A recent program on ABC Radio National was entitled “Cash is for criminals: Why we should scrap big notes”.(1) The story behind this bizarre claim is the brainchild of Ken Rogoff, an economics professor at Harvard. This story is not “news”, but part of a world-wide war on cash. Never heard of the war on cash? It is not just about our monetary system. The war on cash is directed against you.
The move in Australia has been supported by a series of article in the Sydney Morning Herald quoting officials from Treasury. We also have a cashless welfare card and Citibank Australia has become the first Australian bank to go completely cashless, notifying customers that its branches will no longer handle notes and coins from November 24.(2)
Everywhere you look you see the same story: Cashless is good for you! All we hear is that eliminating cash will help fight crime and drug dealers, it is efficient and speedy, it is “trendy” and cash is “old fashioned” like horse and buggy transport. This is the Official Story.
WHAT EXACTLY IS A CASHLESS ECONOMY?
Those pushing the war on cash have the ultimate goal of a cashless economy. The fact that our everyday transactions are often made with plastic cards is not the same thing as an economy completely without cash. In a cashless economy our cash, both notes and coin, is completely replaced with emoney, money which only exists as a digital entry on a bank's computers. So far no country has reached this banker's nirvana. Some countries like Sweden are said to be almost cashless, in that cash is used in only 3% of transactions.
Sweden is not really cashless, however. There are about 80 billion Swedish crowns in existence, but between 40-60% of them do not circulate regularly in the economy.(3) This means that about half of them are being saved outside of the banking system. Those who don't like cash would say this cash has been "hoarded". Those who are rightly worried about the solvency of the world's banks might see it differently. Can we really believe that Sweden is going to declare this cash is not longer legal tender in the near future?
In fact India has just done something like this. The government has just announced that 500 and 1,000 Rupee notes are no longer legal tender, a move which has sparked large riots. This is easy to understand because it seems all people who now possess these notes have been told they are just worthless paper.(4)
Other countries like Australia and the UK are looking at going cashless, with little or no real discussion of what this might really mean. What is it we are not being told? When investigating a crime it is always best to start with the question: Who Benefits? The same applies in this case.
WHO REALLY BENEFITS FROM A CASHLESS ECONOMY?
The real winners in a cashless economy are the banks and our political leaders. How do the banks benefit? Remember bank transaction fees are extracted from retailers when we use our plastic cards and we must pay them ourselves. However when we give our local shop cash for milk and bread, the bank gets no fee from this financial transaction. We occasionally find some small shops that only take cash. This is actually wise for them, since they don't have to share their profits with a bank. In a cashless economy everyone would be forced to use the services of a bank. Anything anyone buys, anything anyone sells, any money we want to give to someone will be a transaction that goes through a bank as a transfer of emoney. Starting to see a reason why banks want a cashless economy?
How to politicians and governments benefit? Part of the Official Story is that it will make it tax collecting more efficient and catching criminals easier. This is rubbish! Big criminals don't use cash anyway, and the biggest tax evaders do so legally. What you are not told is that information about every financial transaction will be at their fingertips. The government will know every payment, sale or purchase made by any individual, club, union, or business. This is Orwellian Heaven! The last shred of our privacy will be ripped away. Our phones are tapped, our movements recorded, and any action which requires payment would be recorded. And the banks will have access to this information. They would be neglecting their duty to their shareholders if they did not sell this information as market research to the highest bidder.
BUT IT GETS WORSE! EVER HEAR OF FINANCIAL CENSORSHIP OR FINANCIAL BLOCKADE?
A completely cashless economy would not only give all financial information to banks and governments. It would also give them an undreamed of power over the citizens of any country. We have only seen a brief flash from the shiny blade of total control forged right before our eyes. What was this flash? Many have forgotten. PayPal and Master Card refused to process donations to WikiLeaks. It is legal in all countries to make such donations, yet this prohibition stands.
