The War Against Cash

Where every keystroke becomes part of one’s permanent record, where e-devices track one’s every move, the ability to pay physical cash for a financial transaction may have become the only off-the-record action one can execute, unless, of course, it’s recorded on one of the ubiquitous security cams. But signs are everywhere that this last freedom is slated for oblivion. Many paths appear aimed toward a global monetary system in which every buy/sell exchange, from castle to candy bar, is recorded onto the accumulating history of each human unit. The trick has been to prepare the public in step-wise, frog-in-gradually-heated-water fashion.

“There is nothing, however, in standard theories of money that requires transactions to be anonymous from tax- or law-enforcement authorities.” —Kenneth Rogoff, 2014

In 2014, Harvard economist Kenneth Rogoff (winner of the 2011 Deutsche Bank Prize and a former chief economist for the IMF) authored “Costs and Benefits to Phasing Out Paper Currency” in which he wrote “Paper currency facilitates making transactions anonymous, helping conceal activities from the government in a way that might help agents avoid laws, regulations and taxes…. [E]lectronic money, in principle, can be traced by the government.” 78% of U.S. currency in circulation is in $100 bills, and similar high/low denomination ratios are seen in Japan and the EU. That large denomination bills are the preferred currency for much of crime — drug running, money laundering, tax-evasion — has become the prime argument for doing away with them in favor of electronic money. In 2017, Rogoff published a book on his theories, The Curse of Cash. Other prominent economists, e.g. former Treasury Secretary Lawrence Summers, have, likewise, advocated dropping currency. The discussions have generally focused on large denomination bills only, $100, $50, perhaps $20. Still, Rogoff has written flatly that “Currency should be becoming technologically obsolete”.

Cash is the enemy because privacy is the enemy, and privacy is the enemy because it makes governmental control difficult. But the very philosophy of cashless society, as expressed, is a stand against the Fourth Amendment of the U.S. Constitution, because it would be well-nigh impossible to find a purer expression of “unreasonable search” than guaranteed governmental availability to all personal financial transactions. Any truly anonymous electronic exchange would be of no value to governmental inspectors, as Rogoff made clear: “[A]nonymous electronic fiat money has all the drawbacks of an anonymous paper currency in facilitating tax evasion and illegal activity.”


“None of the cryptocurrencies are truly decentralized. They’re actually centrally controlled by the miners, who can basically rewrite history at will.”

Nicholas Weaver, International Computer Science Institute, UC Berkeley, 2018

Cryptocurrency is an electronic form of “money”, outside of central banks or credit card systems, based on blockchain technology. Financial transactions are encrypted so that, in theory, personal identity is unknown. The first cryptocurrency, Bitcoin (BTC), was introduced in 2009 by an anonymous entity, “Satoshi Nakamoto”. Bitcoin is still the most popular crypto, although plenty of others have been introduced. Any search engine will take you quickly to more information on the system than anyone outside of geekdom would want to know, but the point here is that cryptocurrency claims to be “… outside the influence of central banks and governments”. However, Bitcoin is “pseudonymous”, rather than anonymous, in that owners are not identified as persons but as bitcoin addresses. But the widely-held assumption that no authority can link a Bitcoin address to the human owner is dubious to say the least. The IRS itself is reported to be using Bitcoin-tracking software.

Dollar value of BTC has fluctuated wildly. On January 2, 2016 it stood at $375. Not two years later —  December 17, 2017 — it hit $19,783. As I write, it’s below $3,800. Projections for Bitcoin’s future vary from the claim that it’s now in “death spiral” to “Institutions still bullish”. But despite value swings, on-the-ground observation shows it alive and well, as it’s becoming more widely accepted within the business community, and it’s now possible to pay Ohio state taxes with Bitcoin by using a third party to transfer BTC to dollars.

But here’s the rub: While Bitcoin is showcased as escape from governmental scrutiny (nobody has located/verified entity “Satoshi Nakamoto”), it is quite possibly a creation of governmental interests as an invitation to the unwary. As UC Berkeley’s Nicholas Weaver intimates in an aptly-titled interview, “Bitcoin is Bullshit”, miners of Bitcoin wallets could be anyone or any collective. How cunning, how masterful it would be for a governmental power structure to introduce a novel system by way of a mythological revolutionary, and sell it as a really hip means of outwitting itself. Big Brother at his best.


