Volume 54, Number 9, September 2017
Cashing in THERE have been some very interesting stories in the press and on-line recently about the rise of electronic payments and the apparent demise of cash. It seems that in the western world at least the trend towards cashless payments shows no sign of abating and whether people are “quick paying” using electronic apps, using their ‘phones as wallets or simply using their cards more (contactless payments are certainly on the rise for small purchases), there is a definite swing away from good old fashioned money. Now, of course, these stories come up every so often and rarely a month goes by without some bright spark from the tech world predicting the ultimate death of coins and notes. There is, it seems, a war on cash being waged on two fronts—the first attack comes from the techies who seem hell bent on change for change’s sake and who want to find alternatives to cash just because they can; next comes the “official” line with carefully scripted press stories that refer to the black economy, cash-in-hand payments, etc., implying that all those who dare accept cash as payment are obviously doing so only to evade tax and therefore are the enemies of society and are the reason why we law abiding citizens pay as much as we do to the Government each year. Cash is depicted as grubby (how often do we hear stories of how many germs are on the average coin or how most £20 notes have traces of cocaine on them, etc.) and those who use it are frowned upon and seen as grubby themselves; only by using clean, fast (and traceable) card/electronic payments can they be redeemed. Such attacks on cash aren’t actually working—as whilst there is a definite trend towards card and electronic payments as a percentage of overall transactions, cash isn’t going away and in June the Bank of England reported that the number of notes in circulation rose by 10 per cent, the fastest pace for over ten years. This is bad news for their own Chief Economist Andy Haldane who, only two years ago, suggested the Bank eliminated cash completely in favour of a Government backed digital currency. At the time Mr Haldane’s comments didn’t garner much attention, but take them in conjunction with what has been happening across Europe (in particular Greece and Cyprus) and the relentless crusade in the press against cash and you might just want to probe a little further. When you do start looking more carefully at the “war on cash” you start to wonder just what’s going on and begin to ask if there’s something a little more sinister behind the stories. Lawyer, financial consultant and author James Rickards certainly thinks so and has written a number of books on what he sees as a systematic attack on cash and the “global elites’” plan for the next financial crisis which involves limiting the supply of money available—something they can only do if there isn’t this inconvenient thing called cash floating around that they can’t keep tabs on! Mr Rickards suggests that by eliminating cash then when (not if) there is another crisis, capital controls can be brought in to ensure that money is rationed to prevent the kind of panic we saw in 2008 where banks and other financial institutions had to be bailed out. Now this might seem a little over the top, this apocalyptic scenario where our own money is withheld from us at the whim of governments and bankers, but Mr Rickards does make a very persuasive case and, it has happened—think Greece 2015 when all the banks were closed for three weeks—what would we do if that happened here? What would Britain or America do if faced with such controls—how would we cope? Well, from our point of view, as coin collectors at least, Rickards’ solution to being held to ransom in such a way is very interesting indeed. You see Mr Rickards believes there is a way that we can avoid the problems of a “cashless society” and monetary controls instituted by government and that is to fall back on tried and trusted gold and silver! In his books precious metals, gold in particular, are seen as the only real way we can continue to trade in the event of another financial crisis, one where access to other money is strictly limited by “those in control”, whoever they may be. Now who has access to more gold and silver than anyone outside government? Why the coin world of course! Go to any coin show and it’s all over the place—admittedly some of it may (at least today) be worth far more numismatically than it is as a lump of precious metal but that’s by the by—if we are ever in a situation where the world truly has gone “to hell in a handcart” then at least we know we collectors will still be able to eat! So whilst we may feel that this seemingly constant attack on cash might have a detrimental effect on our hobby, fear not, the subsequent rush towards silver and gold will counteract any negativity! We geeks may still inherit the earth! All joking aside James Rickards does make some very interesting points and I do recommend his books, in particular The New Case for Gold—and maybe a purchase or two of the yellow metal from your favourite dealer next time you’re at a coin show, you know, just in case . . . sovereigns are always a good bet (especially as they are VAT and Capital Gains Tax free) and, of course, you can learn more about them in our new book, The Gold Sovereign, available now!
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