Right on the Money: Doug Casey on Economics, Investing, and the Ways of the Real World with Louis James

Chapter 32

Doug Casey on Cashless Societies

March 7, 2012

Louis: Doug, we’ve had a lot of questions from readers about the apparent push governments are making to go to paperless currency—all electronic, no cash. Do you think that’s likely, and what would be the implications?

Doug: I think it’s probably inevitable. It’s not just cash, but the whole world is becoming increasingly digital. Credit cards already work very well all around the world, and everyone in the world, it seems, will soon have a smartphone—or at least everyone who might have any cash.

But it’s not just a question of evolving technology. Governments hate cash for lots of reasons, starting with the fact it costs a couple of cents to print a piece of paper currency, and they have to be replaced quite often. As the United States has destroyed the value of the dollar, they’ve had to take the copper out of pennies, and soon they’ll take the nickel out of nickels. Furthermore, with modern technology, counterfeiters—including unfriendly foreign governments—can turn out U.S. currency that’s almost indistinguishable from the real thing. And the stuff takes up a lot of space if it’s enough to be of value. So sure, governments would like to get rid of tangible currency. They’d like to see all money kept in banks, which are today no more than arms of the state. But it’s not so simple: Increasing numbers of people trust neither banks, most of which are insolvent, or currencies, most of which are on their way to their intrinsic ...