“Would central banks jump to the rescue and offer a fully anonymous digital currency? Certainly not. Doing so would be a bonanza for criminals.”

—Christine Lagarde, IMF Director, November, 2018

With the foregoing in mind, consider that Christine Lagarde, Director or the International Monetary Fund, on November 14, 2018, gave a speech titled “Winds of Change: The Case for New Digital Currency” at the Fintech Festival In Singapore. Her presentation to the New World’s players in financial technology was a pitch for the creation by central banks of a system of digital money.

Money itself, she argued, is changing in the “fintech revolution” in which users will expect money to be convenient, user-friendly, cheap, safe, integrated with social media and available for person-to-person use, “including micropayments”. “And of course”, she underscored, “protected against criminals and prying eyes.” And “Let me be more specific: Should central banks issue a new digital form of money?” (bold in original text) ”What role will remain for cash in this digital world?”, Lagarde asked rhetorically, “Already signs in store windows read ‘cash not accepted’ …. [D]emand for cash is decreasing—as shown in recent IMF work. And in ten, twenty, thirty years, who will still be exchanging pieces of paper?” Electronic money “responds to what people demand and what the economy requires.” (italics in original).

Regarding the issue of individual privacy, Lagarde tried to make a case that e-money provides greater security and consumer safety, but when she had to admit that real personal anonymity is not to be allowed, it crushed her case for anyone already skeptical: “Would central banks jump to the rescue and offer a fully anonymous digital currency? Certainly not. Doing so would be a bonanza for criminals.” What to do? Lagarde’s solution is to seek a “tradeoff” — a “middle ground” between privacy and “financial integrity”. In the IMF’s “middle ground” the identities of persons would not be disclosed to third parties or governments “…unless required by law.”  (italics mine)

Two days prior to Lagarde’s speech, the IMF had posted at its website a detailed coverage of the issue, “Casting Light on Central Bank Digital Currency”.


“Get ready for a world currency”

The Economist, January 9, 1988

The seers of 1988 had 2018 in mind for establishment of the expected world currency, named the “phoenix” for purposes of discussion. They were inaccurate as to date, but the past thirty years have set the world toward some end game largely about homongenization and control, and people are trending blindly toward it like herds of lemmings. The World Bank is advocating for cashless transactions and so is a collective of governmental and private entities known as The Better Than Cash Alliance, funded by the Citi Foundation, Gates Foundation, Mastercard, Visa and the U.S. Capital Development Fund. In 2015 the Bilderberg Group discussed implementation of electronic control with electronic money the driving element. BBC reports electronic purchase now more common than cash, and Sweden is already nearly cashless, with criticism of the system centering on difficulties for the elderly rather than on Orwellian potential for total governmental observation and control. Thousands of Swedes are even having themselves chipped to facilitate cardless transactions.

The U.S. dollar has been the world’s reserve currency since Bretton Woods in 1944, but recently, everywhere from Forbes to the Wall Street Journal to books, there is chatter about the faltering dollar and the need for global monetary reform, a “reset”. What a world currency would be named or backed by are not as critical as the issue of the outlawing of financial exchange invisible to governmental eyes. The IMF’s electronic money visualized by Lagarde would necessarily be made the only game in town, or anywhere else. Rogoff made that clear in December of 2018: “For the moment, the real question is if and when global regulation will stamp out privately constructed systems that are expensive for governments to trace and monitor.” The system the IMF plans would amount to an electronic fortress against challenge. Any hint of Jeffersonian “rebellion” would be detected in embryonic form and quickly aborted.

As Rahm Emanuel has said, “You never want a serious crisis to go to waste. What I mean by that is an opportunity to do things that you think you could not do before.” Messaging on multiple fronts over time, and institutional disincentives to use cash, have normalized electronic transactions in the public mind. Taking a last step by making a cashless system absolute would simply require a sudden financial crisis, perhaps manufactured, causing enough stress to produce a public outcry for the government to fix the situation. Why shouldn’t that fix be cashless and electronic? Given the direction of things these past years, it would seem the natural thing to do.