Bitcoins are energy waste

SUBHEAD: Bitcoin mining industry is now using enough electricity to power 2.26 million American homes.

By Tyler Durden on 5 November 2017 for Zero Hedge -
(http://www.zerohedge.com/news/2017-11-04/each-bitcoin-transaction-uses-much-energy-your-house-week)


Image above: Illustration of Bitcoin's impact on the power grid. From (https://news.bitcoin.com/bitcoin-mining-power-growing-bigger-but-greener/).

[Note from IB Publisher: Each Bitcoin transaction costs as much running the average American home for a week. That is a lot to burn for a Statbuck's coffee and a scone.]

While Bitcoin bulls will probably never have it so good as they have in 2017, we wonder whether many of them have stopped to think about the environmental downside of this roaring bull market.

After all, back in the dot.com boom, people had ideas about potential internet businesses, issued pieces of paper representing ownership and watched their prices go parabolic parabolic.

All it took was a Powerpoint presentation, some computer programming expertise and a “research” report, courtesy of Mary Meeker, Henry Blodgett et al.

The environmental downside we’re referring to in Bitcoin is, of course, is energy.

We alluded to this in a constructive way here when we noted that a new Bitcoin mining hub is developing in Iceland, where the natural temperature dramatically reduces the cost of cooling computing hardware.

The primary energy requirement, however, goes into the computing power to “mine” the Bitcoins. The Bitcoin mining industry can consume 24 terawatt hours of electricity and still be profitable – the Motherboard website provides some context...

Bitcoin's incredible price run to break over $7,000 this year has sent its overall electricity consumption soaring, as people worldwide bring more energy-hungry computers online to mine the digital currency.

An index from cryptocurrency analyst Alex de Vries, aka Digiconomist, estimates that with prices the way they are now, it would be profitable for Bitcoin miners to burn through over 24 terawatt-hours of electricity annually as they compete to solve increasingly difficult cryptographic puzzles to "mine" more Bitcoins.

That's about as much as Nigeria, a country of 186 million people, uses in a year… De Vries also estimates that the worldwide Bitcoin mining industry is now using enough electricity to power 2.26 million American homes.

A rapid “Google” later and we discovered that there are 125.8 million American households, so almost 2%.

Another way of looking at Bitcoin’s energy consumption is divide the electricity use in Bitcoin mining each day by the number of daily Bitcoin transactions. As the Motherboard notes, each Bitcoin transaction now requires the same amount of electricity needed to power the average American household for one week.

Expressing Bitcoin's energy use on a per-transaction basis is a useful abstraction. Bitcoin uses x energy in total, and this energy verifies/secures roughly 300k transactions per day. So this measure shows the value we get for all that electricity, since the verified transaction (and our confidence in it) is ultimately the end product…

This averages out to a shocking 215 kilowatt-hours (KWh) of juice used by miners for each Bitcoin transaction (there are currently about 300,000 transactions per day).

Since the average American household consumes 901 KWh per month, each Bitcoin transfer represents enough energy to run a comfortable house, and everything in it, for nearly a week.

Since 2015, Bitcoin's electricity consumption has been very high compared to conventional digital payment methods. This is because the dollar price of Bitcoin is directly proportional to the amount of electricity that can profitably be used to mine it.

Unfortunately for the environmentalists, the Bitcoin price – as every bull knows – entered the parabolic phase in 2017. This Bloomberg chart calculates the number of days for each $1,000 rise in price.

While Motherboard states that De Vries model isn’t perfect and “makes assumptions about the economic incentives available to miners at a given price level”, the website makes the point that there is clearly a “problem”. According to Motherboard...

That problem is carbon emissions. De Vries has come up with some estimates by diving into data made available on a coal-powered Bitcoin mine in Mongolia.

He concluded that this single mine is responsible for 8,000 to 13,000 kg CO2 emissions per Bitcoin it mines, and 24,000 - 40,000 kg of CO2 per hour. As Twitter user Matthias Bartosik noted in some similar estimates, the average European car emits 0.1181 kg of CO2 per kilometer driven.

So for every hour the Mongolian Bitcoin mine operates, it's responsible for (at least) the CO2 equivalent of over 203,000 car kilometers traveled.

However, you’ve probably been thinking what we’ve been thinking. While the price is going parabolic now, Bitcoin usage might go parabolic in the future, problem solved. While it might help, De Vries pointed out the structural flaw...

As goes the Bitcoin price, so goes its electricity consumption, and therefore its overall carbon emissions. I asked de Vries whether it was possible for Bitcoin to scale its way out of this problem.

"Blockchain is inefficient tech by design, as we create trust by building a system based on distrust. If you only trust yourself and a set of rules (the software), then you have to validate everything that happens against these rules yourself. That is the life of a blockchain node," he said via direct message.

Motherboard reflects on the cost of Bitcoin’s environmental footprint versus the benefits of a decentralized payment system which avoids the “Too Big To Fails” and their smaller brethren.

This gets to the heart of Bitcoin's core innovation, and also its core compromise. In order to achieve a functional, trustworthy decentralized payment system, Bitcoin imposes some very costly inefficiencies on participants, for example voracious electricity consumption and low transaction capacity.

Proposed improvements, like SegWit2x, do promise to increase the number of transactions Bitcoin can handle by at least double, and decrease network congestion.

But since Bitcoin is thousands of times less efficient per transaction than a credit card network, it will need to get thousands of times better.

In the context of climate change, raging wildfires, and record-breaking hurricanes, it's worth asking ourselves hard questions about Bitcoin's environmental footprint, and what we want to use it for.

Do most transactions actually need to bypass trusted third parties like banks and credit card companies, which can operate much more efficiently than Bitcoin's decentralized network?

Imperfect as these financial institutions are, for most of us, the answer is very likely no.

It’s certainly food for thought, even for die-hard libertarians, like ourselves. Then again, perhaps less so for libertarians who’ve been loaded up with Bitcoins in the past few weeks. They would likely be more interested in the bull, bear and neutral cases for Bitcoin in the Bloomberg article linked above. Here is the summary.

With the rhetoric for and against heating up this week amid bitcoin’s barrelling gains, here’s a look at where some big names in finance stand -- from those who see it as the natural evolution of money, to the naysayers waiting for the asset to crash and burn.

Bitcoin’s Backers

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The Amazon Problem

SUBHEAD: There is only one force that can stop Amazon from running all American retail commerce.

By Matt Stoller on 17 June 2017 for Huffington Post -
(http://www.huffingtonpost.com/entry/americas-amazon-problem_us_59443b5be4b06bb7d2731cba)


Image above: Exterior of AmazonGO store at the BETA participant entrance. From original article.

To understand the depth and breadth of Jeff Bezos’ ambitions for the company he built, type www.relentless.com into your browser. The domain Bezos registered in 1994 will redirect to Amazon, the company aptly, and ambitiously, nicknamed The Everything Store.n>

He tells his shareholders that the company will act like an aggressive startup — that at Amazon, it is always Day One.

Like Google and Facebook, Amazon uses technology and data to sidestep traditional restrictions on monopoly power.

Our lives are increasingly organized by the platforms these companies run, platforms which now mediate the way we communicate and engage in commerce with each other.

We are living in a world organized by tech monopolists, a change in power relationships that no one voted for but has been imposed upon us nonetheless.

Now, Bezos is attempting to add more power to his empire with the surprise announcement that the company will pay $13.7 billion for Whole Foods Market. Amazon will now have a store footprint in neighborhoods across America.

Our communities and the way we engage in commerce will change. Imagine walking into a Whole Foods store and seeing different prices depending on whether you are a member of Amazon Prime — or seeing different prices depending on any other way that you interact with Amazon.

This isn’t implausible. It is what the company does when it opens up stores. For instance, Amazon is creating a chain of physical book stores to take the place of the book stores the company destroyed.

In these stores, there are no price tags at all: You scan the items with your phone and have a price delivered to you, personalized by Amazon.

Why wouldn’t Amazon extend this to Whole Foods? “Our goal with Amazon Prime, make no mistake,” says Amazon CEO Jeff Bezos, “is to make sure that if you are not a Prime member, you are being irresponsible.”


Image above: People shop in the newly opened Amazon Books on May 25 in New York City. Amazon Books, like the Amazon Go store, does not accept cash and instead lets Prime members use the Amazon app on their smartphone to pay for purchases. Non-members can use a credit or debit card. From original article.

This statement and the amount of power in Bezos’ hands should frighten all Americans. Bezos meant that Amazon will soon be so good for consumers that it would just be folly not to be a member.

But what he unwittingly implied is that as a citizen, you will have no choice but to interact with his institution to buy and sell key goods that everyone needs — on his terms.

Jeff Bezos, in other words, has a vision. To be everywhere, to be the platform for everything for every consumer. So when Bezos calls you irresponsible for not tithing to Amazon, America has a big political problem.

Amazon’s takeover of Whole Foods means that it can target and eliminate regional competitors one by one as it did with its online competitors. When Diapers.com emerged as a competitor to Amazon, Amazon simply sold diapers below cost until the company capitulated and sold itself to Bezos.

Why wouldn’t it? Even though predatory pricing is illegal, the government hasn’t enforced those laws for decades.

Whole Foods tends to source from local farms as part of a commitment to localism; these farms will now be negotiating with a much bigger entity that is committed to a ruthless model of efficiency.

There are so many ways that Amazon can use its power that it’s simply impossible to figure out what it will do. Amazon probably doesn’t even know yet; it will discover and test them, relentlessly.

Maybe you will get first in line, or last in line, for the most popular toy during the Christmas period, or maybe the restaurant you own will get access to the freshest yet limited batch strawberries you need based on whether you are giving better deals to Prime members.

