Estonian Economist Suggests Abandoning Cash 454
J-Georg writes "Raul Eamets, professor of macroeconomics at the University of Tartu, proposed today during his TEDx talk that Estonia should stop using cash at all when adopting the Euro as the national currency (Estonian original). He also pointed out that abandoning cash would not be only important for the Estonian economy as a whole but also is a real challenge for both IT and banking sectors and would also improve Estonia's image as an IT-tiger."
Abandon all your cash (Score:3, Funny)
I'll take it
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If you are the only one with cash and everybody has abandoned it, it would be useless (except to burn it and keep yourself warm may be).
Re:Abandon all your cash (Score:4, Informative)
You assume he's talking about credit cards. I don't know about GP's country, but here we mostly use debit cards.
Most people already use it, but they also keep cash because most shops don't accept it for payments under 5E (they have to pay a fee for each transaction), and because they're still slower than cash.
Re:Abandon all your cash (Score:5, Interesting)
It is an outdated model stuck on physical money and a scam run by institutions pocketing the fractions (think salami slicing).
The rise of "paperless" money, rapid currency exchange fluctuations + digital microtransactions at consumer level have made this very feasible.
I want my bank account to be able to say ".0238538327" after the whole numbers' place. If I make games, I want to be able to sell virtual goods at $0.00056 per transaction if I want to. When your audience is the entire internet, small amounts like that can rack up to substantial numbers. I want institutions to be able to do that for me affordably, and I want to see that number reflect in my account instead of being thrown away.
I mean in this age of digital, how much does it cost to actually make/record/monitor a transaction when everything's already digital?
Any takers? Maybe this is an opportunity to create a new startup. Maybe this is a niche that can challenge Paypal. Take it. Run away with the idea. I don't care who implements it, as long as it gets implemented.
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Who pockets the fractions? So the bank tells you that you get 4.0391759% interest, there is no magical fractions of a penny being made. They round off the number, and pay you from the amount of rounded off payments they get from someone else. All of the money they collect is rounded off from some fraction, but there is no fractional cent being created from thin air.
I know the whole "magic money" thing made for a great plot device in some amusing movies, but can anyone show how it would work? Show your work,
The price of gas (Score:3, Insightful)
Seriously? It ain't that hard to see all around you. The gas station prices their gas something something-point nine. Say it's 2.50 a gallon rounded up, but it's really 2.49.9 - so for every ten gallons you buy, you keep a penny of that 2.50. Whoopee right?
Now you're the government. You tax everyone at 7 percent.A sale of 5.33 now becomes 5.7031 - except it isn't, because registers are set to round up. So it's actually a sale of 5.71. Multiply that by how many Billions of sales in a year? In a year that's p
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In Britain, taxes are rounded down. For income tax, you round down to the nearest pound, and then apply the tax rate to that. For VAT (sales tax), you round the VAT on each line item down to the nearest 10th of a penny, then round down the total to the nearest penny.
Re:Abandon all your cash (Score:5, Funny)
It is an outdated model stuck on cheap hardware and a scam run by institutions paid by institutions pocketing the fractions (think salami slicing).
I want my bank account to be able to say ".0287863987569328746598137649582736985555726938475629835576459837" after the whole numbers' place. If I make games, I want to be able to sell virtual goods at $0.000000000000000000000000056 per transaction if I want to. When your audience is the entire internet and even very poor bushmen from Africa are on it, small amounts like that can rack up to pay for my six-pack. I want computer manufacturers to be able to do that for me affordably, and I want to see that number reflect in my account instead of being thrown away.
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Well, there you go. Also, there's no reason not to have imaginary numbers in currency.
Or even better, prizes sould be in C^3 !
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Assume a bank in the USA will only track dollars to the second decimal. 0,01 USD is then the smallest amount that can be traded.
A bank in Europe has a similar granularity, tracking 0,01 EUR.
Banks in China, Thailand and Turkey track their currency to an comparable precision, so I'm pretty confident a Thai bank will track amounts as small as 0,25 THB. After all, there are coins in actual circulation for that amount. Maybe they follow the worldwide model and track the THB with two decimals, having 0,01 THB as
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From the computational point of view, unlimited precision is not free (and very prone to problems)
a fair rounding system goes a long way
I want to be able to sell virtual goods at $0.00056
Well, you can do that. Take their CC number but only charge them if they go beyond a certain value. And then account for the rounding and compensate accordingly in subsequent transactions.
