The death of cash is happening…
The Death of Cash
It runs your life. Without it, you’d struggle to find food and shelter. It’s a crucial piece to making your world work.
Today a whole industry is built around it. It’s created millions of jobs.
Cash, dough, loot, moola. It goes by many names… It’s money. Easily divisible and used to trade.
Before its invention, folks traded goods directly. A chicken for a basket. Two cows for a home… But this was a big problem. How could a fisherman buy a home? Give the homeowner thousands of fish? Clearly not. The fisher would have to go trade for cows or anything else the homeowner needed. It was inefficient.
Then came along the invention of money. Beads and seashells were some of the most primitive forms. Folks could easily move and divide them. Traders formed ranking systems to value the money. Ten beads were worth a loaf of bread and so on. The fisherman could sell his fish for beads. When he saved enough he could buy a home. Much easier than collecting animals to trade.
This system was built on trust. When a seller accepts beads, it’s expected that other sellers will do the same. Money is built on trust.
“Money is built on trust.”
Silver and gold soon took the front stage. Their rarity and shiny factor pulled many groups toward them. A thousand years ago you could travel the world with only gold in hand and survive.
The next stage of money took place with banks. Folks that had lots of gold needed a safe place to keep it. Banks filled that need. Bankers quickly developed a better system… promise notes. A piece of paper with a bank’s stamp on it could be exchanged for gold. Now traders didn’t have to risk carrying the heavy gold. This made trading even easier.
A promise note is built on the banks trust. Greedy banks quickly found they could write as many promise notes as they wanted…
For example, a bank has 500 ounces of clients’ gold. It initially wrote 500 promise notes each worth one ounce of gold. Behind clients’ backs, the bank wrote an extra 500 notes and spent them. Other traders assumed they were worth one once of gold.
Now the first 500 people to redeem their ounce of gold are fine. But the last 500 are out of luck. Banks that did this hoped the gold would not be redeemed. But it was. Folks lost trust and tried to redeem their gold all at once. A bank run… bankruptcy.
History Repeats Itself
Thousands of banks have done this. All major banks do it today. But it’s even worse. Today dollars don’t even have redemption value. The dollars in your pocket are only worth the cotton their printed on… or what someone else will accept them for.
U.S. dollar bills used to say “Silver Certificate” at the top. It’s now “Federal Reserve Note.” You can’t trade them in for silver anymore. The U.S. printed way too many promise notes. The U.S. couldn’t keep it’s promises. At that point over 100 million folks used dollars. The system was too big to fail.
Now we’re currently entering the next stage of money’s life. The digital age. Data on computers already represent the majority of “cash” today. We now have to trust numbers that flash on screens. It’s your life’s savings. Countries are outlawing physical money transactions. Soon dollars will disappear altogether. The death of cash is upon us.
Digital money gives governments more control. All of your purchases can be tracked. So good luck avoiding taxes down the road.
Plenty of benefits come with digital money. But governments and big companies benefit the most. Average folks get the short end of the stick.
It’s important to know money’s background. You definitely overlook the journey the dollars in your pocket have taken. The digital stage we’re entering will create room for even more manipulation. Pay attention.
Knowing how the system works allows you to better protect yourself… and even profit. The death of cash is happening. Shoot me an email if you’re interested or just leave a comment if you want more insight. I’m just scratching the surface here.