Or here’s a more creative possibility. Amazon is excluding Amazon Prime video from Apple TV so that Prime members will buy its streaming device instead of Apple’s.

As the smartphone market commodifies and transforms, Bezos could simply use his combined physical and online footprint to keep you from even seeing prices at his stores unless you are using Amazon-approved electronic devices.

If Amazon were just one of many stores that would be one thing. But Amazon is quickly becoming the dominant way to buy and sell.

And this, make no mistake, is what is happening. Upon the announcement of the acquisition, Target’s stock price dropped by 10 percent and Walmart’s by 5 percent. Amazon’s rose by more than the price it is paying for Whole Foods.

Wall Street sees the writing on the wall. There is only one force that can stop Amazon from organizing and regulating basically all American retail commerce — our democratic institutions and our political system. We the people.

Bezos knows Amazon is a political enterprise at this point. The day before he announced his company’s attempt to buy this supermarket chain, he released a request on Twitter to have people offer ideas for where he can direct charity money. That is the kind of public relations undertaken by political leaders.

And Amazon put out an ad for a Ph.D. economist-cum-lobbyist “to educate regulators and policy makers about the fundamentally procompetitive focus of Amazon’s businesses.”

And he has put political fixers, like Ivanka Trump’s lawyer and ex-Clinton administration officer Jamie Gorelick, on his board of directors. He also bought The Washington Post.

The public should speak out in opposition to this merger. More than that, the government should take this opportunity to reject the entire pro-finance pro-concentration philosophy that has taken hold in this country since the Reagan era. 

It is no accident that Whole Foods founder John Mackey was forced to surrender his life’s work because financiers looking for a quick buck bought up a large bloc of shares in his company and pressured him to sell the company to Amazon.

The day before the announcement of the sale, he called these hedge funds “Ringwraiths,” after the evil characters in “Lord of the Rings.” Bezos might be the most powerful empire-builder in the land, but he had help.

This merger should frighten all of us. But it should also embolden anyone who believes that America should not be in thrall to monopolists like Bezos. For them, today, as Jeff Bezos might put it, is Day One.

See also:
Ea O Ka Aina: World Logistic Center Warehouse 6/6/17
Ea O Ka Aina: The coming tech backlash 1/5/17
Ea O Ka Aina: AT&T and Amazon Cloud outages 3/11/17
Ea O Ka Aina: Robots taking over Amazon 1/4/17
Ea O Ka Aina: Discovery  1/5/16
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IMF paper on abandoning cash

SUBHEAD: Cash payment allows the buyer and seller to be free of an information trail on every transaction.

By Norbert Haering on 5 April 2017 for NorbertHaerig.en -
(http://norberthaering.de/en/32-english/news/808-imf-anti-cash-guidelines)


Image above: Photo illustration of the shrinking role of cash money. From (http://www.truthdig.com/eartotheground/item/the_world_bank_and_the_imf_are_enabling_the_next_crisis_20161010).

[IB Publisher's note: Payments cash are popular for dealing one-on-one with individuals providing local services and products without international banksters getting a slice of the action. It also allows the buyer and seller to be free of an information trail on every transaction in their lives. It's called freedom.]

The International Monetary Fund (IMF) in Washington has published a Working Paper on “de-cashing”. It gives advice to governments who want to abolish cash against the will of their citizenry. Move slowly, start with harmless seeming measures, is part of that advice.
In “The Macroeconomics of De-Cashing”, IMF-Analyst Alexei Kireyev recommends in his conclusions:

Although some countries most likely will de-cash in a few years, going completely cashless should be phased in steps. The de-cashing process could build on the initial and largely uncontested steps, such as the phasing out of large denomination bills, the placement of ceilings on cash transactions, and the reporting of cash moves across the borders. Further steps could include creating economic incentives to reduce the use of cash in transactions, simplifying the opening and use of transferable deposits, and further computerizing the financial system.

The private sector led de-cashing seems preferable to the public sector led decashing. The former seems almost entirely benign (e.g., more use of mobile phones to pay for coffee), but still needs policy adaptation. The latter seems more questionable, and people may have valid objections to it. De-cashing of either kind leaves both individuals and states more vulnerable to disruptions, ranging from power outages to hacks to cyber-warfare. In any case, the tempting attempts to impose de-cashing by a decree should be avoided, given the popular personal attachment to cash. A targeted outreach program is needed to alleviate suspicions related to de-cashing; in particular, that by de-cashing the authorities are trying to control all aspects of peoples’ lives, including their use of money, or push personal savings into banks. The de-cashing process would acquire more traction if it were based on individual consumer choice and cost-benefits considerations.

Note, that the author is not talking about unreasonable objections and imagined disadvantages: He does count it among the advantages of de-cashing in the very next paragraph that personal savings are pushed into banks and he also does count total control of all aspects of financial life under the pros, as in the last sentence of the last quote below.

“As de-cashing gives incentives to economies’ agents to convert their currency in bank deposits, the deposit base of the banking system will increase, which can help reduce the lending rates and expand credit.”

And finally the advice to do it together:

Coordinated efforts on de-cashing could help enhance its positive effects and reduce potential costs. At least at the level of major countries and their currencies, the authorities could coordinate their de-cashing efforts. Such coordinated efforts are, in particular, important in the decisions to phase out large denomination bills for all major currencies, to use ceilings and other restrictions on cash transactions, and to introduce the reporting requirements for cash transactions or their taxation. For currency areas, a single decashing policy would be clearly preferable to a national one. Finally, consensus between the public and the private sector and outreach on the advantages and modalities of gradual decashing should be viewed as key preconditions for its success.

The differences between currency and transferable deposits are also remarkable. They are often used by both sides of the debate on the pros and cons of de-cashing.

First, currency can become technically obsolete. Banknotes fade and break, and the efforts to remedy the problem with plastics is of little help and involve unneeded costs. Transferable deposits do not have this problem.

Second, payments with currency are anonymous, which makes them a popular vehicle for abuse, tax avoidance, terrorism financing, and money laundering. Transferrable deposits are personified and generally cannot be used for these purposes.

Third, currency is prone to counterfeiting, at times on a large scale.  Transferrable deposits are not.

Fourth, currency is often perceived as a means to preserve privacy, i.e., economic operators generally are not interested in the history of the currency of their transaction.

Also, the individual right for privacy is usually enshrined in laws and transferrable deposits store each step of the payment history, which can be viewed as a threat to privacy.

Transferable deposits lead to full transparency, at least to the issuing bank, and a complete record of transactions, which in virtue of law can be used by tax and law enforcement authorities.

The paper lists a fair number of advantages and disadvantages of cash, but makes no explicit attempt to argue that overall the disadvantages are more important. The language and the recommendations make the bias more than clear, though.

Needless to say that, as with all scandalous, antidemocratic recommendations, the ones described here are officially only those of the author, not of the IMF.

See also:
Ea O Ka Aina: In praise of cash 3/6/17
Ea O Ka Aina: The War on Cash has begun 2/17/17
Ea O Ka Aina: Creepy Cashless Society 10/19/16
Ea O Ka Aina: NIRP and the War on Cash 9/10/16
Ea O Ka Aina: The War on Cash 8/25/16


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In praise of cash

SUBHEAD: Cash might be grungy, unfashionable and corruptible, but it is still a great public good.

By Brett Scott on 1 March 2017 for Aeon.co -
(https://aeon.co/essays/if-plastic-replaces-cash-much-that-is-good-will-be-lost)


Image above: Bundles of Somaliland's own currency are laid out by a money-changer on a street in Hargeisa, capital of the unrecognized breakaway republic of Somaliland in northwestern Somalia. From (https://www.northcountrypublicradio.org/news/npr/160117706/somaliland-a-pocket-of-stability-in-a-chaotic-region).

I recently found myself facing a vending machine in a quiet corridor at the Delft University of Technology in the Netherlands.

I was due to speak at a conference called ‘Reinvent Money’ but, suffering from jetlag and exhaustion, I was on a search for Coca-Cola.

The vending machine had a small digital interface built by a Dutch company called Payter. Printed on it was a sentence: 

‘Contactless payment only.’

I touched down my bank card, but rather than dispensing Coke, it beeped a message: ‘Card invalid.’ Not all cards are created equal, even if you can get one – and not everyone can.

In the economist’s imagining of an idealised free market, rational individuals enter into monetary-exchange contracts with each other for their mutual benefit.

One party – called the ‘buyer’ – passes money tokens to another party – called the ‘seller’ – who in turn gives real goods or services.

So here I am, the tired individual rationally seeking sugar. The market is before me, fizzy drinks stacked on a shelf, presided over by a vending machine acting on behalf of the cola seller.

It’s an obedient mechanical apparatus that is supposed to abide by a simple market contract: 

If you give money to my owner, I will give you a Coke.

So why won’t this goddamn machine enter into this contract with me? This is market failure.

To understand this failure, we must first understand that we live with two modes of money. ‘Cash’ is the name given to our system of physical tokens that are manually passed on to complete transactions. This first mode of money is public.

We might call it ‘state money’. Indeed, we experience cash like a public utility that is ‘just there’.

Like other public utilities, it might feel grungy and unsexy – with inefficiencies and avenues for corruption – but it is in principle open-access. It can be passed directly by the richest of society to the poorest of society, or vice versa.

Alongside this, we have a separate system of digital fiat money, in which our money tokens take the form of ‘data objects’ recorded on a database by an authority – a bank – granted power to ‘keep score’ of them for us.

