If you follow college football on ESPN you are familiar with Lee Corso uttering the phrase "not so fast my friend" when arguing with his pals on Game Day about predictions for the games. Perhaps we can apply that phrase to those who seem sure that we are headed towards a "cashless" society. While the trend towards digital forms of money will certainly continue, cash is by no means near extinction as we can see from this article on Marketupdate. This article focuses on Euros but there are still plenty of cash US dollars out there as well. Below are some quotes.
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"Each year we use less cash in daily transactions, but at the same time the amount of banknotes in circulation inside the Eurozone is increasing at a rapid rate. Last year, the total value of all banknotes in circulation reached €1,08 trillion, an increase of 6,5% compared to the year before. The total value of all banknotes in circulation in fact doubled in ten years, an increase that could only partially be explained by inflation and the entrance of new member states to the Eurozone.
What explains the increasing demand for banknotes? It could be the result of a growing black market economy, in which goods and services are paid for in cash and cannot be traced afterwards. But in recent years, distrust towards banks and the extremely low interest rate could also explain the flight to cash. Persistent rumors of a possible tax on savings, the new ‘bail-in’ scheme for European banks and the fact that you earn almost no interest on bank deposits make it more attractive to keep savings in the form of cash. We can also imagine people wanting to get out of the financial system by holding cash and buying gold." . . . . . . . .
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My added comments: A couple of points. First, we have encouraged everyone who can to build up an emergency fund as a way to prepare for an uncertain future. It looks people in Europe agree as they are clearly piling up some cash savings. How do we know? Look at the graph in the linked article that shows the upward explosion in 500 Euro denomination notes. Those cash notes cannot be used at retail outlets for the most part, so people are holding them in savings.
Secondly, one of the experts we have contact with here pointed out to me last summer that cash is actually increasing in both England and Europe when I asked about all the furor over society going "cashless". He also told me that despite hype you see in media, there is no global movement within the system to eliminate cash entirely even though some nations are virtually cashless already. In fact, I am told the overwhelming consensus is that cash will continue to play an important role far into the future in most countries despite the trends towards more and more use of digital/electronic forms of money.
I have also gotten no indication of any kind that there is any desire to confiscate precious metals. It would be almost pointless in the west where such a tiny % of the population owns any significant amount of precious metals. Many Eastern nations actually encourage their citizens to own precious metals.
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