Benefits of a Cashless Society

The Benefits of a Cashless Society

David Scheeres, CEO Aspen Waite in Wales

I have to confess that the title of this article is somewhat misleading.

I don’t actually believe the benefits of a cashless society outweigh the dangers and disadvantages so I will make my stance on the subject transparent immediately.

As a numismatist I am interested in coins, cash and currency and also their sophisticated use as a tool for promoting ethical ambition and free trade. In my early years I was greatly influenced by Professor Fernand Braudel’s works on the development of Civilisation and Capitalism between the 15th and 18th Century and appreciated how innovation and trade made huge impacts on Society and all was fuelled and underpinned by the ability to measure and store wealth.

But let’s focus on the implications of a cashless society as the article title intimates.

Benjamin Franklin famously, once, said;

“Any society that would give up a little liberty to gain a little security will deserve neither and lose both”.

So, what has liberty to do with a cashless society? That is simple to answer. Liberty is the state of being free within society from oppressive restrictions or interference being imposed by authority on one’s way of life, behaviour, or political views. To remove cash is a restriction of choice and an inhibition.

One of the insidious aspects of the Coronavirus pandemic has been the reluctance of shops to accept cash. Those shops that have remained open, and in particular certain supermarket giants, have discouraged people from spending notes or coins or have banned their use completely.

Why? Ostensibly this is the “right” thing to do to help stop the spread of the virus that can apparently live on surfaces for several days or not at all according to some epidemiologists you read.

In our rush to appear to be good citizens and compliant to prescribed “common sense” it is easy to overlook the logic of the matter. A customer goes into a supermarket and handles goods from the shelf that may have been handled several times by other customers notwithstanding the supply chain and the shelf stackers, to then place it on a belt where it is handled by a shop assistant who then hands it to you. The wearing of gloves by some customers and shop personnel compounds the problem by introducing insouciance in hand washing with the virus passing from the gloves to other products, surfaces and of course the face.

How many times did you touch your face in the past ten minutes? Trust me you did!

At the till we will assume you have already played the role of a “Typhoid Mary” and spread the virus around the store and on your shopping but you are told now that you cannot hand over cash because of the danger of contaminating the unfortunate cashier.

Utter rubbish and poppycock!

The real reason is quite simple, by avoiding the use of cash the store does not have to pay security firms to collect it, pay bank charges for cash handling, avoid theft, fraud and the potential for accepting counterfeit cash. This is not a conspiracy theory; this is fact and reality and the current pandemic is allowing the larger retail chains to shamelessly exploit the situation by instigating measures that both they and the previous incumbent Governor of the Bank of England, Marc Carney have been advocating for years.

I will not use this article to focus on the vulnerable members of society who cannot access credit easily as my focus is predominantly historical. It is up to the reader to form their own opinion of other possible social and political issues surrounding this subject. Yes, I have an opinion but the purpose of my article is to educate primarily with historical facts and not speculation although I will suggest some overt ways in which electronic credit could be misused by those who administer it.

The dangers of slipping into a cashless society creates considerable unease in me because I resent the potential for any government to monitor and log every transaction I make and have total control of my liquid assets. The implication is profound. We operate, and have done so since the abolition of the gold standard, a fiat

currency. What is a fiat currency? This is a currency that is established as money, often by government regulation, but that has no intrinsic value.

Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value. In the scenario of potential negative interest rates the possibility of a government to seize deposits is easy and if there is no cash in society there is no possibility of avoiding this happening.

Could this really happen in the 21st Century?

It already has in Cyprus where the government limited withdrawals and imposed a “haircut� tax on savings and ostensibly plundered people’s banks accounts without their permission reducing their savings.

If society is run totally by electronic credit the potential for monitoring people’s expenditure and indirectly their politics, sexuality and lifestyle is completely open for exploitation.

“Sorry Mr Scheeres, you can’t have another glass of wine because the terminal says you had one already and you filled your Car at Tesco ninety-six minutes ago.” In a political context your past could well revisit you and possibly a change in government persuasion may target you as a potential dissident. “Did you really buy the Morning Star for two years Mr Smith? “We know you are a member of XYZ party Mrs Jones”.