We refer to this as our bank account and, rather than physically transporting this money, we ‘move’ it by sending messages to our banks – for example, via mobile phones or the internet – asking them to edit the data.

Money ‘moves’ to your landlord if your two respective banks can agree to edit your accounts, reducing your score and increasing your landlord’s score.

This second mode of money is essentially private, running off an infrastructure collectively controlled by profit-seeking commercial banks and a host of private payment intermediaries – like Visa and Mastercard – that work with them.

The data inscriptions in your bank account are not state money. Rather, your bank account records private promises issued to you by your bank, promising you access to state money should you wish. Having ‘£500’ in your Barclays account actually means ‘Barclays PLC promises you access to £500’.

The ATM network is the main way by which you convert these private bank promises – ‘deposits’ – into the state cash that has been promised to you. The digital payments system, on the other hand, is a way to transfer – or reassign – those bank promises between ourselves.

This dual system allows us the option to use private digital bank money when buying pizza at a restaurant, but we can always resort to public state money drawn out of an ATM if the proprietor’s debit card system crashes.

This choice seems fair.

At different times, we might find either form more or less useful. As you read this, though, architects of a ‘cashless society’ are working to remove the option of resorting to state cash. They wish to completely privatise the movement of money tokens, pushing banks and private-payments intermediaries between all interactions of buyers and sellers.

The cashless society – which more accurately should be called the bank-payments society – is often presented as an inevitability, an outcome of ‘natural progress’. This claim is either naïve or disingenuous. Any future cashless bank-payments society will be the outcome of a deliberate war on cash waged by an alliance of three elite groups with deep interests in seeing it emerge.

The first is the banking industry, which controls the core digital fiat money system that our public system of cash currently competes with. It irritates banks that people do indeed act upon their right to convert their bank deposits into state money.

It forces them to keep the ATM network running. The cashless society, in their eyes, is a utopia where money cannot leave – or even exist – outside the banking system, but can only be transferred from bank to bank.

The second is the private payments industry – the likes of Mastercard – that profits from running the infrastructure that services that bank system, streamlining the process via which we transfer digital money between bank accounts. They have self-serving reasons to push for the removal of the cash option.

Cash transactions are peer-to-peer, requiring no intermediary, and are thus transactions that Visa cannot skim a cut off.

The third – perhaps ironically – is the state, and quasi-state entities such as central banks. They are united with the financial industry in forcing everyone to buy into this privatised bank-payments society for reasons of monitoring and control.

The bank-money system forms a panopticon that enables – in theory – all transactions to be recorded, watched and analyzed, good or bad.

Furthermore, cash’s ‘offline’ nature means it cannot be remotely altered or frozen. This hampers central banks in implementing ‘innovative’ monetary policies, such as setting negative interest rates that slowly edit away bank deposits in order to coerce people into spending.

Governments don’t really mention that monetary policy agenda. It isn’t catchy enough. Rather, the key weapons used by the alliance are more classic shock-and-awe scare tactics. Cash is used by criminals! People buy drugs with cash! It’s the black economy! It supports tax evasion!

The ability to present control as protection relies on constant calls to imagine an external enemy, the terrorist or Mafiosi. These cries of moral panic are set in contrast to the glossy smiling adverts about digital payment.

The emerging cashless society looms like a futuristic sunrise, cleansing us of these dangerous filthy notes with rays of hygienic, convenient, digital salvation.

Signs say ‘Card only’. Who is Card? Card is a glamorous socialite, welcomed into stores. Card is superior.

Supporting this core alliance are auxiliary corps of establishment academics, economists and futurists, living life in leafy suburbs, flying business class to speak at technology conferences, attended to by a wall of sycophantic media pundits and innovation journalists preaching the gospel of cashlessness.

The Curse of Cash (2016) by Kenneth Rogoff, economics professor at Harvard, was long-listed for the Financial Times and McKinsey Business Book of the Year award, undoubtedly accompanied by invitations to financial industry-sponsored conference parties in five-star hotel lobbies.

The psychological assault is working. The Netherlands – where I face my vending machine – has become one key front in the war on cash. Here cash is becoming viewed like an illegal alien on the run, increasingly excluded from the formal economy, drawing dirty looks from shop assistants. Signs say ‘Card only’.

Who is Card? Card is a glamorous socialite, welcomed into stores. Card is superior. Look at the bank adverts showcasing their accessories for Card. Nobody is building accessories for Cash.

The frontlines, though, are now creeping to poorer countries. India’s recent so-called ‘demonetization’ was a brutal overnight retraction of rupee notes by the prime minister Narendra Modi to bring discipline to the ‘black economy’. It was an exercise that necessitated choking the poorest Indians, who depend on cash and who often lack access to bank accounts.

Originally cast in popular terms as an attempt to stem corruption, the message was later ironically altered to cast cashlessness as a way to create economic progress for India’s poor.

This message is given humanitarian credentials by the UN-based Better Than Cash Alliance, which promotes ‘the shift from cash to digital payments to reduce poverty and drive inclusive growth’, and which counts Visa, Mastercard and Citi Foundation as key partners.

The Modi action was also preceded by the initiation of the Cashless Catalyst program, ‘an alliance between the Government of India and USAID, to expand digital payments in India’, backed by a panoply of digital payments companies. These official alliances of states, corporations and public academics are impressive.

In India, well-heeled urban elites who applauded Modi’s actions from the sidelines can safely point to Rogoff’s Financial Times-nominated book of the year to justify it.

Rogoff, though, has appeared spooked, writing articles stating that he was advocating removing cash only from advanced economies with advanced banking systems. Oh damn.

Highly influential and politically powerful Harvard economist releases a global anti-cash book and is concerned when poorer nations take him seriously?

The attempt to present the cashless bank-payments society as a benefit to marginalized people is tenuous at best. If you’re a vulnerable denizen of the informal economy, an off-the-grid hustler, or a low-income precarious worker, banks and payments intermediaries have little interest in prioritizing you.

The bank-payments society will not process the activity that takes place in the peripheral cracks that form the basis of your livelihood.

Indeed, it is intended to shut down those spaces. That might be characterised as ‘progress’, but equally we might say you’re being firewalled out of the economy in an act of economic cleansing.

Under the guise of destroying the ‘shadow economy’, the underclass, the unwatched, the eccentric and the untamed will be coercively corralled into the hands of the state-corporate mainstream.

I have no special love of cash. I don’t really care for nostalgic reveries on the beautiful aesthetics of the banknote, or its texture and cultural importance within a market system, though I understand this is important to many.

I also don’t really care about the pedantic history of cash, whether it was the Tang or Song dynasty in China who first issued notes. What I care about is the unaccountable callousness of this vending machine, the one that has just blocked me from engaging in free trade.

Old vending machines didn’t do this. They had a little slot for coins, one that allowed even a ragged beggar to convert his tiny income into sustenance. Look closely at the machine. It’s actually two machines. The Payter device fused into its body does not work for the cola seller. It works for payments corporations.

You see, the cola seller has one bank account, but there are many people with many accounts at different banks approaching the vending machine. Those banks need to identify which of their account holders wishes to transfer how much money to which account at which other bank.

The device is there to deliver my card information into the transmission lines of the card payments networks, where it will be – in theory – routed to facilitate the transfer of money tokens from my account into the seller’s account, for a small fee.

This is no longer a deal between me and the seller. I am now dealing with a complex of unknown third parties, profit-seeking money-passers who stand between us to act as facilitators of the money flow, but also as potential gatekeepers.

If a gatekeeper doesn’t want to do business with me, I can’t do business with the seller. They have the ability to jam, monitor or place conditions upon that glorious core ritual of capitalism – the transfer of money for the transfer of goods.

This innocuous device exudes mechanical indifference, reporting only to invisible bosses far away, running invisible algorithms in invisible black boxes that don’t like me.

If we are going to refer to bank payments as ‘cashless’, we should then refer to cash payments as ‘bankless’. Because that’s what cash is, and right now it is the only thing standing between us and a completely privatised money system.

As in the case of previous privatisations, we’ll hear suited TV pundits arguing that if the digital payments companies don’t work for people they will be outcompeted by better private systems.

Yeah right.

When did you last see a credible competitor to the likes of Mastercard and Visa? They preside over huge network systems, subject to intense network effects. It’s in no shopkeeper’s interest to use a competitor to Visa when it’s so utterly dominant already.

The most we can hope for, then, is a benign oligopoly of payments corporations, heavily exposed to the geopolitical aspirations of the states they reside within.

The Chinese state encouraged the creation of China UnionPay precisely because they don’t want US payment megacorps installing themselves as gatekeepers into transactions made by Chinese citizens.

The new bank-payments society doesn’t actually solve the old problems – crime just goes digital, your account gets hacked rather than your wallet stolen

When mounting a defence, there are always two options. You either block an incoming attack, or you launch a strategic counterstrike, sometimes summed up as ‘offence is the best defence’.

In the former strategy, you focus on pointing out that the arguments against cash are either exaggerated, inaccurate or incomplete.

Exaggeration and inaccuracy are both present in anti-cash tirades, but incompleteness is crucial. For example, let’s say we agree that criminals prefer cash. Does that translate into ‘We should ban cash’?

Banning everything that criminals favored would almost certainly lead to a constrained, suffocating existence for everyone.

Congratulations, we ended crime, but only at the expense of ending privacy and free creative space too.

The end of crime comes accompanied by an overbearing surveillance state, always standing next to you, reaching into your most private moments, treating you like a small child that cannot be trusted. Enjoy your life.

The second mode of defence-as-offence involves attacking the proposed alternative.

