Cashless society? Not so fast, my friend!

For those worried that digital commerce will undermine our hobby, an excerpt from this weekend's Wall Street Journal:

"It turns out that good old-fashioned cash has a constituency—and investors may regret ignoring it. Shares of companies whose fortunes are tied to physical cash in a major way, such as ATM providers like Cardtronics or Diebold Nixdorf, or companies that transfer or protect cash, like Western Union or Brink’s, soared last year. Over the past year through Thursday, those four stocks on average are up 83%. That easily tops the average 39% gain for Mastercard, PayPal, Square and Visa.

Only two countries, Russia and Sweden, had a net substitution of cards for cash from 2007 to 2016, with cash in circulation shrinking as card payments grew…In other countries tracked, including the U.S., both cash demand and card payments have grown."

Cash might someday disappear, but IMHO I think several generations will pass before that has a chance of becoming a reality.

 

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I wouldn't be so sure about "several generations". Many countries have already abandoned coins. It's inflation rather than digital payments that is to blame. Here in the States special interest groups (which includes us collectors) can only hold off the inevitable for so long.

Once the price of nickel and copper go over a certain threshold it's game over. Even if it's technically illegal to melt coins what's to stop foreigners from exporting it by the truckloads once it's cheaper than mining it from the ground?

Rasiel

 

And I think you are correct. Look at how changing over to metrics never fully happened.

 

When a major power outtage occurs you might as well go to bed because you wont be able to spend your electronic money.

 

As with most statistics, they seem to have carefully crafted the story they want to tell. Stock prices of related companies might be tangentially relevant, but not a prime indicator.

They mention that card and cash payments both grew, but that is largely due to the fact that the economy has also grown.

What I'd be very interested in seeing - how much did each grow relative to each other? If cash payments grew 2% but card payments grew 3x that, that would sort of contradict their story. But they didn't include that data.

 

If the power goes out where can you go shopping anyway?

 

Anybody willing to trust their money to be stored on a silicon diode is a fool anyway.

 

Several of the countries that have gone cashless also do not have a happy electorate either. It's not like they had a referendum where they could have voted on these measures. Several of my friends in Florida also say they have several thousand dollars in cash squirreled away in the event of a disaster. I'm sure many others in other parts of the country do the same that are prone to hurricanes, earthquakes, tornados, etc. I can see the eventuality of doing away with the cent for commerce but not the nickel anytime soon, as that could be reduced in size, weather or not vending machine operators like it or not. The U.S. has always been on a slow boat when it comes to things like this. Doing away with cash in the U.S. would be like banning apple pie. It's an American thing. Even The U.S. Mint would likely keep making collector cents much the same as half & dollar coins even though they no longer circulate to any major degree.

 

Or on a server where it can be hacked and stolen.

 

I can go get my haircut, go to the fruit market, go to antique fairs, buy eggs at the farmers market.

I use cash all the time, I'm self employed and get paid in cash.
Cash is king.

 

Would not surprise me if one day there were a major computer glitch in the banking industry and billions disappear. The crooks in the banking industry will blame the enemy of the day and go to war to make it look good.

 

Sun Trust Bank in Daytona, FL has had multiple hacks that they have kept very quiet. My best friend In So. Daytona has had several hacks on his accounts there.

 

If that happens then it's the end of civilization anyway. It's not just the banking system that's electronic, the power grid, the military, transportation, the economy itself.... pretty much everything that makes the modern world go round depends on 1's and 0's.

Unless you're a prepper or live in an Amish commune it's tits up if the power grid is knocked out.

Rasiel

 

I sleep better having several stashes of buillon thank you very much.

 

Cash isn't going anywhere in the USA. It is a world reserve currency used around the world. The first person to see a cashless USA is still yet to be born that's how far away it is

 

People lived off the grid for eons. As humans we adapt in order to survive.

 

True but I think this misses the point. If we're going back to the stone age dollars are going to be worthless. Better to have lots of gold and ammo.

I can't think of a realistic scenario where we go back to paper and coins.

 

It's funny you should mention that. One night a couple of years ago I got online to check the balances of my accounts. I went into panic mode because all of my accounts had a balance of 0. They appeared corrected the next morning, but I never could get an explanation from my bank.

 

In the late 1970's I was sitting in a room of smart people listening to a pitch for a new thing called ACH (automated clearing house) and realized that once people could see how easily money could move electronically that all checks would disappear. Well the number of checks did not start to decline for another 30 years.

What I learned was that check usage is generational not fad based. Here we are fifty years later and I believe checks are still around. Fewer in number, but still around. My grandchildren might see a cashless society but I don't think I will live that long. Cash has too much appeal, especially as the world's politicians work to drive us toward socialism. That pesky cash thing is just hard to track.

 

Hell, if we're talking about going back to the stone age, gold might not be a good investment. You can't eat gold, and you might not be able to get anyone to trade useful things for it. Food and ammo would be most valuable.