Is this happening already? China is currently integrating credit with facial recognition apps and controlling the mobility of its citizens by utilising GPS recognition technology in smart phones. No smart phone, no travel.

This is of course in addition to the mandatory carrying of identity cards. Mandatory facial recognition on smart phones was introduced in China in December 2019 to access the Internet.

During World War 2 in Holland the majority of Jewish people arrested and deported by the Nazi’s to be murdered were not betrayed by their neighbours or workmates but by government records that allowed them, in a liberal Dutch society, to avoid the payment of tithes to the Church by registering their religion. Apparently, that took some weeks to administer but imagine access to an immediate accessible database that not only registers religion but can track expenditure patterns including diet and literature.

Similarly, any dispute with a government agency could easily be quelled by withdrawing electronic credit leaving you homeless and unable to buy food. Is this some unrealistic dystopian nightmare? Not if we allow it to happen.

The fundamental question has to be do we trust our elected governments and the banking system?

A lot of history is suppressed or massaged by the media because it is controlled by vested interests. The Press Baron Lord Beaverbrook

famously said in the 1920’s “He who controls the press controls the nation.” Beaverbrook understood this and owned newspapers on both sides of the political divide. This is a quotation that has now been expunged from the Internet so difficult to find.

So, dealing with reality should we trust governments and the banking sector? Let us examine relatively recent history for one example. I will refer to USA and German history as this is easier to determine from extant documentation and also is a dramatic illustration of what has happened previously that has had ramifications up to the present date.

Following the end of the Franco-Prussian war, tribute payments in gold from France began to increase the German currency supply.

Bismarck was pressured by the international bankers to assist in the economic exuberance following the defeat of France with changes to the corporate liability laws which allowed, for example, the incorporation of the Deutsche bank.

Speculative investment during the period resulted in a boom of intense economic activity leading to unsustainable overbuilding of steamships, railroads, factories and cultural and social edifices. The resultant inflation undercut spending power which drove depositors to demand gold in preference to silver.

The banks needed to keep possession of their reserves of the more valuable gold in order to maintain economic control. The runs on German gold lead to the banker’s insistence that the answer was to remove the silver from circulation so as to stabilise the price of gold. The end of the German silver “thaler” marked the death of one of the oldest currencies around which had been the model for many others.

Austrian Maria Theresa Silver Thaler dated 1780 one of the most widely distributed coins ever circulated and trusted globally for more than a Century. This coin was used to trade in the Far East and the Americas.

The Spanish “weight of silver,” translated as “peso de plata” was meant to reproduce the ancient German thaler. The crosscultural transliteration of “thaler” became ‘dollar” which became the common name for the peso de plata. It was the Spanish dollar, based upon the German “thaler” that inspired the United States silver dollar. When Bismarck took the German Empire off the silver standard in 1871, the calculated effect cascaded around the world in an immediate drop in silver demand and put downward pressure on the price of silver. The U.S. National Bank System had been issuing banknotes that were fractionally backed by the bi-metallic standard of gold and silver with gold valued at approximately 16 times the price of silver. This drop in silver prices was felt most acutely by creditors who had advanced loans that could not bring more in repayment than agreed as denominated in gold or gold-backed banknote dollars, but might be paid off in devalued “free” silver dollars. By the time the price of silver

had sunk to less than half of the 16:1 ratio (set forth in the USA Coinage act of 1834), well lubricated overtures were made to key members of Congress by Ernest Seyd, a paid lobbyist for the Bank of England. Seyd had been sent from England with £100,000 (about a half million dollars) in political contribution cash money and an unlimited line of credit on top of that, to arrange for passage of a bill that would do in the U.S. as Germany had done, and with passage of the Coinage Act of 1873, the United States dumped the silver standard. According to Senate sponsor of the bill Samuel Hooper, Seyd was the actual author of the Act. With the ease of conscious of a man who was merely doing what was asked of him. Seyd said,

“I went to America in the winter of 1872-73, authorised to secure, if I could, the passage of a bill demonetising the silver. It was in the interest of those I represented – the governors of the bank of England – to have it done. By 1873, gold coins were the only form of coin money.” --Ernest Seyd Lobbyist for the Bank of England In what came to be known as “The Crime of ‘73” the silver price-crushing effect was

Public Domain, https://commons.wikimedia.org/w/index.php?curid=2448374

devastating to western mining states where silver mining was an important part of the economy. The miners and farmers who had found hope and economic prosperity under a silver standard would fight for the next quarter century for a return to “free silver” and became what were known as the “Silverites.”