We point out that the new bank-payments society, firstly, does not actually solve the old problems – crime just goes digital, and your account gets hacked rather than your wallet stolen – and, even worse, causes a whole range of new problems that were not explicitly mentioned in Mastercard’s marketing material. Let me reveal the fine-print written in invisible ink: Did we mention that in removing the ability to transact with cash we can now see everything you do and can also censor you?

Cheer up, if you have nothing to hide, you have nothing to fear!

Oh yes, I can use scare tactics too. I can point out that removing cash takes us one step closer to potentially realizing the most powerful and automated state-corporate financial control complex the world has ever seen.

Very few people either seem to understand this, or care. Like a slow-boiled frog, we don’t seem to notice the process of locking ourselves into daily dependence on an alienating, unaccountable infrastructure that makes us increasingly subservient to bureaucratic processes we cannot see.

Maybe I need to turn up the shock-and-awe. Maybe I can drum up an argument about how, in a cashless society, terrorists could target the electrical grid to bring entire regional economies to a halt.

No. My main defence of cash will be simple and intuitive. As unsexy and analogue as cash is,

• it is resilient. 
• It is easy to use. 
• It requires little fancy infrastructure. 
• It is not subject to arbitrary algorithmic glitches from incompetent programmers.

And, yes, it leaves no data trail that will be used to project the aspirations and neuroses of faceless technocrats and business analysts into my daily existence.

It comes with criminals, but hey, it’s good old friendly normal capitalism rather than predictive Minority Report surveillance-capitalism.

And ask yourself this: do you really want to live in the latter society without the ability to buy drugs? Believe me, you’ll need something to dull the existential pain.

.

India bans large denominations

SUBHEAD: India ditches 500 and 1000 rupee notes. For the first time the rich beg the poor to help them.

By Amrit Dhillon on 18 November 2016 for Sidney Morning Herald -
(http://www.inkl.com/news/for-the-first-time-in-india-the-rich-beg-the-poor-to-help-them)


Image above: Indian woman shows discontinued Indian currency notes and a photocopied ID card as she queues outside Reserve Bank of India. Photo by AP. From original article.

Driver Rahul Sharma, 25, remembers the exact day when his employer turned from a wolf into a lamb. It was November 9 when his employer called him  beta  - Hindi for "dear" - for the first time. The maid was asked to give him a cup of tea, for the first time.

"I was shocked at his sudden niceness. It went on for two days," said Sharma. For the past three years, his New Delhi-based employer has been abusive, bad-tempered, and imperious, often demanding that he turn up for work at 6am after finishing work at midnight.

"He didn't even bother to remember my name. When he wanted to summon me, he'd call out 'driver!'," Sharma said.

"On the third day, the penny dropped. He asked me to deposit 250,000 rupees ($4900) in my bank account on his behalf so that he could get rid of his black money."

Maids, drivers, nannies, and cooks in India are experiencing unusual politeness from their employers. Beyond the work they do every day, they suddenly have another use – to launder the undeclared cash which the rich have been hoarding in steel wardrobes, under the mattress and in under-bed storage.

This sudden outbreak of niceness is the outcome of India's current crackdown on "black money" - income in the form of cash that has not been declared to the tax authorities.

On November 8, the day before Sharma's employer became a lamb, Indian Prime Minister Narendra Modi scrapped 500 and 1000-rupee notes to root out corruption and force more Indians into the tax net.

In one fell swoop, the tens of millions of rupees that the rich kept at home in these denominations became worthless. If they deposit the money in the bank tax officials will pounce, imposing staggering penalties and taxes.

However until December 30, each Indian is allowed to deposit a smallish sum of 250,000 rupees in such defunct notes in their bank accounts without questions being asked. That is why the rich need the service of the poor.


Image above: A presswallah who irons the clothes in the Indian capital says he was asked by three clients to deposit 200,000 rupees in his account in return for a payment of 10,000. From original article.

Sharma and others like him have been implored by suddenly humble employers to deposit the amount in their accounts by the deadline - to be returned to their employers later.

"I refused him. I don't want to get into trouble later if someone asks me how I got this money when I'm only a driver," Sharma said.


Image above: Coconut water seller Mohan Kishore says the cash crisis has made it hard for him to pay his suppliers but he feels the hardship is worth it for the "punishment" of the rich. Photo by Amrit Dhillon. From original article.

Domestic staff and factory employees are going around with big grins, delighting in the panic and anxiety etched on the faces of the fat cats who never showed them any consideration, not to mention the delicious irony of being beseeched by their now squirming masters.

Modi's message in a recent speech - "see how I make the powerful suffer with you" - has resonated powerfully. "For once the rich are as troubled as we poor Indians are every day," said Akash Atwal, a driver with a New Delhi car rental firm.


Image above: Coconut water seller Mohan Kishore says the cash crisis has made it hard for him to pay his suppliers but he feels the hardship is worth it for the "punishment" of the rich. Photo by Amrit Dhillon. From original article.

In return for depositing the scrapped notes, domestic staff and others are being offered 10 to 25 per cent as commission. Some have accepted, happy to pocket an unexpected windfall; others, fearing trouble, have refused; and others have refused out of the principle that, if some big fish have been caught, leave them wriggling at the end of the line.

In their desperation to get rid of their ill-gotten money, rich Indians are dumping sacks of notes into the River Jamuna in New Delhi.

Some have made a bonfire of their cash at some deserted place before running away to avoid identification. Police have stopped cars filled with suitcases stuffed with 1000-rupee notes, their drivers rushing to distant relatives they haven't seen for years to ask them to deposit their cash.

"Some families who buy fruit from me regularly wanted to get rid of 100,000 ($1900) worth of notes by paying me in advance for the fruit they will buy over the next year" said Bittu Bharati, who runs a fruit stall with his uncle in Lajpat Nagar.

Others who are usually paid in cash – florists, beauticians, personal trainers and "presswallahs' who iron clothes in neighborhoods – have also been told they can have their services paid for two years in advance, just so that affluent families can dispose of their expired cash. Then it's up to them to exchange the money at the bank.


Image above: Indians stand in a queue to deposit and exchange discontinued currency notes outside a bank in Allahabad, India. Photo by AP. From original article.

Some Indians are being too clever by half. A divorced man who had defied the courts by refusing alimony to his wife was seized with a new respect for the law and offered to pay her the arrears - in the banned currency notes. The judge threw him in jail until he paid in the new notes.

Domestic staff have been chuckling while exchanging stories of what's been happening in the homes of their employers: sudden palpitations, wailing wives, altercations over how to get rid of the banned notes, profuse sweating and pure despair.

Chemists have reported a spike in the sale of sleeping tablets. Mumbai hospitals have reported a surge in panic attacks. But some doctors are feeling queasy themselves – it's estimated that about 40 per cent of doctors are paid in cash.

"I'm an ordinary man and I'm suffering hardship too. I was in a long queue on Saturday. But it's worth it. The rich need to be punished for being greedy. I am savouring the moment," said a smiling Mohan Kishore, who sells fresh coconut water on a South Delhi street.


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Creepy Cashless Society

SUBHEAD: Money may be a shared illusion, but cash abolitionists are in a hallucination all their own.

By Elaine Ou on 14 October 2016 for Bloomberg News -
(https://www.bloomberg.com/view/articles/2016-10-14/the-cashless-society-is-a-creepy-fantasy)


Image above: US one-hundred dollar bills.  From (http://wallpapersafari.com/money-100-dollar-wallpaper/).

It's fun to imagine a world without cash.

Liberated from the burden of physical currency, consumers could make purchases from the convenience of a mobile device.

Every transaction would come equipped with fraud protection, reward points and a digital record of its time and location. Comprehensive tracking could help the Internal Revenue Service reclaim billions of tax dollars lost to unreported income, like the $80 I made selling a used refrigerator on Craigslist. Drug dealers, helpless without an anonymous medium of exchange, would acquire wholesome professions. El Chapo might become a claims adjuster.

My musings about a cashless utopia were inspired by an article in the New Yorker this month by Nathan Heller.

A new book, "The Curse of Cash," by Kenneth Rogoff, a former chief economist of the International Monetary Fund, doesn't go that far, but argues that big bills should be phased out, with coins perhaps replacing small bills someday as the alternative to electronic payments. Other economists have made the case for an outright ban on physical currency.

But this universe is missing one of the fundamental aspects of human civilization. A world without paper money is a world without money.

Money belongs to its current holder.  It doesn’t matter if a banknote was lost or stolen at some point in the past. Money is current; that’s why it’s called currency! A bank deposit, however, grants custody of money to the bank. An account balance is not actually money, but a claim on money.

This is an important distinction. A claim is only as good as its enforceability, and in a cashless society every transaction must pass through a financial gatekeeper. Banks, being private institutions, have the right to refuse transactions at their discretion.

We can’t expect every payment to be given due process.

This means that politically unpopular organizations could easily be deprived of economic access.  Past attempts to curb money laundering have already inadvertently cut off financial services for legitimate individuals, businesses, and charities. The removal of paper currency would undoubtedly leave similar collateral damage.

The crime-fighting case against cash is overstated. Last year, a risk assessment of money laundering and terrorist financing conducted by the U.K. government found that regulated institutions such as banks (like HSBC) and accountancy service providers (like the Panamanian tax-shelter specialist Mossack Fonseca ) posed the highest risk of facilitating the illicit storage or movement of funds.

Cash came in a close third, but if we’re going to cite unlawful transactions as a rationale for banning cash, it only makes sense to ban banks and accounting firms first.

According to a national U.K. risk assessment on money laundering Banks and accounting firms are more utilized for money laundering than cash.

