along with every site we visit, Amazon purchase, gmail message. BTW, it isn’t this site owner’s fault, it’s the internet, it’s out of their hands. Google just announced they will no longer sell ads based on snooping on your internet browsing. Thanks?

Same with any digital transaction. I read 10 or 15 years ago that credit card companies could predict divorce with a fair amount of accuracy up to 2 years before it happens based on spending alone. OTOH, anyone of a certain age will remember how difficult it was to deal with banks in the before times, the monthly rigamarole of balancing the book. Still,even with that knowledge, all my finances are online now, my balance and every transaction going back years available in two or three clicks. My debit card has an RFID chip, but I’m old enough that I still have a checkbook, I just don’t know where it is, LOL.

The point of this rant is not a paranoid manifesto, LOL, but more an acknowledgement that digital infrastructure is now as important as any other of our modern systems. Internet, communication, power, gas, oil, water, transport all are critical, all need to function flawlessly for society to operate smoothly. But each is a pinch point as well. Preps are simply a way to provide a small cushion of resiliency on the off chance one or all of those systems stumble.