In the years following the American Civil War, legions of veterans went to work for the largest employers of the times which were the railroads. The railroad building frenzy was fuelled by the plentiful cheap labour, and special favours granted to the railroads such as government land grants, financial subsidies, and easy, low-interest credit. Over 33,000 miles of track were laid by 1873 with a great portion of it serving no immediate economic interest.

Many of the businesses and facilities that grow up around railroads, such as depots, loading docks and factories were correspondingly overbuilt as well. This over building lead to a speculative crash when the national bank system interest rates rose in reaction to the increased demand on the money supply which had been diminished with the removal of silver.

Farmers and manufacturers who were dependent on loans to offset market, or in the case of farmers, seasonal fluctuations were devastated when they could not get the loans they needed. The resultant recession was severe, and few seemed to realize that the panic of 1873, as it came to be known, was the direct result of international bank directed government policy.

The formula was and is repeated like breathing. Inflate the money supply and cause a boom, deflate the money supply and cause a bust… inflate the money supply, deflate the money supply…inflate, deflate. Explain it all away as being the normal business cycle with the occasional naturally-occurring crisis that requires special intervention. This same boom and bust cycle would be used over and over to force policy makers to shape political, economic, and social ends as dictated by the “money power,” as Abraham Lincoln put it. If a boom cycle is

truly a normal market development due to some favourable condition or innovation, it is actually to the detriment of the bankers.

Economic prosperity carries with it some amount of inherent inflationary pressure.

This creates an increase in money supply as idled funds are lured out of hiding and find their way into investments and purchases.

This creates a pressure on lenders to lower interest rates so as to encourage even more borrowing, investing and spending during an already heated market. This is bad business for banks whose business is the charging of interest. When an economic boom produces big enough profits that loans can be retired, or worse, that further expansion can be funded by profit, as opposed to more borrowing, this is very bad for banks.

If a boom period is allowed to continue for too long, it may be noticed that the banks are not as all important as they have made themselves out to be, so it must eventually be stopped. The crashing of an economic boom can be as easy as to call in all existing loans and to not make any new ones. The inevitable percentage of defaults is always a bonus in the form of the assets that may be seized, but the real advantage is the flood of higher interest rate loans which may be made when the hunger for loans returns and lending is resumed.

A second and more invisible way to stop a boom cycle is to keep pushing in cheap credit until it boils over. Assets are priced upwards until they are inflated enough that a correction is automatic when high prices become the cure for high prices. If the crash can be made to be hard enough, then as an added bonus, history-changing measures can be put forth to cope with the scope of the crisis. A series of panics were instituted throughout the remainder of the 19th century. The internationally-connected, central National Bank was frustrated by the competition of the surviving State-chartered banks and began to hatch a plot to retake the economy. The first step was to remove the interest-free Greenbacks from circulation.

Less than a year after Lincoln was murdered the bank lobby pushed a bill through congress. Known as the “Contraction Act”, the Funding Act of April 12, 1866 was passed, authorising the Treasury to retire $10 million

of the Greenbacks within six months and up to $4 million per month thereafter. This was slightly relieved when it had led to the panic of 1873 and the implosion of the railroad building bubble. After a short recovery, another bill was passed in January 1875, called the Specie Payment Resumption Act, which authorized a further contraction in the circulation of Greenbacks to a point that the paper in circulation was on par with the gold reserves of the Treasury.