The one benefit of replacing cash with claims on cash is that a claim can be discounted, canceled or seized. That doesn’t sound terribly beneficial to most people, but this attribute is attractive to a growing contingent that wants to send interest rates into negative territory.

As Rogoff explains, negative-interest-rate policy is an important tool for central banks to restore macroeconomic stability.

During times of slow economic growth, a lower cost of borrowing gives companies an incentive to invest and consumers to spend. Physical currency gets in the way of negative-interest-rate policy because people who don’t want to accrue negative interest can simply store their cash in a safe.

By confining the national currency to regulated account holdings, the government can impose a tax on savings in the name of monetary policy.

Now if there’s one thing the population is good at, it’s tax avoidance.

That’s a good part of why we’re having this conversation in the first place. If interest rates fall too far below zero, it’s possible that citizens would find an alternative form of cash. Drug traffickers certainly would.

Money has been repeatedly reinvented throughout history, as shells, cigarettes and cryptographic code. Humans are resourceful.

Rogoff acknowledges this risk, and states that the removal of paper money will only be effective "provided the government is vigilant about playing Whac-a-mole as alternative transaction media come into being."

This sounds a lot like a policy employed in 13th-century China, where the use of gold or silver as a medium of exchange was punishable by death. Such is not the hallmark of a free society, but neither is the abolition of cash.

A cashless economy violates the basic laws under which currency has operated since before the Industrial Revolution. The justification for giving up a fundamental freedom is that it would clear the way for an experimental policy designed to place a tax on currency. Money may be a shared illusion, but cash abolitionists are in a hallucination all their own.

(Corrects description of Kenneth Rogoff's book in third paragraph of article published Oct. 14.)

1. From Henry Dunning Macleod’s The Theory of Credit:
   In Miller v. Race (1 Burr., 452), confirming Anonymous (1 Lord Raymond, 738), the Court of King's Bench decided that Bank Notes have the Credit and Currency of Money to all intents and purposes. "An action would lie against the finder; that no one disputes, but not after the Note had been paid away in Currency. An action would not lie against the defendant, because he took it in the course of Currency: and, therefore, it could not be followed into his hands. It never shall be followed into the hands of a person who bona fide took it in the course of Currency. A Bank Note is constantly and universally both at home and abroad, treated as Money, as cash: and it is necessary for the purposes of commerce, that their Currency should be established and maintained."
   
   
2. WikiLeaks, for one example. Legal marijuana-related businesses, for another.
   
   
3. Mossack Fonseca is a law firm and a one-stop shelter shop with services including tax and accounting advice. The U.K. National Risk Assessment characterizes its accountancy category as follows:
   
   “This includes not only accountancy firms, but also firms which offer a range of services including accountancy services, such as large financial institutions. Businesses providing accountancy services may also offer trust or company services, or other services covered under the regulations.”

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9/11 The Day America Ended

SUBHEAD: We built the Freedom Tower at the WTC site and denied ourselves the very freedom it symbolizes. 

By Juan Wilson on 11 September 2016 for Island Breath -
(http://islandbreath.blogspot.com/2016/09/911-day-america-ended.html)


Image above: WTC2, the south tower of the World Trade center, begins its collapse to the ground after being hit with commercial jet. From (https://www.pinterest.com/pin/334321972311799824/).

Conspiracy theories abound. And they are like fractal geometries. The deeper you look the more complicated they may seem.

Fractal noun
a curve or geometric figure, each part of which has the same statistical character as the whole. Fractals are useful in modeling structures (such as eroded coastlines or snowflakes) in which similar patterns recur at progressively smaller scales, and in describing partly random or chaotic phenomena such as crystal growth, fluid turbulence, and galaxy formation.

As a result I personally have found going down the rabbit hole of conspiracies useless. This began for me with the Kennedy Assassination. What I think is important is to question the 'authorized version" of evtents and to get a gist of who has benefited from the results of the disaster the conspiracy may have produced.

In the case of the 9/11 attacks on the World Trade Center and Pentagon it is clear that it was executed for the Bush regime by the Saudi Arabians.

The Bush Team (Cheney-Rumsfeld-Rice) wanted and got their excuse for an endless war for American domination in the Middle East as well as the fascist takeover the the operation of the United States. Cheney, in particular, had business interests that could take advantage of our military response to 9/11.

Freedom as individuals in America has never been more threatened by our intelligence and security services as it is today. 

Bursting Bubbles
Often not linked to the 9/11 disaster was the crash of the DotCom Bubble. The over enthusiastic investment in the burgeoning commercial possibilities of the internet at the turn of the millennium featuring startups like GeoCities.com and Pets.com went sour. It seemed the American economy had been euphoric for a business model with yet no substance.

In less than a decade the DotCom Bubble was followed by the speculative Real Estate Bubble bursting in 2008-2009. The following The Great Recession still roils through our economy. We have not recovered from that and have been floating with only our nostrils above the water on a billowing bubble of debt ($20trillion or so). It's been provided by the Central Banks by way of Quantitative Easing, Zero Interest Rate Percent loans (ZIRP) to banks and now Negative Interest Rate Percent (NIRP) bank savings accounts.

But that Debt Bubble is about to burst now. With our current economic model growth and employment cannot be restored without destroying the planet. We will now face the consequences of that with either Hillary (and the NSA) or Donald (and the KGB) at the helm.

The strategy the banksters see going forward is to get rid of the cash economy. It provides too much cover for individual freedom of trade. It denies the banks a slice of every transaction. It can't be easily confiscated or devalued. It means not every step of your life will cannot be monitored.

One Little Grid Failure

It seems pretty clear that the Power Grid and Information Networks are as vital to our continuity as a working civilization as agriculture, highways, factories and ports that are the foundation of our infrastructure.

The power and information systems have become ever more crucial to our continuity as a nation. So much so that people cannot survive without them. 

Problem is they are so delicate that minor glitches can take them down and make our live inconvenient... and major interruptions can cause widespread havoc and chaos.

The "cashless" economy the Techno-Optimists dream of seems cool. Just tapping your iPhone for a Starbuck's coffee, or whizzing through a tollbooth with your EasyPass sticker seems convenient.

The downside of such dependencies exists too. Recently I went for lunch to a Kauai Island Brewery and Grill on the south side. They have great beer and like many restaurants today use networked iPads for orders and billing. Bills are paid at the front desk on an iPad using an attached SquareUp credit card reader.

The brew pub only a few hundred yards from the main KIUC main Port Allen power plant so a power grid failure wasn't likely. However, that doesn't protect them from irregularities of the internet.

As we were coming through the  door the staff, including head waiter, were focused around the card reading iPad at the entrance. It wasn't reading cards. The place was packed and many tables were set to rollover customers.  

The staff was realizing that many might be leaving without a way to pay their bills. They were only letting in new customers who said they could pay cash. We had cash. This lasted only about five minutes but as he seated us the sweat still gleamed on the head waiters forehead.

An electronic cashless economy will not persist for very long, even if it could be deployed. It's too delicate. More likely we will over time descend from a cash economy to a trade/barter/gifting economy.

This is totally lost on most Americans today.

We are is such deep self denial that we built the "Freedom Tower" at the site of the old World Trade Center as we denied ourselves the very freedoms it supposedly symbolizes.

Decentalize Now!

There is no way off this high and fragile branch we cling to, but we must climb down from this perch or to fall to our deaths. Getting down successfully means being reliant on yourself and local resources for all necessities. But in your heart you already knew that.
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NIRP and the War on Cash

SUBHEAD: It is our duty to be informed and act to protect ourselves, our families and our communities.

By Nicole Foss on 8 September 2016 for the Automatic Earth -
(https://www.theautomaticearth.com/2016/09/negative-interest-rates-and-the-war-on-cash-4/)


Image above: Aerial photo of downtown Manhattan financial district which is home to much of the bankster and financial scam operations of our "faked" economy. From (http://www.wallpaperup.com).

This is Part 4 of a four part series entitled “Negative Interest Rates and the War on Cash”.

Original Part 1 is here: Negative Interest Rates and the War on Cash (1)
Original Part 2 is here: Negative Interest Rates and the War on Cash (2)
Original Part 3 is here: Negative Interest Rates and the War on Cash (3)
Original Part 4 is here: Negative Interest Rates and the War on Cash (4) 

In attempting to keep the credit bonanza going with their existing powers, central banks have set the global financial system up for an across-the-board asset price collapse:

QE takes away the liquidity preference choice out of the hands of the consumers, and puts it into the hands of central bankers, who through asset purchases push up asset prices even if it does so by explicitly devaluing the currency of price measurement; it also means that the failure of NIRP is — by definition — a failure of central banking, and if and when the central bank backstop of any (make that all) asset class — i.e., Q.E., is pulled away, that asset (make that all) will crash.

It is not just central banking, but also globalisation, which is demonstrably failing. Cross-border freedoms will probably be an early casualty of the war on cash, and its demise will likely come as a shock to those used to a relatively borderless world:

We have been informed with reliable sources that in Germany where Maestro was a multi-national debit card service owned by MasterCard that was founded in 1992 is seriously under attack. Maestro cards are obtained from associate banks and can be linked to the card holder’s current account, or they can be prepaid cards. Already we find such cards are being cancelled and new debit cards are being issued.
Why? The new cards cannot be used at an ATM outside of Germany to obtain cash. Any attempt to get cash can only be as an advance on a credit card….This is total insanity and we are losing absolutely everything that made society function. Once they eliminate CASH, they will have total control over who can buy or sell anything.

The same confused, greedy and corrupt central authorities which have set up the global economy for a major bust through their dysfunctional use of existing powers, are now seeking far greater central control, in what would amount to the ultimate triumph of finance over people. They are now moving to tax what ever people have left over after paying taxes. It has been tried before.

