How long is the road to a cashless society in the United States?
Precious metals oriented articles often declare sinister motives for the concept even being discussed.
What happens to money when it is not even backed by paper? That is fiat money on steroids.
I was catching up on my reading last night and noticed an article in the latest edition of The Economist magazine.
The Swedes and the Danes love the cashless society so much that they now hate even bothering with cash transactions. This has gone to the extreme where they post “No Cash” signs like we post “No $100 Bills” signs.
The Germans and the Italians are still big fans of cash. In each case, there is a logic to supporting cashlessness and the continuing use of cash.
For Scandinavia, it cited the quicker speed of transactions for every person paying by tapping a phone. It also pointed out that the costs of each transaction drops the more of them that are conducted that way. It costs more to handle cash.
There is a self-reinforcing convenience-cost saving loop going on. In such an environment, cashlessness is the popular choice.
For Germans, the pro-cash preference is reinforced by memories of the East German secret police state. Personal privacy is valued more highly than convenience – at least at this stage.
Another reason, for cash is tax evasion. Off-the-books transactions frustrate government efforts to take its share. This aspect animates a negative feedback loop. More intrusive government efforts to get its taxes causes push back by the law abiding who feel oppressed by regulation.
Both the positive and negative feedback loops exist in the United States.
The positive one seems to be winning, but not as rapidly as in Scandinavia.
I know it is much easier to pay a taxi with a credit card nowadays than when I had to fumble with cash.
I was reminded of this at the Anaheim, Calif., American Numismatic Association convention.
The cost of a taxi to and from the Los Angeles airport was well over $100.
It is one thing to use cash to pay $5 and a $1 tip for lunch at Too-Dars in Iola, Wis. It is quite another to have to stuff a wallet with enough of the stuff to pay such a high taxi fare.
When will the tipping point to an all electronic money economy be reached in the United States?
That is the key question. I do not know the answer.
If I did, I would know how much longer the coins and bank notes we all collect will continue to be created and spent.
Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."
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