What is the point of the plans to abolish cash?

by Prof Dr Eberhard Hamer, SME Institute Hannover

Formerly the concept of “money” was understood to mean only coins or later notes, which people held in their hands. But meanwhile this kind of cash money amounts only to a few percent of the total money supply. The bulk of what we call money is made up of account balances, account receivables or account payables. This latter “book money” dominates the entire international financial and banking system and is chased around the world billions of times within seconds by a simple click on a computer without anyone noticing. It merely appears as a debit or credit entry in an account.
For the banks deposit money is cheaper than cash. The latter needs to be sorted, counted, transported and secured. Therefore cash causes higher costs for banking system and trade than deposit money does.
Therefore banks and retail have already been promoting the credit card system, which reduces the payment process to a simple electronic direct debit, which is cheaper and makes cash dispensable. Now the suggestion to abolish cash altogether and to begin this process with the 500-Euro note comes up more and more frequently. There are powerful interested parties behind this proposal:
Banks could abolish all their cash machines, their cash departments and cash security, so that they would save substantial costs.
Trade and services would also save money by the prohibition of cash. They would no longer have to count or exchange cash or ensure its transport safety.
Industry and manufacturing have also shifted to using mainly money transfers (book money) because of the hard VAT control conditions.
Central banks as “printers” of money would save entire departments and substantial cost if there were no more cash but only book money.
Yet above all the tax state wants only book money because this would allow tax offices to scrutinize every account of every citizen, every bank and every company, which they cannot do now with savings in cash.
About 70% of the population oppose the abolition of cash because they are used to cash and see this as a freedom category for their revenue and expenditure.
Cash abolition would also cause problems for many of the 42% small enterprises and individual craftsmen because minor services (eg the changing of a switch) would no longer be worthwhile for them if they had to be paid into their bank accounts, and private services (tutoring, singing lessons, babysitting and other) would have to become much more expensive (because of taxes) and would therefore often be no longer worthwhile for suppliers and demanders.
However, the aforementioned objective reasons for or against cash are not the real reasons why central banks and states want to abolish cash – there is a more insidious reason: the all-round control of all payment transactions and the fraudulent preparation of a monetary correction, a currency reform.
In the same way as earlier princes increased the number of gold and silver coins in their mints by the addition of low-grade metal (tilting and rocking), central banks have increased the money supply fifty-fold in recent decades (while real growth only quintupled) and thus generated a huge money bubble, which threatened to burst on several occasions (US subprime crisis, euro crisis), but has been kept afloat by more money flooding.
They have also artificially eliminated the inflation which according to theory inevitably follows money flooding. They achieved this by means of the zero interest rate, and so the devaluation of money caused by the money flood could not yet been detected. The flooded money has served primarily unsound banks to incur debts for their speculation and unsound states to indebt themselves for luxury benefits. So the flood of money was followed by a flood of borrowing and debts where everyone reliable is held responsible for and where central banks make payments without restraint to everyone irresponsible.
This game will not much longer go well. The exchanges and markets are already “volatile”. The looming recession would enforce a monetary correction – if the states or their central banks do not withdraw the excess liquidity from the market by means of a currency reform.
This planned currency reform will be considerably cheaper if the central banks no longer have to withdraw old cash and introduce new cash. After the abolition of all cash it will take them only minutes to click on a button of the digital money system, enter the depreciation and so to implement it everywhere.
In this regard cash abolition is the preparation for monetary correction.
However, if cash were to be abolished, the fraudulent background of this measure would become evident to large sections of the population and therefore immediately bring about a critical loss of confidence in the currency (eg Euro). Anyone who was smart would immediately get out of the book currency, change his assets back to traditional currencies like gold and silver and hoard them like that. We have already had this in Hitler’s time: If the currency collapsed, gold and silver would remain secure means of payment. And contrary to the prohibition of cash, a ban on gold and silver money has never worked anywhere in the world. The only effect of the cash ban in any country would be an even earlier loss of credibility of the central bank and the collapse of its monetary system.
And the state’s and press’ justification of the cash ban as being part of the “fight against crime” is not more credible than the US wars of conquest fought under the pretence of “counter-terrorism”.
Yet the experiment with a cashless society has a chance nevertheless because all banks have – in their own interest (costs) – already been trying to wean their customers off the handling of cash by means of fees and negative interest rates. But of course this is not the only ongoing action of patronization and deprivation of liberty as well as the asset control of citizens. •