As previous historical bubbles began to collapse, central authorities attempted to increase their intrusiveness and control over the population, in order to force the inevitable losses as far down the financial foodchain as possible.

As far back as the Roman Empire, economically contractionary periods have been met with financial tyranny — increasing pressure on the populace until the system itself breaks:

Not even the death penalty was enough to enforce Diocletian’s price control edicts in the third century.

Rome squeezed the peasants in its empire so hard, that many eventually abandoned their land, reckoning that they were better off with the barbarians.

Such attempts at total financial control are exactly what one would expect at this point. A herd of financial middle men are used to being very well supported by the existing financial system, and as that system begins to break down, losing that raft of support is unacceptable.

The people at the bottom of the financial foodchain must be watched and controlled in order to make sure they are paying to support the financial centre in the manner to which it has become accustomed, even as their ability to do so is continually undermined:

An oft-overlooked benefit of cash transactions is that there is no intermediary. One party pays the other party in mutually accepted currency and not a single middleman gets to wet his beak. In a cashless society there will be nothing stopping banks or other financial mediators from taking a small piece of every single transaction.

They would also be able to use — and potentially abuse — the massive deposits of data they collect on their customers’ payment behavior. This information is of huge interest and value to retail marketing departments, other financial institutions, insurance companies, governments, secret services, and a host of other organizations…
….So in order to save a financial system that is morally beyond the pale and stopped serving the basic needs of the real economy a long time ago, governments and central banks must do away with the last remaining thing that gives people a small semblance of privacy, anonymity, and personal freedom in their increasingly controlled and surveyed lives. The biggest tragedy of all is that the governments and banks’ strongest ally in their War on Cash is the general public itself. As long as people continue to abandon the use of cash, for the sake of a few minor gains in convenience, the war on cash is already won.

Even if the ultimate failure of central control is predictable, momentum towards greater centralisation will carry forward for as long as possible, until the system can no longer function, at which point a chaotic free-for-all is likely to occur. In the meantime, the movement towards electronic money seeks to empower the surveillance state/corporatocracy enormously, providing it with the tools to observe and control virtually every aspect of people’s lives:

Governments and corporations, even that genius app developer in Russia, have one thing in common: they want to know everything. Data is power. And money. As the Snowden debacle has shown, they’re getting there. Technologies for gathering information, then hoarding it, mining it, and using it are becoming phenomenally effective and cheap.

But it’s not perfect. Video surveillance with facial-recognition isn’t everywhere just yet. Not everyone is using a smartphone. Not everyone posts the details of life on Facebook. Some recalcitrant people still pay with cash. To the greatest consternation of governments and corporations, stuff still happens that isn’t captured and stored in digital format….
….But the killer technology isn’t the elimination of cash. It’s the combination of payment data and the information stream that cellphones, particularly smartphones, deliver. Now everything is tracked neatly by a single device that transmits that data on a constant basis to a number of companies, including that genius app developer in Russia — rather than having that information spread over various banks, credit card companies, etc. who don’t always eagerly surrender that data.

Eventually, it might even eliminate the need for data brokers. At that point, a single device knows practically everything. And from there, it’s one simple step to transfer part or all of this data to any government’s data base. Opinions are divided over whom to distrust more: governments or corporations. But one thing we know: mobile payments and the elimination of cash….will also make life a lot easier for governments and corporations in their quest for the perfect surveillance society.

Dissent is increasingly being criminalised, with legitimate dissenters commonly referred to, and treated as, domestic terrorists and potentially subjected to arbitrary asset confiscation:

An important reason why the state would like to see a cashless society is that it would make it easier to seize our wealth electronically. It would be a modern-day version of FDR’s confiscation of privately-held gold in the 1930s. The state will make more and more use of “threats of terrorism” to seize financial assets. It is already talking about expanding the definition of “terrorist threat” to include critics of government like myself.

The American state already confiscates financial assets under the protection of various guises such as the PATRIOT Act. I first realized this years ago when I paid for a new car with a personal check that bounced. The car dealer informed me that the IRS had, without my knowledge, taken 20 percent of the funds that I had transferred from a mutual fund to my bank account in order to buy the car. The IRS told me that it was doing this to deter terrorism, and that I could count it toward next year’s tax bill.

 The elimination of cash in favour of official electronic money only would greatly accelerate and accentuate the ability of governments to punish those they dislike, indeed it would allow them to prevent dissenters from engaging in the most basic functions:

If all money becomes digital, it would be much easier for the government to manipulate our accounts. Indeed, numerous high-level NSA whistleblowers say that NSA spying is about crushing dissent and blackmailing opponents. not stopping terrorism.

This may sound over-the-top. but remember, the government sometimes labels its critics as “terrorists”. If the government claims the power to indefinitely detain — or even assassinate — American citizens at the whim of the executive, don’t you think that government people would be willing to shut down, or withdraw a stiff “penalty” from a dissenter’s bank account?
If society becomes cashless, dissenters can’t hide cash. All of their financial holdings would be vulnerable to an attack by the government. This would be the ultimate form of control. Because — without access to money — people couldn’t resist, couldn’t hide and couldn’t escape.

The trust that has over many years enabled the freedoms we enjoy is now disappearing rapidly, and the impact of its demise is already palpable. Citizens understandably do not trust governments and powerful corporations, which have increasingly clearly been acting in their own interests in consolidating control over claims to real resources in the hands of fewer and fewer individuals and institutions:

By far the biggest risk posed by digital alternatives to cash such as mobile money is the potential for massive concentration of financial power and the abuses and conflicts of interest that would almost certainly ensue. Naturally it goes without saying that most of the institutions that will rule the digital money space will be the very same institutions….that have already broken pretty much every rule in the financial service rule book.
They have manipulated virtually every market in existence; they have commodified and financialized pretty much every natural resource of value on this planet; and in the wake of the financial crisis they almost single-handedly caused, they have extorted billions of dollars from the pockets of their own customers and trillions from hard-up taxpayers. What about your respective government authorities? Do you trust them?…

….We are, it seems, descending into a world where new technologies threaten to put absolute power well within the grasp of a select group of individuals and organizations — individuals and organizations that have through their repeated actions betrayed just about every possible notion of mutual trust.

Governments do not trust their citizens (‘potential terrorists’) either, hence the perceived need to monitor and limit the scope of their decisions and actions.

The powers-that-be know how angry people are going to be when they realise the scale of their impending dispossession, and are acting in such a way as to (try to) limit the power of the anger that will be focused against them. It is not going to work.

Without trust we are likely to see “throwbacks to the 14th century….at the dawn of banking coming out of the Dark Ages.”. It is no coincidence that this period was also one of financial, socioeconomic and humanitarian crises, thanks to the bursting of a bubble two centuries in the making:

The 14th Century was a time of turmoil, diminished expectations, loss of confidence in institutions, and feelings of helplessness at forces beyond human control. Historian Barbara Tuchman entitled her book on this period A Distant Mirror because many of our modern problems had counterparts in the 14th Century.

Few think of the trials and tribulations of 14th century Europe as having their roots in financial collapse — they tend instead to remember famine and disease. However, the demise of what was then the world banking system was a leading indicator for what followed, as is always the case:

Six hundred and fifty years ago came the climax of the worst financial collapse in history to date. The 1930’s Great Depression was a mild and brief episode, compared to the bank crash of the 1340’s, which decimated the human population.

The crash, which peaked in A.C.E. 1345 when the world’s biggest banks went under, “led” by the Bardi and Peruzzi companies of Florence, Italy, was more than a bank crash — it was a financial disintegration….a blowup of all major banks and markets in Europe, in which, chroniclers reported, “all credit vanished together,” most trade and exchange stopped, and a catastrophic drop of the world’s population by famine and disease loomed.

As we have written many times before at The Automatic Earth, bubbles are not a new phenomenon. They have inflated and subsequently imploded since the dawn of civilisation, and are in fact en emergent property of civilisational scale. There are therefore many parallels between different historical episodes of boom and bust:

The parallels between the medieval credit crunch and our current predicament are considerable. In both cases the money supply increased in response to the expansionist pressure of unbridled optimism. In both cases the expansion proceeded to the point where a substantial overhang of credit had been created — a quantity sufficient to generate systemic risk that was not recognized at the time. In the fourteenth century, that risk was realized, as it will be again in the 21st century.

What we are experiencing now is simply the same dynamic, but turbo-charged by the availability of energy and technology that have driven our long period of socioeconomic expansion and ever-increasing complexity.

Just as in the 14th century, the cracks in the system have been visible for many years, but generally ignored. The coming credit implosion may appear to come from nowhere when it hits, but has long been foreshadowed if one knew what to look for.

Watching more and more people seeking escape routes from a doomed financial system, and the powers-that-be fighting back by closing those escape routes, all within a social matrix of collapsing trust, one cannot deny that history is about to repeat itself yet again, only on a larger scale this time.

The final gasps of a bubble economy, such as our own, are about behind-the-scenes securing of access to and ownership of real assets for the elite, through bailouts and other forms of legalized theft. As Frédéric Bastiat explained in 1848,

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.”

The bust which follows the last attempt to kick the can further down the road will see the vast majority of society dispossessed of what they thought they owned, their ephemeral electronic claims to underlying real wealth extinguished.

The advent of negative interest rates indicates that the endgame for the global economy is underway. In places at the peak of the bubble, negative rates drive further asset bubbles and create ever greater vulnerability to the inevitable interest rate spike and asset price collapse to come.

