What is the Future, Hard or Electronic Currency?

Will electronic currency (i.e. debit/credit cards or something similar) ever replace hard currency?

If so, why and when?

If not, what is one thing that hard currency will be needed for?

 

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Trade with the Amish?

 

Only if the gov't deems it to be. This could happen in case of a currency failure and the country would have to switch to a new system.

However I believe if the gov't didn't create a hard currency, many alternatives would pop up and people could use those (AOCS for example).

 

Exactly, people would turn to something else they trusted - precious metals or other forms of barter.

What is AOCS?

 

Yesterday in my area of the country a hurricane knocked out power across my city. The only way to purchase food, gas, water or anything when the electricity is out is with cash. That is an emergency scenario. However, there are alot of transactions that people simply want to keep private because transactions are personal, illegal or because it's simply not practical to use an electronic form of payment such as a yard sale, a local market, purchases of very small amounts or private debts. Not be overlooked is the faith and confidence of actually holding currency in your hand. I don't think hard currency will ever be completely replaced by electronic currency.

 

I'm fascinated by debit card/ mobile wallet money system (yes I know it's not new.)There are several payment systems lately appearing here in the Boston area.

http://www.bizjournals.com/boston/print-edition/2012/10/12/punchey-takes-new-swipe-at-payment.html
http://www.paydiant.com/about/paydiant-background.html

 

Illegal or borderline transactions mainly. Not saying I like the possibility entirely, but many are thinking like the days of horse pulled carriages, steamship only world travel , and weeks or more to get messages to, lets say Poland. Once we have gone far enough ( and some say already) digital will replace current exchange. The digital age of financial transfer will happen within the next 30 years I am sure, although not expecting to have to fully participate due to age and bad judgment at times.. If the governments of he world can track money movements easily and fast, many illegal ( now or then) activities ( unless PM based) will be controlled much more easily. Yes, some innocents will still be entangled, but overall a much better system for exchange.

Yes, I know that gold and silver have been the basis of exchange for thousand of years, but there was nothing to compete with it. Now there is, digital resources. How many phones are there with operator controlled activity today in the US? How many digital devices do you use daily? Yes, some Luddites will say proudly "Not me!" just as some horse driven carriages will trundle down a rural road as the gas/electric/solar driverless cars drive down the modern autobahn. We will eventually trust the digital exchange products more than a piece of gold as the gold plated tungsten bars and coins will be much harder to detect than digital counterfeiting.

 

Interesting thought.

 

When: 2017 +/- 2 years

 

That seems pretty quick. What makes you think a conversion by then?

 

I'm convinced of the Dollar's collapse, and by 2018 or so.

Taxmaggedon might not happen, but things aren't looking up in 2013 either.
I look at the pension fund crisis that's hitting 2014-7, w/ huge market liquidations a-comin' : watch NJ, but the dominos will fall together.
Simultaneously, an exogenous event (like the Chinese hornets nest or roiling ME unrest w/Oil Crisis) triggers the collapse of the Biggest Bubble In History: US Treasury Bonds (c.2018.)
And basically, the Dollar as the World's Reserve Currency ends - with a double bang, not a whimper. So what would repatriation of 85% the US currency money supply look like, in our retail markets?

Awash in currency and drowning in red ink, the printing really starts after 2014... except it won't. We go straight to plastic at that point: no wheelbarrows this time. Things will also happen much faster than similar events in the early 20th C., maybe THAT (the Great Reset) won't be such a bad thing either.

In this scenario I suppose Gold goes parabolic c.2018-22.

 

American Open Currency Standard. It's an organization that sets standards on various PMs, like a certain size would equal a certain amount of spending power. More info at: http://www.opencurrency.com/

Similar to how the Liberty dollar worked.

 

Electronic currency won't happen by 2017. That side. Devil's Advocate - how will commerce work when the electricity goes out across almost an entire cities for several days due to weather such as what's happened twice this year in my city? Also, if everything went electronic and I no longer had dollar bills, where would I swipe my card at the strip club?

 

The other night, on C-Span, I heard the Deputy National Security Advisor tell an audience that BY FAR the biggest security threat to this country was professional hackers working for our enemies (and a friend or two).

Attacks number in the tens of thousands EVERY DAY. I won't get into the details, but they are out there, probing our utility services, electrical grid, pipe lines, fire and police, water and sewer systems, airports and air traffic control, etc., etc., not just military command and control.

Electronic currency would give them just one more system to take down (and one more way to snoop in your life). That's how you conquer a country without one bomb or bullet. I hope it never comes; PayPal's bad enough.

 

+1 doug.

 

People have been trying to replace hard cash for hundreds of years now, with very little effect. Checks were among the first means, followed by credit cards. However, the concept of credit is almost as old as the concept of cash. It's not going anywhere at any time. Even when we're cruising space and colonizing planets in other galaxies, there will still be hard cash. Digital is just another means to go along with all the others.
Guy

 

And you believe that works just one way? Anyway, cash accounts for roughly 5 to 10 percent of the transaction volume in the US, and EU figures are similar. Don't think that will go down to zero any time soon. My point is, we're not talking about "replacing" cash but about further reducing its share in the total volume or number of transactions ...

Christian

 

When I worked with a company that does significant work with the finance industry, I remember a project that investigated how to bring more customers into the banks. What the study revealed was that ~17% of the working adult population in the USA operates solely on a cash and carry basis and will not use any sort of card, check, etc to handle their finances.

Basically they will take their paper paycheck to a grocery store when they get paid, buy groceries and then take the rest of the check in cash from the grocer. Grocery stores are quite happy to perform this duty as it brings a reliable customer base into the store. Walmart, the largest retailer, has expanded this concept with their in store money centers. These people after cashing out their check, will then pay all their other bills through the week via cash and for that reason, almost every utility company in the USA has counter or drive up service for bill paying and where this isn't available, there are money orders.

So for this segment of society, cash will always be used until the government forces them out of it, and IMO, that isn't going to happen anytime soon.

 

I used to think that cash would be completely replaced by electronic means someday. However, given how fragile the power grid is in this country, we will always need some form of hard currency. TC

 

Both.

http://www.amazon.com/gp/aw/d/0307279987/ref=mp_s_a_1?pi=SL75&qid=1351774122&sr=8-1

My boss is still trying to get his direct deposit
tax return from last year when it "disappeared"
on the way to his account. There's as much reason to
fear hacked e-money as there is tungsten gold.