Larry Summers, big international bank guy that he is, is for eliminating the $100 bill (along with the €500 [euro] note and I guess the €100 note as well).
Why? You ask. Because, in Larry’s eyes, only criminals use those bills. Ipso facto, remove that cash and you remove the criminals. Remember, from my post, “Whither the $1,000 Bill?,” Nixon thought the same thing in removing $1,000 and higher denomination bills. It was so wonderful when all crime just disappeared in 1969 after those bills were removed from circulation.
Oh, wait, crime didn’t go away. Hmmmmmm. I’m sure all the eggheads who thought up that plan are still scratching their heads on what the flaw in the plan was. Not surprisingly, Larry’s a grad of MIT and Harvard.
He probably also thinks that only revenuer-dodging hillbillies and other cretins use cash at all. Larry probably hasn’t used cash at all in his adult life. People who travel in his rarefied elite political, educational and financial circles rarely do.
But let’s dig a little deeper. Why would a banker want to eliminate major cash tools? Vehicles that actually move money very efficiently in many circumstances.
You see, cash is actually a hindrance to governmental control. It’s difficult to control people who make use of cash. It’s extremely difficult to trace. Credit cards and online accounts, on the other hand — banks and governments know everything. Cash transaction, not so much. In a world where the government increasingly seeks to insert itself into every nook and cranny, every interaction and transaction of our lives, electronic money is a leash, cash is more like an invisibility cloak.
Imagine when the government has full control of, for example, the health sector. You decide to buy some pork chops or some other “unhealthy” item at the store. Perhaps a government watchdog has decided that with your bad heart, you shouldn’t have chops or any pork products. It monitors your transaction because you are paying with a credit card or waving your smartphone at a terminal. It decides to cancel the purchase. Take chops back and buy that endive a little message pops up on your phone or the credit card terminal. Or you could whip out that cash and take those bad boys home and barbecue them!
With a credit card or online payment system nothing is private. Your life is no longer just your business.
Interestingly, a lot of banks wouldn’t mind this because, many will tell you, frankly, dealing with cash is a hassle for them. They have to hire people to deal with it. It takes up space and costs money to transport. It’s so much easier to deal with a lot of electronic blips. Also, most people are used to dealing with fees for using credit cards and online banking so the bank gets away with nickel and diming its clients. No one ever sees the blips that disappear into the banks’ and card processors’ pockets.
Try to charge for cash and people walk. However, eliminate much of that cash and where can they go?
Additionally, when cash becomes an afterthought currency manipulation becomes much easier. Electronic blips do not appear to have as much of a value as something you can hold and feel. It’s no accident that the great inflation happened when Nixon broke the gold standard. I think we need to be moving in the opposite direction and moving more towards a cash economy. I’m for making the gold coins that are minted more accurately reflective of their true value. Make that one-ounce coin worth $1,000, not $20.
A final note. Seriously, Larry Summers is a very smart guy. He’s been at the World Bank. He was a Harvard professor before he was 30. He’s been involved in major financial institutions and legislation. He’s a liberal Democrat and was the head of Harvard but said some politically correct things and was forced out by the SJWs of the day. Not everything that comes out of the mouths of smart people is smart.