In Japan, at the other end of the debt deflation cycle, negative rates force people into ever more cash hoarding. Neither one of these outcomes is going to lead to recovery. Both indicate economies at breaking point. We cannot assume that current financial, economic and social structures will continue in their present form, and we need to prepare for a period of acute upheaval.

Using cash wherever possible, rather than succumbing to the convenience of electronic payments, becomes an almost revolutionary act.

So other forms of radical decentralization, which amount to opting out as much as possible from the path the powers-that-be would have us follow. It is likely to become increasingly difficult to defend our freedom and independence, but if enough people stand their ground, establishing full totalitarian control should not be possible.

To some extent, the way the war on cash plays out will depend on the timing of the coming financial implosion. The elimination of cash would take time, and only in some countries has there been enough progress away from cash that eliminating it would be at all realistic. If only a few countries tried to do so, people in those countries would be likely to use foreign currency that was still legal tender.

Cash elimination would really only work if it it were very broadly applied in enough major economies, and if a financial accident could be postponed for a few more years. As neither of these conditions is likely to be fulfilled, a cash ban is unlikely to viable.  

Governments and central banks would very much like to frighten people away from cash, but that only underlines its value under the current circumstances. Cash is king in a deflation.

The powers-that-be know that, and would like the available cash to end up concentrated in their own hands rather than spread out to act as seed capital for a bottom-up recovery.

Holding on to cash under one’s own control is still going to be a very important option for maintaining freedom of action in an uncertain future. The alternative would be to turn to hard goods (land, tools etc) from the beginning, but where there is a great deal of temporal and spatial uncertainty, this amounts to making all one’s choices up front, and choices based on incomplete information could easily turn out to be wrong.

Making such choices up front is also expensive, as prices are currently high. Of course having some hard goods is also advisable, particularly if they allow one to have some control over the essentials of one’s own existence.

It is the balance between hard goods and maintaining capital as liquidity (cash) that is important.

Where that balance lies depends very much on individual circumstances, and on location. For instance, in the European Union, where currency reissue is a very real threat in a reasonably short timeframe, opting for goods rather than cash makes more sense, unless one holds foreign currency such as Swiss francs. If one must hold euros, it would probably be advisable to hold German ones (serial numbers begin with X).

US dollars are likely to hold their value for longer than most other currencies, given the dollar’s role as the global reserve currency. Reports of its demise are premature, to put it mildly. As financial crisis picks up momentum, a flight to safety into the reserve currency is likely to pick up speed, raising the value of the dollar against other currencies.

In addition, demand for dollars will increase as debtors seek to pay down dollar-denominated debt. While all fiat currencies are ultimately vulnerable in the beggar-thy-neighbour currency wars to come, the US dollar should hold value for longer than most.

Holding cash on the sidelines while prices fall is a good strategy, so long as one does not wait too long.

The risks to holding and using cash are likely to grow over time, so it is best viewed as a short term strategy to ride out the deflationary period, where the value of credit instruments is collapsing. The purchasing power of cash will rise during this time, and previously unforeseen opportunities are likely to arise.

Ordinary people need to retain as much of their freedom of action as possible, in order for society to function through a period of economic seizure. In general, the best strategy is to hold cash until the point where the individual in question can afford to purchase the goods they require to provide for their own needs without taking on debt to do so.

Avoiding taking on debt is extremely important, as financially encumbered assets would be subject to repossession in the event of failure to meet debt obligations.

One must bear in mind, however, that after price falls, some goods may cease to be available at any price, so some essentials may need to be purchased at today’s higher prices in order to guarantee supply.

Capital preservation is an individual responsibility, and during times of deflation, capital must be preserved as liquidity.

We cannot expect either governments or private institutions to protect our interests, as both have been obviously undermining the interests of ordinary people in favor of their own for a very long time.

Indeed they seem to feel secure enough of their own consolidated control that they do not even bother to try to hide the fact any longer. It is our duty to inform ourselves and act to protect ourselves, our families and our communities. If we do not, no one else will.

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The War on Cash

SUBHEAD: A war on independence, privacy, and informal unaccounted personal behavior - all for a small fee.

By Brett Scott on 19 August 2016 for the Long and Short -
(http://thelongandshort.org/society/war-on-cash)


Image above: Aloha Spirits in Hanapepe, Kauai, Hawaii. Cash Only! From (https://pbs.twimg.com/media/Ch83WepWEAAAMoM.jpg).

[IB Publisher's note: There is a business in my town that's open 365 days a year from morning until latenight. It's called Aloha Spirits. It's a tiny store, but it provides a wide variety of things people really want - things they have habits for - including beer, liqueur, wine, sodas, cigarettes, vapes, tobacco, condoms, aspirin, decongestants, energy drinks, chips, candy, ice cream, gum and a variety of items that satisfy all the flavor cravings (sweet, salty, sour, bitter and umami). Aloha also has some fresh local produce and fruit like eggplants and pineapples. Aloha Spirits only accepts cash and so my secret desires are between us alone.]

Several months ago I stayed in an offbeat Amsterdam hotel that brewed its own beer but refused to accept cash for it. Instead, they forced me to use the Visa payment card network to get my UK bank to transfer €4 to their Dutch bank via the elaborate international correspondent banking system.
I was there with civil liberties campaigner Ben Hayes.

We were irritated by the anti-cash policy, something the hotel staff took for annoyance at the international payments charges we'd face. That wasn't it though. Our concern was an intuitive one about a potential future world in which we'd have to report our every economic move to a bank, and the effect this could have on marginalised people.

'Cashless society' is a euphemism for the "ask-your-banks-for-permission-to-pay society".

Rather than an exchange occurring directly between the hotel and me, it takes the form of a "have your people talk to my people" affair. Various intermediaries message one another to arrange an exchange between our respective banks. That may be a convenient option, but in a cashless society it would no longer be an option at all. You'd have no choice but to conform to the intermediaries' automated bureaucracy, giving them a lot of power, and a lot of data about the microtexture of your economic life.

Our concerns are unfashionable. Without any explicit declaration, the War on Cash has begun. Proponents of digital payment systems are riding upon technology-friendly times to proclaim the imminent Death of Cash. Sweden leads in the drive to reach this state, but the UK is edging that way too. London buses stopped accepting cash in 2014, but do accept MasterCard and Visa contactless payment cards.

Every cash transaction you make is one that a payments intermediary like Visa takes no fee from, so it has an interest in making cash appear redundant, deviant and criminal. That's why, in 2016, Visa Europe launched its "Cashfree and Proud" campaign, to inform cardholders that "they can make a Visa contactless payment with confidence and feel liberated from the need to carry cash."

The company's press release declared the campaign "the latest step of Visa UK’s long term strategy to make cash 'peculiar' by 2020."

There you have it. An orchestrated strategy to make us feel weird about cash. Propaganda is a key weapon of war, and all sides present themselves as liberators. Visa comes across like a paternalistic commander when assuring us that we – like a baby taking first steps – will feel a sense of achievement at liberating ourselves from the burden of cash dependence. Visa's technology offers freedom without dependence or dangers.

Visa is joined by other propagandists. In 2014 Penny for London arrived, an apparently altruistic group set up by the Mayor's Fund for London and Barclaycard, using charity as a hook to switch people to contactless cards on the London Underground. PayPal plastered cities with billboards claiming that "new money doesn't need a wallet", along with a video proclaiming: "New money isn't paper, it's progress".

Astroturfing campaigns like No Cash Day are backed by American Express, highlighting such anti-cash themes as the environmental impact of banknotes. Other tactics include pointing out that criminals use cash, that it fuels the shadow economy, that it's unsafe, and that it facilitates tax evasion.

These arguments have notable shortcomings. Criminals use many things that we keep – like cars – and fighting crime doesn't take priority over maintaining other social goods like civil liberties. The 'shadow economy' is a derogatory term used by elites to describe the economic activities of people they neither understand nor care about.

As for safety, having your wallet cash stolen pales in comparison to having your savings obliterated in a digital account hack. And if you care about tax justice, start with the mass corporate tax avoidance facilitated by the formal banking sector.

The peculiar feature about this war, however, is that only one side is fighting. Very few media champions defend cash. It is like a taken-for-granted public utility, whereas digital payments platforms are run by private companies with an incentive to flood the media with their key messages. When they fight this war, their target is our cultural belief in cash, and the belief that its provision should be a public right.

The UK government does not plan to maintain that right, and is siding with the payments industry. Their position is summed up by economist Kenneth Rogoff in his new book The Curse of Cash.

He argues that, apart from facilitating crime and tax evasion, cash hampers central banks from setting negative interest rates. In the absence of cash, everyone must keep their money in the form of digital bank deposits. During recessions central banks could then use the banking system to deliberately corrode people's deposits via negative charges, 'inspiring' them to spend rather than hoard.

The emergent consensus among economic and political elites is that this is the direction to go in, but to manufacture consent for this requires a drip-drip erosion of public resistance. Hearts and minds must be shown that the change represents inevitable and desirable progress.

Anyone defending cash in this context will be labelled as an anti-progress, reactionary, and nostalgic Luddite. That's why we must not defend cash. Rather, we should focus on pointing out that the Death of Cash means the Rise of Something Else. We are fighting a broader battle to maintain alternatives to the growing digital panopticon that is emerging all around us.

To understand this conflict, we must step back. A monetary transaction involves specific goods or services being exchanged for tokens giving access to general goods and services from others. The pub landlord hands me beer at night if I transfer tokens that allow him to get cigarettes from a shopkeeper in the morning.

There are two ways to implement this though.