(also what's with slashdot not allowing copy-paste on the comments??)
Re:Abandon all your cash (Score:5, Insightful)
Oh sure. Like most any man on the street he happens to have the time, income to support himself, money to start the project, PHDs in encryption, economics, programming and good expieriance at international diplomacy to implement this himself and not be a lazy ass.
Re:Abandon all your cash (Score:5, Funny)
Yeah, it should be pretty quick and easy to get a decent bank replacement system up and running. A few hours may be a bit short, but lets give the coder 2 days assuming he's using rails and a transactionless NoSQL solution to get the job done in time. We may need to test it a bit, so leave time for unit testing. After all, this is people's money, so you can't be too careful.
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He's not demanding, he's suggesting.
Re:Abandon all your cash (Score:4, Interesting)
Your getting close to the real problem of abandoning cash, I live in Ireland and many smaller businesses will not accept a bank card for transactions of less than 10 euro's due to the transaction fee's charged by the banks.
Trouble is a lot of the time you will make small transactions from your morning cup of coffee, buying a paper , a carton of milk and you can't always make the value of the transaction raise above 10. Then there are some transactions which cannot really be done other than in cash, such as taxi rides.
There has to be some sort of symbolic token which can be exchanged for goods and services, like um cash maybe.
Of course you could have some sort of credit account or prepay system but then you can have your micro payment but either your customers have to prepay a minimum amount or your customers all owe you a small amount.
Google is one example if you run Google ads on a small website you need a good number of clicks on the ads before you can even go to Google to get your payment. So essentially you can end up hosting ads for free and Google gets its revenue from the advertisers as they are actually billed per click.
Even the phone company which bills by the second tends to have a minimum of a minute or a 5 cent charge which is largely covering transaction costs.
Money is here to stay even if most of us don't need to carry more than a few dollars/euro's/ ...
Re:Abandon all your cash (Score:4, Insightful)
Your getting close to the real problem of abandoning cash...due to the transaction fee's charged by the banks.
But this is a logical fallacy, right? Your assumption is that electronic transactions cost a minimum amount of money, but cash transactions are free.
But cash transactions do involve work! The bank teller takes money and gives money, all day long. That person gets paid, and all they might do during the day is handle cash. If a teller makes $100/day, and processes 200 transactions a day, each transaction cost the bank $.50.
That entire time, the teller is using computers that interface with backend servers. Each of those machines, and the network routers/switches in between are sucking down electricity. And there are people behind the scenes, making loan deals with the Federal Reserve (in the US). And people who do various paperwork, and people who run collections, people who do technical/customer support, etc., who all work for real money, and whose job is to directly or indirectly support such cash transactions.
In the cash world, the bank "eats" these costs. Obviously, they don't really eat them, they just put them into interest rates. The electronic transaction world really doesn't seem to have any more costs, but banks are requiring transactions fees. In other words, they are trying to recoup their costs up front, something that is impossible to do in the cash world due to tradition.
Moral of the story: There is no such thing as a free lunch. Cash is no better answer than electronic transactions.
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Then there are some transactions which cannot really be done other than in cash, such as taxi rides.
Why those? I can't remember the last time I paid cash for a cab. In the old days they did offline transactions, but these days they just connect via GPRS.
Might I suggest an alternative currency (Score:5, Funny)
Leaves might be a better choice. Given the country's forests every citizen would become quite wealthy overnight and it wouldn't require any additional infrastructure. I believe the next US Congress will be considering adopting leaves in the next session as the new US currency since leaves are worth more than the dollar.
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Leaves might be a better choice. Given the country's forests every citizen would become quite wealthy overnight and it wouldn't require any additional infrastructure.
I know you're joking (hehe), but in reality that wouldn't exactly be true. The more of a currency there is, the less one unit of it is worth. For example, lets say there are a quadrillion dollars in existence; one dollar by itself isn't worth very much. However, if there were only a billion dollars, the dollar is worth a heck of a lot more. Same with leaves; the more leaves there are, the less each leaf by itself is worth. Every time someone plants a tree and waits for it to grow (err, that might take a whi
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I know you're joking (hehe), but in reality that wouldn't exactly be true. The more of a currency there is, the less one unit of it is worth. For example, lets say there are a quadrillion dollars in existence; one dollar by itself isn't worth very much. However, if there were only a billion dollars, the dollar is worth a heck of a lot more. Same with leaves; the more leaves there are, the less each leaf by itself is worth. Every time someone plants a tree and waits for it to grow (err, that might take a while, but disregard that) the value of the currency drops, thus inflation.
