His primary merits for the removal of hard currency apparently targets the markets for undeclared work, those earning a little cash in hand and wanting to avoid declaring this and being taxed. And allegedly Bofingers proposals would dry out the drugs market. This is assuming that people trading in illicit markets would simply not choose something else to use for barter.
A couple of dangerous assumptions from Bofinger that seems to be present in those declaring a cashless society is the belief that the banking sector has fully penetrated the human world. Meaning that nothing would be possible without a bank account, mortgages, getting a job, paying staff, starting a business, etc.
Another missing ingredient that proponents of exclusive banking cashless societies seem to ignore happily is the international trade. Already international trade is mostly exclusive to those who have suitable bank accounts that allow them to trade and exchange various currencies.
Admittedly there are likely people who conduct international trade with hard currency, however with border controls it can be quite tricky to do any sizable trade, unless of course it is illicit trade.
Already in our ‘global’ society there are swathes of people who face exclusion from the trading markets by being excluded from banks. Many local traders in small countries continue to trade via hard their local hard currency. These individuals and businesses would be faced with acquiring a bank account (and their relative fees), if they can not get a bank account for whatever reason, then tough luck.
Not only would a pure banking society create an exclusive internal economy and exclude themselves in parts from the international market, it would also make it far easier for central banks to enforce their monetary policy.
Print more money to solve the problem of printing too much money seems to be the chant of the contemporary day. But let us not forget the other plays being made alongside this push for a cashless society, that of negative interest rates.
Also Read: Denmark Central Bank to Stop Printing Money: Shops Can Refuse to Accept Notes and Coins
Calling on the Federal (Germany) government to promote cashless societies at the international level, Bofinger echoes the US and recently Denmark. Are the chances of achieving a cashless society, or rather, a purely bankers controlled society, have the possibility of becoming a reality? If they can push TTIP through, then probably yes.
Governments would become even more under control from banks and if you think you’ve seen inflation now, just waiting until they have everything in their grasp.
Thankfully there is an escape route.
Last modified: May 21, 2020 11:18 AM UTC