You may have recently heard or read about James Rickards’ bestselling book The Death of Money, describing the collapse of global currency and how it would bring down the world financial system. This week’s Nobody Asked Me But . . . column has nothing whatsoever to do with this particular topic.
No, the subject I wish to dissect here is the death of cash. You remember cash, don’t you? Whether you know it as bucks, coinage, scratch, scrip, dough, bread, lettuce, green, smackers, moolah, samoleons, or dead presidents, I’m sure you recognize that it is something you can hold in your hand and exchange for something you want.
Just think of all the adages and aphorisms that cash has given the English language. Will future generations have a clue as to what you mean when you say the buck stops here? How much is a penny for your thoughts worth? What in tarnation are you referencing with heads I win, tails you lose? Is it a good thing when someone tries to nickel and dime you? Should you give somebody your two cents worth? What exactly does it mean when you want to cash in?
I believe it was the great circus mogul P.T. Barnum who is credited with the quote, “Nobody ever lost a dollar by underestimating the taste of the American public.” Would it have worked if he had used the word “bitcoin” instead of dollar? If you are like me, you probably would like to know what exactly is a bitcoin? A Google search comes up with “bitcoin, often described as a cryptocurrency, a virtual currency or a digital currency — is a type of money that is completely virtual . . . This makes it possible to trace the history of bitcoins to stop people from spending coins they do not own, making copies or undoing transactions.” That makes about as much sense as the assembly directions enclosed inside the packaging of IKEA furniture.
What would be more useful is to know whether you can flip a bitcoin and have it come up heads or tails. Will bitcoins jingle in your virtual pockets? Can you use one to make a call from a payphone? (Whatever that is.) Will it substitute for a screwdriver if you need to open up the battery compartment of your grandkid’s Thomas the Tank Engine talking book?
Let’s take a look at the pros and cons of using cash versus other forms of exchange for transactions. For one thing, cash doesn’t run out of batteries. It can also be used during natural disasters when there is no power. Even if it devalues to a fraction of its worth, it can still be used as fire-starter to help keep you warm. Another advantage to cash is that it doesn’t identify you or give away information about you that you may not want to share (other than the fact that you can afford to buy that overpriced and never to be used fondue set, say). You don’t have to download an app or pay exorbitant transaction fees for the convenience of not having to carry a wad of cash with you. Mind you, you are still forced to carry around with you 22 other credit, debit and shopper points cards just in case you find an incredible deal that isn’t on your shopping list.
Although 85 per cent of the world’s retail purchases still rely on cash, non-cash transactions are rising at a rate of 11 per cent annually. As recently as 2017, Forex Bonuses trading site listed Canada and Sweden as the top two cashless countries, with only approximately 20 per cent of transactions involving cash.
I’m one of those 20 per cent. I’m the dinosaur who still always carries cash with me. Bills in one pocket and coins in the other. I’m the geezer in front of you at the Country Grocer checkout who not only pays in cash but insists on fishing out coins from deep down a side pocket so that he can pay the exact amount without having to force the cashier to make change for a larger bill. It sounds something like this: “I know I’ve got the right change here somewhere. Let’s see, 20 dollars and 40 cents, eh? Okay, here’s a 20. Now there’s a dime. Another dime. Oops, that’s my dental floss. Now there’s a quarter. How much have we got now? Too much? No, no. No need to give me a nickel change. Give me back that dime and I know I’ve got a nickel down there somewhere. Just hold my car keys and my pocket knife and I’ll find it in no time.”
Sound familiar? In the meantime, you and the 12 shoppers behind you are frustrated to just about the boiling point while I’m checking the date on that last nickel to make sure it’s not a collector’s coin worth thousands of dollars.
The drawbacks to having real money in your purse or pockets? For one thing, cash has to be stored and protected. Once it is lost or stolen, there’s little or no chance that it will be returned to you. Another problem that most of us are forced to learn eventually is that once it is spent, you have to somehow get more. This may mean a trip to your financial institution to make a withdrawal, or failing that, you might have to actually go out and earn more of the stuff.
Another argument against cash is that it’s not exactly convenient for making large transactions like coming up with the down payment for a house, for instance. Unless your aim is to do a little money laundering for some nefarious business dealings, you would probably need to back up a Brink’s truck filled to the gills with 50-dollar bills if you wanted to invest in some Salt Spring real estate with some cold, hard cash.
Nobody asked me, but with the younger generation opting for PayPal, e-transfers, cryptocurrencies and mobile apps, there will probably come a time when nobody will want to take my two cents worth (especially if the global financial system does come crashing down). If I’m still around then, you can be sure I’ll still be reaching way down into my pocket and paying with something that still has value. Dental floss.