We can solve that problem (and effectively revalue the leaf) simply by burning down all the trees.
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Re:Might I suggest an alternative currency (Score:4, Insightful)
You clearly have not read The Hitchhiker's Guide to the Galaxy series. (I believe it was Restaurant.) If you had, you would know that the early Earth colonists' solution to this particular inflationary dilemma was to burn down all the trees. Problem solved.
I suggest you bow your head and accept that you have been judged on your geekdom, and found lacking. You may recover some lost face by immediately purchasing or borrowing a copy of The Ultimate Hitchhiker's Guide [amazon.com].
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In fact the value of currency is psychological. If one dollar buys one candy bar, why should that change if there are more dollars? Nothing has really changed in terms of the candy bar's production costs. The only reason the price would go up is if the shopkeeper decides I'm going to gouge the buyer because he suddenly has more money. But if the shopkeeper already has enough money to get what he wants, why should he raise prices?
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Because there needs to be some inherent balance between the availability of money and the availability of things to buy with it.
If suddenly there were zillions of dollars lying about, candy bars sold for only $1 apiece would sell out everywhere, and there'd be a huge shortage of candy bars until someone had the bright idea to charge more for them -- enough more that they could handle the demand.
Re:Might I suggest an alternative currency (Score:5, Informative)
In fact the value of currency is psychological.
In fact it's not. Or more precisely, not only.
If one dollar buys one candy bar, why should that change if there are more dollars? Nothing has really changed in terms of the candy bar's production costs.
The price of an item is a function of its scarcity and of the effort required to create it. If everybody had lots of money, nobody would be willing to work to create more candy (why bother making candy for a buck a piece, when you can just shake the money tree in the backyard, and get more bucks with less effort?). So candy becomes a scarce resource, and everybody competes for the same limited amount of candy. The only way to get the sweet luxury is to pay more. The price of candy goes up, and will continue growing until either people give up on candy, or the price becomes high enough that making candy becomes profitable again.
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Re:Might I suggest an alternative currency (Score:5, Insightful)
The important point that you're missing is that currency behaves just like any other good. The shopkeeper's revenues must compete with all the other dollars in existence for the goods and services the shopkeeper requires (personal and business), just as those goods and services must in turn compete with all other goods and services for the higher-order goods (like raw resources and labor) required to produce them.
If the shopkeeper were to decide not to raise his prices despite the existence of more dollars in circulation, then he would receive the same revenues per candy bar sold and thus be limited to bidding for new ones at the same prices as he used to pay. However, other shopkeepers who did raise their prices can now outbid him, which means he won't be able to get enough new candy bars to replace his old stock; the same amount of dollars won't buy as many as it used to. If all the candy-bar retailers banded together and chose not to raise any of their prices then the same problem would still exist regarding the higher-order goods required to produce the candy bars in the first place. Some of these goods, such as labor, are common to all production, which means that all products compete with one another to some extent—and that injecting money anywhere will affect all prices eventually.
Essentially, in order to prevent a general rise in prices you would have to convince every single holder of dollars, including those who hold the newly-created ones, to act as though the supply hadn't changed. Good luck with that. :)
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Think about the root causes of inflation. Just because more money is available, why does that mean anyone HAS to raise prices? The only reason to raise prices is you want to create artificial scarcity. Inflation due to increased money supply is a choice, not a natural law.
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The sudden availability of money does not mean an instant increase in the production capabilities of the economy, but it will increase the consumption of the economy. In other words, there will be a supply/demand imbalance. Everyone will become very rich and be able to buy anything they want and so they will go on a shopping spree. Shops will start to sell out of goods and the factories will be unable to supply new inventory at a fast enough rate, so merchants will be forced to raise prices until they ca
Re:Might I suggest an alternative currency (Score:4, Interesting)
Furthermore, those who are first in possession of the new money have a huge advantage: the market has yet to be affected by it, so they can use it to purchase lots of goods at uninflated prices. By the time the new money gets to Joe Sixpack in the form of a necessary wage increase to keep up with inflation, the new equilibrium is all but settled and he ends up about where he was before.
Fiat money is a tool for the rich to get richer.
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Fiat money is a tool for the rich to get richer.