Governments are now exercising a new kind of power over us. It is de facto legal for banks working with governments to block digital transactions to or from any account. Such actions require no formal decisions and are subject to no oversight whatsoever. The WikiLeaks account was blocked following a suggestion by one US Senator.
This new power is just beginning to be used more widely in the US. It is called financial censorship, the power to stop money going into or out of any given account. What legal rights and guarantees protect WikiLeaks? We all have exactly that same level of protection: none!
This new de facto power should send a shiver a fear down your spine. In a cashless society any individual, organization, business or church could be summarily deprived of their emoney either accidentally or deliberately by a few simple keystrokes. Further, if that individual was found to be aided by others, they could also be deprived of their emoney as well. Such people would either starve to death or be forced to work for their food and accommodation like slaves.
FINANCIAL CENSORSHIP IS AT WORK NOW IN THE US
Financial censorship is the iron fist of the US Operation Choke Point. Like all roads leading to hell, it was paved with good intentions. Operation Choke Point was announced by the US Department of Justice in 2013. Its aim was to investigate banks, payment processors, payday lenders and other companies “believed to be at higher risk for fraud and money laundering”.(5)
While it might seem like a good idea, doubts began to appear when the list of “high risk activities” appeared on the Federal Deposit Insurance Corporation (FDIC) website. The list is given below. Needless to say it casts a rather wide net. It covers many legitimate business as well as obvious “scams”.
To see the way a financial blockade works in practice we need only look at what happened to Eden Alexander. Her full story is presented at the end of this article. She is a "porn star" who developed a serious infection. She was given Zoloft to deal with a traumatic event in her life, but she soon developed blisters and a rash. Doctors eventually realized she had the skin disease Stevens Johnson syndrome, caused by an allergy to the Zoloft, but by that time her condition had been left untreated for so long, she got a staph infection on top of the blistering. Eventually there was so much infection that it triggered the most severe form of hypothyroidism called myxedema coma, and she ended up in the ER with her nervous system shutting down.
Her illness prevented her from working, so she began crowd funding on the Internet so friends could support her. However she discovered that their donations were bouncing back, not going into the account. She discovered her fundraising event - for her medical expenses - was blocked because someone realized she worked in the porn industry, which is very legal and actually a very big business in the US. Notice that pornography is one of the "high risk" businesses listed on the FDIC website. And do they block the purchase of porn with emoney? Clearly hypocrisy is alive and well, but closing down her crowd funding account and removing accumulated money from her personal account is legal. Furthermore there is no legal redress for the action of the service providers who decided the relevant transactions should be stopped.(6)
The war on cash and the push to a cashless financial system is the latest and most ominous part of the move to take away all of our privacy and freedom.With this kind of total control we would have no choice but to submit to any policy or any action by giant corporations and their puppet political leaders. Removing cash and replacing it with emoney might seem a harmless or even useful improvement in our lives. However we must realize that by this simple change our lives would be transformed into a nightmare of complete and arbitrary control. What would democracy, freedom of speech, common law or lawyers mean in such a system? At one stroke all the legal and conventional protections people have will be removed.
How will this war on cash develop in Australia? It is likely that banks, with the help of governments, will just make it harder and more inconvenient to use cash, as Citibank has already done. They will no longer accept cash deposits. Next they will start to remove cash machines so it is harder to get our hands on cash. Removing large denomination notes like $100 and $50 bills is a way to force anyone buying or selling expensive items to use emoney. Would we buy a used car with a large wad of $20 notes?
WHAT CAN WE DO?
We cannot expect any political parties to raise the alarm about the deadly trap hidden within the move to a cashless financial system. Those in power will benefit by having the tools to remain in power forever, and any politician foolish enough to publicly oppose it will suddenly find themselves at the business end of corporate power.
The only way to oppose this Orwellian nightmare is through people power, united action from all those who will have their financial freedom and privacy taken away by this system of total control. Below is a short list of those who are threatened or harmed by this system.
