Could it be the end of cash as we know it

COULD IT BE THE END OF CASH AS WE KNOW IT? During 2015 a chief economist from the Bank of England argued that getting rid of cash all together could be a positive thing for our economy. But how can this be positive? The argument put across is that if banks start charging negative interest rates then customers will start withdrawing their money from the banks but banning cash does not allow a customer to withdraw their money. So the argument could be set that banning cash could result in potential bank runs occurring. This is potential financial repression and capital controls that are about to take place. Imagine if the only place to store your cash was in a bank but that bank is charging you a minus 1% interest rate, then your paying the bank to hold your money and have no other option unless you send your money abroad. This is a smoke and mirrors event but the bottom line is that this is a form of wealth confiscation.

We are seeing this slowly come in and the trend is currently playing out because a very high amount of transactions can now be done on a smartphone app or just by swiping your card against a machine. Paypal and Bitcoin are also players of this new digital money economy and it has even gone to the extent where the UK government has banned cash sales from the 1 st September 2016 across the whole scrap metal recycling industry. India has recently banned cash and is restricting the amount of money a person can withdraw from the banking system. Australia is currently proposing the same procedure and Citibank Australia has stopped accepting cash all together. Sweden recently proposed to transfer its economy from cash to full digital currency and across the globe as we speak there is roughly $30 trillion dollars trading with negative interest rates. It could be said that the end of cash is already starting.

I believe this will come in the form of a policy or a new law. I feel the government will try and use criminal activity, terrorism and black markets to try and combat this without ringing alarm bells to its citizens, however, combatting criminals and terrorists will not be the governments main intention, confiscating wealth via financial repression will be their intention. This time is different because the central banks cannot print any more money to save the system when the next crash comes so the next source they will look to is the British public and their wealth. I personally feel the government will dip into British wealth to purchase UK bonds because when that time comes when we cannot borrow money from the free market and investors slowdown on buying UK bonds to pay fund public finances then they will look to the public to fund these finances. This is a potent recipe for strong austerity by cutting welfare, education, healthcare and other public finances on a major scale. We witnessed a dose of this in 2009 and 2010 but it did not go to the extent of what other countries witnessed. Next time will deem us the result of this.