But we don't have "fiat" money, we have debt-based money (which is indeed a tool that enables concentration of wealth). The best explanation I've read involved money and anti-money: there is no $ without debt. Here's the quote:
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it is a natural law of economics. Everything except Imaginary Property has some hard limits built in. When you increase pool of money everybody is willing to pay more in nominal terms to be able to put the hands on desired goods which are not infinite in supply, thus prices are bid-up and new equilibrium is achieved thanks to the supply and demand mechanics. If you are not willing to bid, you will never buy anything with your watered down money. If you are a producer, you are killing your profitability and
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OK, fine. Nobody raises prices. Instantly all products sell out, since everybody has enough money to buy everything they need, everything they want, and everything that they feel like buying because its just lying there. Only there isn't enough stuff in the whole world to fill everybody's needs, wants, and whims. So people start fighting over the last few items. Someone offers to pay double, then someone offers to pay double that, etc.
On the subject of economics and money... (Score:4, Interesting)
a professional economist and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous debts accumulated in Australia, and our very low rate of inflation
Re:On the subject of economics and money... (Score:5, Informative)
Steve Keen knows his stuff. I highly recommend his blog to anyone interested in economics, even though I disagree with several of his conclusions and proposals.
He was recently able to give the full (long) version of his standard presentation in Michigan. Go watch it. http://www.debtdeflation.com/blogs/2010/11/15/why-credit-money-fails/ [debtdeflation.com]
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Have a point (Score:2)
no thanks (Score:5, Insightful)
So I won't be able to give $20 to a friend without: 1) being tracked; and 2) giving a cut to some payment processor like PayPal? I'd rather use cash.
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So I won't be able to give $20 to a friend without: 1) being tracked; and 2) giving a cut to some payment processor like PayPal? I'd rather use cash.
Hmm, maybe there's a way for the mint to be in charge of the digital cash. There is already a non-zero cost to making money. Perhaps that cost could be used to implement digital money without a middleman.
Re:no thanks (Score:5, Insightful)
So I won't be able to give $20 to a friend without: 1) being tracked; and 2) giving a cut to some payment processor like PayPal? I'd rather use cash.
But that's the whole reason for governments wanting to eliminate cash: it means every transaction will be taxed and no transaction will be possible without their permission.
Well, except that everyone will start using US dollars or whatever for their free market transactions.
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But that's the whole reason for governments wanting to eliminate cash: it means every transaction will be taxed
Actually, I meant to write 'tracked', but it's pretty much the same thing :).
Re:no thanks (Score:4, Insightful)
Or Euros because the currency in question is the Euro, and it's already printed and minted in Europe where this is taking place.
Re:no thanks (Score:4, Interesting)
History teaches us this is likely if only because the US dollar was the black market currency of choice in Eastern Europe during pretty much the entire Cold War. You could exchange your dollars with the Communist government at a rate tilted ridiculously in their favor, or you could ask your taxi driver if he wanted to buy dollars, which he did, and you'd get around 3-5 times the "official" government exchange rate. Dollars were always in demand because they were so much more stable than the constantly inflating local currency.
Re:no thanks (Score:5, Informative)
They might use a physical currency. They would not use dollars. The dollar was used historically because is stable, it has a wide international reach, and there wasn't any European currency that could compete with it on scale. Sure, you had British pounds and French francs and German marks, but the dollar was the big boy in town.
Nowadays, that's no longer true. The Euro is a completely viable alternative to the dollar on a broad international scale. It's even used as the official currency in countries outside of the EU: see, for instance, Kosovo. The physical Euro has some nice advantages for Estonians: you can drive to the country next door and actually spend themat any retailer, as opposed to trading them as a "black market" currency. And as the summary notes, it's already going to be the official currency of Estonia, even if not in physical form, which reduces barriers to depositing physical Euros into, say, a bank account. You don't even have to do a currency exchange!
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So what you basically want to say is that it is OK to break international law?
I'm not passing judgment. I'm describing the way the world works.
And this is not a "border change", this is making of a country that never existed in history.
That happens all the time too. That's the history of the world.
I really didn't expect from you guys to feed me some copypasta from Fox News.
What did I copy and paste from Fox News? The only thing I copied was a link to Wikipedia containing a factual list of countries that recognize Kosovo, including the United States and most of the European Union. Yes, plenty of countries don't recognize Kosovo. That's why it's a disputed territory, and certainly not the only one in the world.
Here's another Wikipedia link: Internation [wikipedia.org]
Not exactly (Score:2)
I would much prefer to think it would force the comeback of the barter system. Either that or local community currency.
