Monday, March 25, 2019

Cashless, by JD

Following the post about the prospect of a cashless society
and the observation that cash in bank notes is not real money, our blog host sent me this link which highlights 'the risks of a cashless society' -

An interesting post and  there were two things he wrote in there which are worth further comment:

(1) "They [the Government] firmly believe if everyone paid their taxes, they would have no problem. Of course, that is a fantasy. Whatever they collect will NEVER be enough to sustain their power."

I remember two years ago Narendra Modi decided to outlaw large denomination notes because 'they were used by tax dodgers' and later I read somewhere that his 'experiment' had been a disaster because it turned out that there was very little in the way of 'black money' circulating but more importantly many businesses collapsed and unemployment went up. Plus it cost the Government in that it resulted in lower tax revenues. Can't recall where I read that but I have found this Wiki page with a summary of events -
Further down the Wiki page it has these reactions from a few real experts -
"Steve Forbes described the move as 'Sickening And Immoral'. He stated that "What India has done is commit a massive theft of people's property without even the pretense of due process--a shocking move for a democratically elected government." Nobel laureate Paul Krugman said that it is difficult to see gains from demonetisation, while there may be significant costs to it. Economic analyst Vivek Kaul stated in a BBC article that "demonetisation had been a failure of epic proportions.""

(2): "In Europe, there is already the tradition of canceling their currency. This is done to prevent people from hoarding cash and not paying taxes."

Long time ago it occurred to me that changing the design of banknotes was a subtle way of preventing people from keeping cash under the mattress. The last time the twenties were changed I had to go to the bank because my mother had rather a lot of notes neatly stuffed into envelopes. She had spent her whole life budgeting for the household and being thrifty. Saving up for what she and the family needed. Everyone did the same in the old days. The only outside savings she accumulated were the 'divi' on her Co-op shopping in an account there, all recorded in her 'Pass Book'. When I went to the bank with the envelopes full of cash I just said "Don't ask!" but they understood because they had mothers like that too and knowing the people who worked there helped also. How things have changed and not for the better. I still keep a wary eye on the papers for the first hint of any redesign of the currency.

Over the years I have learned the hard way that financial institutions are, like governments, not your friend! I know now that my small private pension was pointless with the returns being a lot less than promised and we all know what successive Governments have done to our pension funds.
I also know that the insurance and surety companies will do anything to avoid paying out money. Do you know the difference between a bookmaker and an insurance company? The bookie will pay you without any argument over the sum he owes you!

In the eighties virtually all mortgages were linked in some way to endowments or other 'investment for growth' vehicle. I was looking to buy a property in 1987 but could not find a normal straightforward repayment mortgage. They were very rare beasts indeed so I abandoned the idea of buying at that time. It was quite obvious to even my limited understanding of finance that the projected growth of these funds was highly unlikely to happen and so it proved.

So where to place any savings to keep it safe from all the 'sticky fingers' of government agencies and other financial  wizards with their promises of unlimited milk and honey flowing from their 'safe' investments?

Not a new problem as I see from this randomly generated blog post which appeared in the right hand sidebar of this blog today.


Yesterday I saw the end of one of those RT documentaries and it was Noam Chomsky saying 'money is a form of speech' quoting a legal judgment, Buckley v Valeo 1976. That pricked up my ears so I looked for it and found this -

Truly, "the Law is a ass" as Dickens observed. Legal opinion is based on the extreme logical definition of the words in the legal text with judgments handed down which defy common sense. Remember Bill Clinton defending himself during the Lewinsky affair "... it depends on what the definition of 'is' is."

Humpty Dumpty is the patron saint of Lawyers everywhere -

 “When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’
’The question is,’ said Alice, ‘whether you can make words mean so many different things.’
’The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all.”

― Lewis Carroll, Through the Looking Glass

I think we have inhabited a looking glass world for a long long time!

1 comment:

wiggiatlarge said...

And just to confirm the drive towards a cashless society it was announced that the fabulous new Spurs Stadium will be the first to be totally cashless, little by little...............