The Foolishness of Eliminating Cash

By Kaspars Grinvalds @Adobe Stock

How to Avoid a Cashless Society

Even if paying only a modicum of attention, you know the use of cash has significantly declined. The government seems all aboard with that. For now, however, a cashless society is not a mandate.

From the Federal Reserve:

Data shows that the percentage of transactions involving cash declined from about 35% in 2015 to only 16% in 2024.

Two countries at the top of the list are Sweden and So Korea, each of which is about 10%.

Let’s not go there, argues Sweden, as it recognizes the folly of eliminating cash. Francis Menton cites articles from, first, The Banker, then The Guardian:

• Sweden is backpedalling on its decades-long push to go cashless. The [reasons are the] threat of war, coupled with concerns about “signals” from the US under President Donald Trump….

From the Guardian: 

[I]n the context of today, with war in Europe, unpredictability in the US and the fear of Russian hybrid attacks almost a part of daily life in Sweden, life without cash is not proving the utopia that perhaps it once promised to be. 

Such is the perceived severity of the situation that the authorities are trying to encourage citizens to keep and use cash in the name of civil defence. In November, the defence ministry sent every home a brochure entitled If Crisis or War Comes, advising people to use cash regularly and keep a minimum of a week’s supply in various denominations to “strengthen preparedness”.

War or Civil Defense? 

Mr. Menton, in Manhattan Contrarian, explains what the two countries are thinking:

… a fully electrified payments system is subject to what is called a “single point of failure.”

No juice? Until the electricity returns, no withdrawals. How long? Who Knows? Maybe an hour. Maybe a month? Without cash, warns Mr. Menton, there is no backup.

What Could Eliminate Electricity? 

• How about if Sweden were attacked by Russia? War for one.

• There is always hacking, as a prank or an ambush.

• Spain and Portugal recently illuminated what happens with grid instability. Those countries, Francis Menton notes, did get their grids back up within about a day; but “increasing penetration of wind and solar generation on grids in major countries significantly raises the likely frequency of such outages, and the challenges of recovering from them.”

• Surveillance. Menton admits to being “amazed” at this “surveillance” (which can be avoided every time you use cash).” After all, he quips, the authorities would never misuse this information, would they?

Under the USA PATRIOT Act, passed in the aftermath of the 11 September 2001 attacks, general surveillance by the authorities of all banking and credit/debit card transactions takes place. Just look at the “debanking” industry’s misuse of info gained from transaction monitoring during the Biden years. A 2024 piece from the Telegraph provides details and lists prominent victims:

From the Telegraph: 

The alleged debanking of crypto entrepreneurs comes amid a years-long crackdown on digital currency business and their billionaire founders. Under the Biden administration, US regulators have unleashed a series of civil and criminal lawsuits against cryptocurrency exchanges. Those prosecuting such cases claim they are simply enforcing regulation or crackdown on wrongdoing. Yet critics claim it is part of a broader effort to target political opponents. [Mark] Andreessen claimed that it is not only businesses that have been impacted, but “just generally political opponents”.

No surprise that Donald, Melania and Barron Trump topped the list. How about Nigel Farage, the likely next Prime Minister of the UK? And how about large number of prominent figures in the world of cryptocurrencies?

The Biden administration deemed the whole crypto thing to be sketchy.

… besides, a lot of those crypto guys might be Republicans. Aren’t those reasons enough to banish the industry from the banking system?

From Congresswoman Anna Paulina Luna (FL), introducing her bill: 

“For over two decades, rogue actors within our U.S. intelligence agencies have used the Patriot Act to create the most sophisticated, unaccountable surveillance apparatus in the Western world,” said Congresswoman Luna. 

Congressman Luna’s bill would strip the deep state of these tools and protect every American’s 4th amendment right against unreasonable searches and seizures. “It’s past time to rein in our intelligence agencies and restore the right to privacy. Anyone trying to convince you otherwise is using ‘security’ as an excuse to erode your freedom.”

Congressman Luna’s bill is a small sign of resistance against the pervasive surveillance state. Yes, it’s disappointing that the bill isn’t expected to pass soon. Still, even small signs of resistance are encouraging.

Meanwhile, Francis Menton advises everyone to push back. Use cash whenever possible.