The cashless control grid may still be coming, but it is not going to replace cash anytime soon.
Though millions of people have started using digital devices to pay for goods and services, the appeal of physical cash is soaring, not fading away.
Outlook for currency production shows an astounding 5 per cent increase per year for the foreseeable future in the printing of bank notes for currencies across the globe.
That’s because, in pure and simple terms, people are demanding cash in times of crisis, and there is plenty of crisis ahead. Greece is the perfect example of what may be coming to your neck of the woods – perhaps even when you least expect it. According to FT:
One reason for the enduring appeal of cold, hard cash is the global economic downturn. Giesecke & Devrient expects banknote production to rise by 5 per cent a year for the “foreseeable future”, despite projections of double digit increases in the use of cards and other forms of electronic payments.
“Cash is 100 per cent reliable in times of crisis. It’s in periods of panic where a solid financial system has to prove itself,” said Ralf Wintergerst, a Giesecke & Devrient board member. “In a crisis situation, the demand for cash typically rises sharply. The reason for this is trust in real currency.”
The turmoil in Greece, which not only sparked speculation of a return to the drachma but also led to a surge in demand for cash, is a case in point.
The Financial Times reports that banknotes were also in high demand after the 2008 collapse began.
When, and if, that time comes, people are prepared to deal in physical money and barter/trade in useable goods and services. Digital currencies, while they offer incredible purchasing power inside a global market on the Internet, may be worthless in a crisis or disaster – particularly if the situation involves power outages or cut off access from online networks.
People do not want to be corralled into a situation of complete dependency on government assistance once a crisis or disaster hits. Physical cash, if it is stuffed under the mattress, or withdrawn before the banks close, can be used over the table, or under the table, to meet needs in a disaster.
Though the system of fiat currency itself is flawed, the physical notes, verifiable and holdable, are reassuring – perhaps deceivingly so.
The enduring appeal of banknotes is not just down to the financial crisis. More than half of payments in stable, advanced economies such as Germany’s are still made in cash, while globally the figure is about 80 per cent.
One of the reasons people flock to notes during financial panics and natural disasters lies in the way they look and feel. The desire to store your wealth in a physical object increases as the world around you becomes more uncertain… The difficulties in replicating their design and their status as legal tender create intrinsic value. (Source)
In extreme situations, however, where hyperinflation or currency instability is major – the currency, whether physical cash or digital currency can collapse leading to the kinds of scenarios seen in Weimer Republic or the more recent events in Zimbabwe or Argentina.
Gold and silver, along with other precious metals, also remain solid stores of wealth in times of great system disruption or complete currency failures. Though their prices are continually suppressed now, their true importance will become clear when they are perhaps most in need. Smaller denominations of value, such as offered by silver ounces, or small weights of gold, such as European sovereign coins, offer appropriate sizes for payments without the need to liquidate larger holdings in less than secure environments.Facebook and Twitter, and follow our friends at RepublicanLegion.com.