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The Collapse of Cash

I once went to my bank to withdraw some cash and was told I couldn't have it. That's something you can't easily forget. I know I haven't.

I was in the United Kingdom at the time. I had an account with a global bank, supposedly as accessible overseas as in the U.S. But U.K. law had recently changed: Banks now insisted that you tell them what you wanted the cash for before they would give it to you. Her Majesty's government wanted to know.

I didn't owe this bank any money. They owed me, since I had funds on deposit with them. But if I had tried to muscle my way past the teller and guards to grab my money out of the vault, I'd have been arrested and convicted as a bank robber.

Ironic, isn't it?

There's another irony afoot these days: The same institutions that create and traffic in money now want to ban it.

Paper and Coin

Once upon a time, sensible people regarded paper money as a symbol of monetary irresponsibility. They rightly considered that anything created out of thin air by “fiat” could just as easily be destroyed in the same way. They preferred coins made of precious metals whose value transcended national boundaries and governmental authority.

Nowadays, some people treat cash as “safe” asset. They reckon that their wealth is more secure in the form of paper in their home safe, since banks everywhere are leveraged to the hilt and propped up by government bailouts. Let the government try to confiscate that!

This is where the buzzer sounds, signaling a wrong answer...