The first is to give the tokens a physical form. In this scenario, 'getting rich' means accumulating those physical things and 'making a payment' means handing them over to someone else. They are bearer instruments, which means nobody keeps a record of who owns them. Rather, whoever holds them owns them. This is your wallet with notes in it. This is cash.

Alternatively, you can use a ledger. Someone sets up a database with spaces allotted to different people. This is then used to keep a record of who has tokens. These tokens have no physical form, but are written into existence. They are 'data objects', and they are 'moved around' by editing the record.

The keeper of the ledger thus maintains an account of what money is attributable to you, 'keeping score' of it for you. In this system, 'getting rich' means accumulating a high score on your account.

'Making a payment' involves identifying yourself to the keeper of the ledger via a communications system, and requesting that they edit your account, and the account of whoever you are paying.
Does this sounds familiar? It is your bank account.

Old banks used actual books to maintain these account ledgers, but modern banks use digital databases housed in huge datacentres. You then interact with them via your internet banking portal, your phone app, or by going into a branch. This is not a minor part of the monetary system. Over 90 per cent of the UK's money supply exists nowhere but on bank databases.

It is upon this underlying infrastructure that payment card companies like Visa build their operations. They deal with situations in which someone with one bank account finds themselves in a shop owned by someone else with another bank account. Rather than the pub landlord giving me his bank details for a manual transfer, my card sends messages through Visa's network to automatically arrange the editing of our respective accounts.

Many fintech – financial technology – startups specialise in finding ways to augment, gamify or streamline elements of this underlying infrastructure. Thus, I might use a mobile phone fingerprint reader to authorise changes to the bank databases. Much fintech 'disruption' merely involves putting slicker clothes on the same old emperor.

The use of high-speed communications systems to rearrange binary code information about who has what money might be new, but ledger money is as old as any bearer form.

The Rai stones of the island of Yap were huge and largely unmovable stones that, while seeming like physical tokens, were a form of ledger money. Rather than being physically moved – like cash would – a record of who owned the stones was kept in people's heads, stored in their communal memory.

If the owners wished to 'transfer' a stone to another, they 'edited the ledger' of who possessed the tokens by merely informing the community. Why physically roll the stone if you can just get everyone to remember that it has 'moved' to somebody else? The main reason that we struggle to recognise this as a form of cashlessness is that the ledger is invisible and informal.

Cashless society, though, is presented as futuristic progress rather than past history, a fashionable motif of futurists, entrepreneurs and innovation gurus. Nevertheless, while there are real trends in behaviour and tastes to be spotted in society, there are also trends in behaviour and taste among trend-spotters.

They are paid to fixate upon change and so have an incentive to hype minor shifts into 'end of history' deaths, births and revolutions.

Innovation communities are always at risk of losing touch within an echo chamber of buzzwords, amplifying one another's speculations into concrete future certainties. These prediction factories always produce the same two unprovable sentences: "In the future we will… " and "In the future we will no longer… ". Thus, in the future we will all use digital payments. In the future we will no longer use cash.

This is the utopia presented by the growing digital payments industry, which wishes to turn the perpetual mirage of cashless society into a self-fulfilling prophecy. Indeed, a key trick to promoting your interests is to speak of them as obvious inevitabilities that are already under way. It makes others feel silly for not recognising the apparently obvious change.

To create a trend you should also present it as something that other people demand. A sentence like "All over the world, people are switching to digital payments" is not there to describe what other people want. It's there to tell you what you should want by making you feel out of sync with them. Here's fintech investor Rich Ricci invoking the spectre of millennials, with their strange moral power to define the future. They are repulsed by the revolting physicality of cash, and feel all warm towards fintech gadgets.

But these are not, on the whole, real people. They are a weapon in the arsenal of marketing departments used to make older people feel prehistoric. We're not pushing this. We're just responding to what the new generation demands.

And so we get Visa's Cashfree and Proud campaign. If people really were ashamed of cash, they wouldn't need ads to tell them. Visa must engineer that shame to teach you that what you want is the same as what they want. And if you don't want it, just remember that cashless society is inevitable. Don't get left behind.

But this system will leave many behind. It is hardwired to include only those with access to a bank account; and bank accounts are hosted by profit-seeking corporations that operate at scale. They have no time for your individual idiosyncrasies. They cannot make profit off anyone who cannot easily be categorized and modeled on a spreadsheet.

So, good luck to you if you find yourself with only sporadic appearances in the official books of state, if you are a rural migrant without a recorded birthdate, identifiable parents, or an ID number. Sorry if you lack markers of stability, if you are a rogue traveller without permanent address, phone number or email.

Apologies if you have no symbols of status, if you're an informal economy hustler with no assets and low, inconsistent income. Condolences if you have no official stamps of approval from gatekeeper bodies, like university certificates or records of employment at a formal company. Goodbye if you have a poor record of engagements with recognised institutions, like a criminal record or a record of missed payments.

This is no small problem. The World Bank estimates that there are two billion adults without bank accounts, and even those who do have them still often rely upon the informal flexibility of cash for everyday transactions. These are people bearing indelible markers of being incompatible with formal institutional space. They are often too unprofitable for banks to justify the expense of setting them up with accounts. This is the shadow economy, invisible to our systems.

The shadow economy is not just 'poor' people. It’s potentially anybody who hasn't internalised the correct state-corporate narrative of normality, and anyone seeking a lifestyle outside of the mainstream.

The future presented by self-styled innovation gurus has no scope for flexible, unpredictable or invisible people. They represent analogue backwardness. The future is a world of endless consumer choice built upon an inescapable digital uniformity of automated rules, a matrix outside which you can neither exist nor think.

Back in Amsterdam I hang out with Ancilla van de Leest of the Netherlands Pirate Party. She only visits establishments that accept cash, true to her political belief in individual privacy from prying eyes.
It would be wrong to assume, however, that Ancilla's primary concern involves surveillance by a Big Brother-style bogeyman. It's true that your spending patterns reveal much about how you actually live, and the privacy implications of having these recorded in searchable database format are only starting to be uncovered.

We know that targeted individual surveillance of payments occurs by the likes of the FBI and NSA, but routinised mass surveillance could become a norm. Imagine automatic flagging systems triggered by anyone engaging in a combination of transactions deemed subversive. Tax authorities are bound to be building systems to flag discrepancies between your spending patterns and your declared profits.

It's also true that at London fintech gatherings the excited visions of cashless society now occasionally come with a disclaimer that we should think about the power granted to those who control the system.

Not only can payments intermediaries see every time you buy access to a porn site, but they have the ability to censor your transactions, like Visa, PayPal and MasterCard attempting to choke WikiLeaks by refusing to process people's donations.

We could imagine some harsh sci-fi scenario in which a theocratic regime issues decrees to payments processors to block anyone buying books deemed sexually deviant. Such decrees could be automatically enforced via code, with subroutines remotely triggering smart locks to place the offending miscreant under house arrest while automatically deducting a fine from their account.

Such automated dystopias should ideally be avoided, so a dose of paranoia about digital payments systems is a healthy impulse, even if it might be unwarranted.

But that isn't really the point. What's more important to Ancilla and me is the looming sense of an external watcher that 'assists', 'guides' or 'helps' you in your life, tracking and logging your moves in order to influence you.

The watcher is not a single entity. It's a collective array being incrementally built in stages by startups and companies around the world as we speak.

We feel it seeping deeper into our lives, a mesh of connected devices, cookies and sensors. Whether we visualise it as the benevolent eyes of a parent, or the menacing eyes of a tyrant doesn't matter. The point is that the eyes have the potential to monitor you, all the time.

The proclaimed Death of Cash is thus an episode in the broader drama that is the Death of Privacy, the death of breathing room, and the death of informal, non-measured, unaccounted-for behaviour. Every action you take must forever be attached to your digital persona, dragging with it a data trail extending back to the day you were born. We face creating an entire generation of people who do not know what it feels like to not be monitored.

For many economists, the War on Cash will be resolved by their favourite mystical demigod, the market. This guiding force prevails when utility-maximising producers and consumers go around making rational choices with perfect information about their options, and with total freedom to choose whether or not to exercise those options. If digital payment transaction costs are lower, then cash will rightly die.

The pristine realm of market theory is unfit to assess the dynamics of this situation. Our sense of what constitutes a legitimate choice does not form in a vacuum. We are born into social power structures that tell us what normality is, and that shame us for not choosing 'correctly'. You might be a rebel who challenges prevailing cultural norms, but those norms are conditioned by those with the greatest financial and media clout.

At this moment the blaring of propaganda extolling the short-term conveniences of digital payment is dulling our critical impulses to rearrange our cultural DNA. Who is thinking about the longer-term implications of building our lives around these systems, and thereby locking ourselves into dependence upon them?

Unlike a battle fought using violence, hegemony is the assertion of power by getting people to believe in it, to see it as inevitable, unassailable and normal. Visa's four-year plan is one such exercise, and once we've internalised it, we'll choose to build their power.

We'll feel strangely comforted by the MasterCard billboard endorsed by the Mayor of London. We'll find ourselves downloading ApplePay like a dazed child accepting a gift.

So, let's prepare for the War on Cash. Remember, this is not about romanticising the £10 notes with the Queen on them. This is about maintaining alternatives to the stifling hygiene of the digital panopticon being constructed to serve the needs of profit-maximising, cost-minimising, customer-monitoring, control-seeking, behaviour-predicting commercial bureaucrats.

And fear not, the Germans are onside, along with the criminals, the homeless, the street-side buskers and an army of people whose lives will never get a five-star rating on a mainstream reputation scoring system.

We will forge alliances with purveyors of non-bank alternative currency systems; and yes, we will maintain the option to use our payment cards. Because what we fight for is precisely that. The option.

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