The Federal Government ran budget surpluses in several of the years during this period, but as the greenbacks had been taken out of circulation, the existing currency supply was composed of National bank notes, which were debt instruments printed by the National Bank in exchange for interest-bearing Treasury bonds. To pay off the Treasury bonds to the National Bank System would have been to eliminate the money supply, and the Bank was again entrenched into all aspects of the economy.

The restriction of the money supply was the direct cause of deep recessions that swept across America.

By 1877, starving rioters were setting the country ablaze as they burned idled factories and looted from warehouses and shops from New York to Chicago in reaction to the perceived symbols of affluence. Yelling “give us our greenbacks” and demanding the re-monetisation of silver with angry cries condemning the “Crime of ‘73” the rioters protested the restriction of the money supply. T he Central bankers had nearly accomplished their goal, but full control over the money supply still eluded them. In a letter to the 1877 meeting of the American Bankers Association (ABA), secretary James Buel advised the continued and systematic subversion of the government and of the Press when he wrote, “It is advisable to do all in your power to sustain such prominent daily and weekly newspapers, especially in the Agricultural and religious Press, as will oppose the greenback issue of paper money and that you will also withhold patronage from all applicants who are not willing to oppose the government issue of money.

To repeal the Act creating bank notes, or to restore to circulation the government issue of money, will be to provide the people with money and will therefore seriously affect our individual profits as bankers and lenders. See your Congressman at once and engage him to support our interest that we may control legislation.” --James Buel, American Bankers Association President

Morgan.

President James Garfield won the 1880 election after serving for 9 terms as a Representative during which he was Chairman of the Military Affairs Committee and the Appropriations Committee and a member of the Ways and Means Committee.

As a ranking finance committee member, he was well immersed in the nuances of inner economic workings. In his 1881 Inaugural address he revealed his formidable understanding of the way things really work,

In 1891, it was then decided by the bankers to collectively pull the plug on the economy using the tools already at their disposal.

Orders were sent in a memo to the directors of all the ABA banks that on a particular day, three years in the future, the banks were going to work in unison to crash the economy.

“Whosoever controls the volume of money in any country is absolute master of all industry and commerce…And when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.”

--James A. Garfield President Garfield who had a long record both of being staunchly opposed to a fiat currency, and in stark opposition to the banking interests around him in his stand for a return to bimetallism, died on September 19, 1881, after being shot by an assassin on July 2, less than 200 days into his presidency.

By 1890 the calls for relief for the western mining states hardest hit by the demonetisation of the silver and by the farmers who continued the fight for free silver had led to the passage of the Sherman Silver Purchase Act which required the U.S. Treasury to purchase millions of ounces of silver using notes backed by either silver or gold. In a predicable nod to Gresham’s law the holders of these certificates would rather they be redeemed in gold and the gold began to disappear from the Treasury reserves. Reserves fell below legal minimums and President Grover Cleveland borrowed $65 million in gold from New York Banker J P

In economics, Gresham’s law is a monetary principle stating that “bad money drives out good”. For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will gradually disappear from circulation

That memo was revealed before Congress a few years later and is recorded in the Congressional Record of which an excerpt reads, “On Sept.1st, 1894, we will not renew our loans under any consideration. On Sept. 1st we will demand our money. We will foreclose and become mortgagees in possession. We can take two-thirds of the farms west of the Mississippi and thousands of them east of the Mississippi as well, at our own price.

Then the farmers will become tenants as in England…” --1891 memo to members of the American Bankers Association as printed in the Congressional Record of April 29, 1913 The banks made their move a year early and caused the Panic of 1893 with the raising of interest rates and the restriction of credit.

Millions of loans were called in and America went into receivership. So hard hit was the middle class, that it was a common sight to see newly-built houses simply walked away from by their owners, when they could not obtain mortgage refinancing. The image of the abandoned Victorian “haunted” house was so prevalent that it became part of the American psyche.

