Re Brick & Mortar Store Goes Cashless

["Dave Farber" <dave () farber net>]

Interesting


---------- Forwarded message ---------
From: John Gilmore <gnu () toad com>
Date: Fri, Feb 3, 2017 at 7:27 PM
Subject: Re: [IP] Re Brick & Mortar Store Goes Cashless
To: <dave () farber net>
Cc: ip <ip () listbox com>


Rogoff claims that in the US:
> ...the vast bulk of physical currency is held in the underground
> economy, fueling tax evasion and crime of all sorts.

The vast bulk of physical currency is held overseas, which the US
government heartily approves of.  For a few pennies they print up a
piece of paper that says "$100", and people from the rest of the world
give them $100 worth of goods and services for it.  It's a free loan
to the US government.  And if that piece of paper is used worldwide by
a variety of people to pay each other for things, and never comes back
to the US, then the US government NEVER has to redeem it, so the $100
was a free GIFT to the US government.  The US government has
deliberately quadrupled its printing of $100 bills in order to benefit
itself more from this gift -- see:


https://www.armstrongeconomics.com/uncategorized/the-money-plane-republic-national-bank-russia/

The USG gains $6 or $7 billion dollars a year from this, according to
E. L. Feige.  It's called "seignioriage":

  https://en.wikipedia.org/wiki/Seigniorage#Overseas_circulation

> Moreover, most
> of this cash is held in the form of large denomination notes such as
> the US $100 that are increasingly unimportant in legal,
> tax-compliant transactions. Ninety-five percent of Americans never
> hold $100s, yet for every man, woman and child there are 34 of
> them.

See the above links about the $100 bills.

The only reason 95% of Americans never hold $100s is because you can't
get them from an ATM.  I have been using $100 bills at businesses for
decades without trouble, so it isn't that people avoid them because
they are too troublesome to spend.  And the only reason that there are
no more $500, $1000, $5000, and $10000 bills in the US is because the
government decided that it doesn't want its citizens to be able to do
significant financial transactions without creating metadata.  That's
because, in circumvention of the Fourth and Fifth Amendments, it has
mandated that every financial institution open up all the metadata
that they have about their customers to any cop at any level who wants
to look at them.  It's all about mass surveillance, and cash reduces
opportunities for mass surveillance.

$100 bills are readily available in any bank.  But a catch is that if
you get out more than 100 of them at a time, or if the bank has any
nebulous reason to suspect you of anything, then the bank is required
to create even more intrusive metadata and directly report it to the
Federal government without them even asking.  Then the Treasury Dept
and DEA troll through this "big data" about your finances, doing
fishing expeditions in honest peoples' financial history.  There is
plenty of documentation of how this system is skewed to produce
lawless authoritarian injustices; see for example:

  http://ij.org/issues/private-property/
  http://ij.org/case/iowa-forfeiture/
  http://ij.org/client/randy-sowers/
  http://ij.org/client/ken-quran/
  http://ij.org/client/terry-dehko-and-sandy-thomas/
  http://ij.org/case/miforf/
  http://ij.org/case/connecticut-forfeiture/
  http://ij.org/case/long-island-forfeiture/
  http://ij.org/case/san-diego-civil-forfeiture/

http://ij.org/ij-fbi-civil-forfeiture-violation-property-rights-not-tool-law-enforcement/
  http://www.washingtonpost.com/sf/investigative/2014/09/06/stop-and-seize/
  http://ij.org/case/philadelphia-forfeiture/

http://ij.org/press-release/state-federal-governments-must-improve-forfeiture-transparency/

From Fiscal Years 2002 through 2014, the City of Philadelphia seized
and forfeited $50,440,292 in cash from tens of thousands of citizens,
the vast majority of whom were never charged with a crime, let alone
convicted of a crime.  See:

  http://ij.org/wp-content/uploads/2014/08/Amended.Complaint.pdf

> Paper currency is also a key driver of illegal immigration and
> corruption.

As the above nest of links shows, there is a lot of corruption, mostly
inside official government law-enforcement agencies.  But paper
currency wasn't the driver -- they are seizing bank accounts, cars,
houses, and commercial properties as well as currency.  Raw greed,
unchecked power, and impunity for government employees is the real
driver.

Paper currency is also a key driver of legal migration.  It's much
simpler to pay in cash when you have moved to a place where nobody
knows you, you don't have a home address yet, you don't have a local
bank account or a job yet, you barely speak the language, your assets
are in properties or accounts that aren't liquid in the location you
have moved to, etc.  But it's popular to bash "immigrants" these days,
though of course every "immigrant" is also an "emigrant" and a
"migrant".  And the United States benefits greatly from all the
migrants that come here -- legally and illegally.  Without them, our
population would be shrinking, our crops untended, our universities
only half filled with outstanding students, and our businesses lacking
energetic and inspired leaders.  (But I'm prejudiced -- I've worked in
so many successful businesses founded by migrants, like Sun
Microsystems where two of the founders were a German and an Indian;
Cygnus Support where one founder was Australian.)

Paper currency is also a key driver of freedom.  But what government
(and what Harvard economist Professor of Public Policy) is a fan of
freedom?  Stamping out other peoples' activities that they disagree
with is far more important to these people than abstract philosophical
concepts like "freedom".

        John



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