All these people must get together and demand that the government keep our cash. People should also start to use more cash themselves: use it or lose it!
The bankless: people without a bank account about 17% of Australians
Careful savers: can't keep cash under the bed for a rainy day
Political activists or organizations of any stripe: people or organizations opposed to refugee treatment, fracking, nuclear waste storage, coal mines, reef destruction, roadbuilding or other construction/destruction plans...
Unions: how could this system be used to stop a strike or a union campaign?
Small business: all forced to deal with banks and bank fees
Community fundraisers: you can only sell a snag with onions if you have the appropriate equipment
Local and village markets: any trader must have appropriate equipment
The elderly: all must have and use computer or smartphone
Rural businesses: all must have latest technology
Aboriginies living outside cities and towns: must have computers or smartphones and be connected to the internet
Natural disasters: in SA when electricity was cut off some areas had no cash for days; with a cashless financial system such disasters would only be made worse
HOW EDEN ALEXANDER FELT THE FORCE OF CHOKE POINT
The way this new power almost destroyed one woman's life shows just how dangerous financial censorship is. This story is from the Atlantic:
“Eden Alexander fell ill in the spring of 2014. It started when she suffered a severe allergic reaction to a prescribed medication. Then by her account, when she sought medical attention, the care providers declined to treat her, assuming that the problem was illegal drug use.
“Alexander is a porn actress. According to her, she was profiled and discriminated against, and failed to receive due medical care. In the end, she developed a staph infection. She couldn’t work, and she struggled to take care of herself, let alone her medical bills, her apartment, her rent, her dogs.
“Her friends and supporters—many of whom were also in the adult entertainment industry—started a crowdfunding campaign on the GiveForward platform, hoping to cover her medical expenses. She had raised over a thousand dollars when the campaign was shut down and the payments were frozen.
“GiveForward said that her campaign had violated the terms of service of their payment processor, WePay: 'WePay’s terms state that you will not accept payments or use the Service in connection with pornographic items.'
“A few hours after Alexander received the notice via email, and posted about it on Twitter, she had to be taken to the hospital in an ambulance. (...)
“The suspension of payments to Eden Alexander frustrated her well-wishers and supporters. How could it be so difficult to send Alexander a small amount of money? We live in a world of abundant crowdfunding platforms, and every year brings a fresh crop of money transfer smartphone apps. In the cashless society, payments are supposed to flow more freely and easily than ever.
“The choke points are private corporations that are not only subject to government regulation on the books, but have shown a disturbing willingness to bend to extralegal requests—whether it is enforcing financial blockades against the controversial whistleblowing organization WikiLeaks or the website Backpage, which hosts classified ads by sex workers, and allegedly ads from sex traffickers as well. A little bit of pressure, and the whole financial system closes off to the government’s latest pariah. Operation Choke Point exploited this tendency on a wide scale.
“Alexander’s ordeal was made possible by our march towards the seemingly inevitable cashless society. Where electronic payments reign supreme, the choke points become more important than ever. Cash has not always been with us—indeed, credit systems predate the use of gold and silver as money. But it is fair to say that we are seeing an unprecedented future in which the totality of financial activity is captured within the same informational system, one that can be both monitored and influenced by a powerful and sprawling administrative state.”
Notice that her friends could not donate emoney to her as a “banned person”. In this case, the crowdfunding platform was blocked by the payment processor. In a more vindictive attack, the friends themselves could have had their accounts frozen because they tried to pass emoney to her. In a system in which all tranactions must take the form of emoney, even the people who actually give anything – even goods etc. - could have themselves also cut off from any payments as punishment for trying to circumvent the restrictions on the “banned person”.(7)
3. https://www.corbettreport.com/the-war-on-cash-a-country-by-country-guide/ andhttp://www.gold-eagle.com/article/cashless-society-%E2%80%93-risks-posed-war-cash