The runs on the bank through 1894 were so horrific that it was still on the American mind and became the central topic of the 1896 presidential election. During the Democratic Convention, free silver advocate William Jennings Bryan gave his famous “Cross Of

gold” speech which is considered some of the most moving oratory ever offered at a political convention. Jennings, who ran both times on the free silver platform lost both the 1896 and 1900 presidential elections to William McKinley who served until his assassination in 1901 and the presidency passed to Theodore Roosevelt In an attempt to increase liquidity during the Panic of 1907, President Theodore Roosevelt again authorised the Treasury to issue Greenbacks, unsupported by hard assets.

Now, at this moment in history, we are drifting towards the largest Fiat Currency the world had ever known. I do not have the time or space to continue this history but ultimately the Federal Reserve Bank was created on December 13th 1913 by the Federal Reserve Act which lead to the abolition of the Gold Standard in the USA to an extent that private ownership of Gold was made illegal with lengthy prison sentences and huge fines for those found guilty of possession ( except of course the banks).

The Federal Reserve bank or “Fed” as it is colloquially called is a brilliant marketing concept. In one action a Monopoly and banking Cartel was created and it is owned privately by 12 International Banks and is accountable to no one and its stocks are not traded. The owners include foreign central banks but no one knows what percentage is owned by them or what the payment was made for ownership but it has a Government statute guaranteed 6% interest rate on borrowing regardless of the economy.

The Federal Reserve enjoys a total monopoly in its place as the only central bank in the USA. It is ensured by law that buying its shares is a mandatory condition of its banking cartel doing business with it. It has no competition and it sets its own market conditions. As far as the bulk of the population is concerned the “Fed” is a government institution with the Nation’s best interests at heart, in reality it is a commercial company with its owners’ best interest at heart.

The workings of the Federal Reserve Bank have been shrouded in mystery, subterfuge and misdirection since its inception and it

is enlightening and sometimes amusing to read challenges on its activities in Congress that are met with rebuttal and obfuscation.

It makes the behaviour of politicians, who will never commit to a “yes” or “no” answer in interview, appear amateurish.

We now see a very subtle interaction between Government and Banking and the potential for global centralisation of government, a true potential dystopian society in the making. The groundwork for this is already in place with Agenda 21 and Agenda 2030 which declares an ambition of mutual international sustainable development.

An ironic observation on the interaction between Government and banking would be this statement which form part of Karl Marx’s Manifesto of the Communist party;

“Centralisation of Credit in The Banks of The State, By Means of a National Bank with State Capital and An Exclusive Monopoly” --Fifth Plank of the Communist Manifesto, Karl Marx 1848 Based on historical fact, the purported guardians of our wealth do not have a fantastic track record of benevolence towards its customers and to allow restrictions on the portability of wealth additionally creates opportunities of exploitation beyond the simple control of assets and introduces an additional moral aspect.

Last year I tried to pay £150 cash for my daughter into her branch of Barclays and was told that they could not accept cash from anyone other than the account holder.

When I questioned this, I was told by the teller it was because of money laundering regulations and the deposit could be drug money.

Clearly depositing £150 into her account would not make my daughter the most astute drug dealer in Wales but the underlaying and disgraceful legislation behind this restriction is an affront to liberty as it assumes criminality before the event and before being proven. The use of the verb “could”

in this context assumes an unproven fact and is an insult to the majority of the bank’s customers. It also restricts the usefulness of physical cash which of course is to the banks advantage.

I will conclude by asking you to consider the benefits of a cashless society and of course who benefits from such an “advance”.

These are my personal views and opinions and not those of Aspen Waite Group.

David Scheeres CEO Aspen Waite in Wales About David David is the CEO of our Welsh division, a capable innovator with considerable experience in product design, “lean” manufacturing techniques and supply chain organisation and liaison. “Blue Sky” thinker and instrumental in stimulating several projects including harvesting waste plastic at sea, waste to energy initiatives using recyclate such as carpet waste and organic by products, thermal densification of medical disposable plastic waste, current project with Fortune 500 company with pilot plants in 2015. Good personnel skills and enthusiastic motivator.

For more information and to learn how David could help your company, you can contact him on LinkedIn or by emailing david.scheeres@aspen-waite.co.uk.

Find out more about #TheAspenWaiteWay at www.aspenwaite.co.uk

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