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Barter is an option even when there is cash, it's been a form of trade before there was any kind of currency. The problem is, in order to be reasonably convenient, each party has to have something the other wants. If that's not true, then one of the parties is going to have to trade with other parties to get what the other party wants. That problem is a reason why currency was adopted in the first place, it made trade so much easier, since one side of the trade is always in something everybody wants becau
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Bartering is all well and good until you have to make change for 1.95 goats.
Re:no thanks (Score:4, Insightful)
Re:no thanks (Score:4, Insightful)
if this were done in the US for example, you'd probably have people starving to death because they have bad credit
Heard of debit cards? They're very common over here in Europe and go directly against your bank account. As long as you are using an online terminal, like pretty much every grocery store has, then the card will only work if you have money. The only people taking something on credit would be private transactions or backup solutions if the terminals are offline, everyone who regularly handles money today would get one if they don't already. What I don't like around here is that they're using the "by volume" argument to say removing cash is not a problem, which is ridiculous. It's no secret that I do groceries and pay for utilities and insurance and so on, but maybe I don't want that medical specialist or strip club or whatever on there even if they make up 1% of the volume. Same with my location, I'm often at home or at work so by duration I mostly don't care if everyone knows where I am. Again, it's the exceptions that matter.
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that is now legally an opt-in service from the bank. If I no longer have the money in my account it denies the transaction, and no fees or interest is charged.
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A somewhat correctable problem with debit cards is that there ARE some people who's credit is so terrible that they can't even get a checking account -- I'm not saying they don't deserve being frozen out of check writing, generally they do, but if you eliminate cash transactions the merely "unbanked" would become destitute.
A more pressing problem is that debit cards are offered by private companies to individuals on an at will basis -- a bank can cancel or decline your card, or forbid i
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A somewhat correctable problem with debit cards is that there ARE some people who's credit is so terrible that they can't even get a checking account -- I'm not saying they don't deserve being frozen out of check writing, generally they do, but if you eliminate cash transactions the merely "unbanked" would become destitute.
Just another symptom of the America's broken banking system. In sane countries, you can get a debit card that linked to your savings account.
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It allows the bank and Federal Reserve to better classify deposits for the purposes of maintaining reserves. For every dollar on deposit at a bank, they need to have some fraction readily available to repay withdrawals, and another fraction on deposit at the Fed.
By limiting withdrawals on a savings account, the reserve fractions can be lower, since statistically speaking, you're less likely to have single large redemptions from the entire account base at once. If I've got $5M in aggregate savings accounts f
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and can charge you essentially whatever it damn well pleases for the "service" of giving you the card, let alone for penalties you may incur.
What's more, apparently they do - to the point that anyone in the US who doesn't have a checking account has to pay a vast fortune to the banks to get a debit card which costs them nearly nothing to issue and run, and which has no risk of going overdrawn.
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You can buy things on Debit without any credit.
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However, with sufficiently poor credit, it becomes impossible to even open a checking account.
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So I won't be able to give $20 to a friend without: 1) being tracked; and 2) giving a cut to some payment processor like PayPal? I'd rather use cash.
Anonymous electronic payment exists, they would simply have to implement a solution that makes use of it.
Re:no thanks (Score:5, Interesting)
So I won't be able to give $20 to a friend without: 1) being tracked; ...
Yup; and this is exactly why it won't be implemented, not in Estonia, not in the US, not in any other country.
A more illustrative example would be: You want to give $20,000 to your favorite local politician, in exchange for "consideration" during part of the law-making process. This only works well if your "gift" can't be tracked and be made known to the voters (and to legal authorities).
The recent election in the US is a good example. Political gift-giving used to be mostly public information. But recently, our Supreme Court changed the rules, making it legal for anyone to give money to politicians and keep the source of the money a secret. So before this election, political contributions went up roughly an order of magnitude over what they had been in previous elections. Mostly to the Republicans, but the Democrats got a large increase, too.
This would be very difficult with an all-electronic money system. The political system relies on the non-tracability of most of the "gifts". So we can trust that the politicians who got elected won't pass laws that eliminate the money that put them in power.
All the recent news of financial systems being "hacked" and their information made available to the wrong people is all the proof our politicians need that electronic money can't be trusted to keep a secret. So they won't allow it to happen while they're in office.
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That's how I feel about stores and gas stations, not just friends. I don't like being tracked, and rarely use my debit card. Online purchases make it unavoidable and is really the only area where I accept it as a necessity.
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So I won't be able to give $20 to a friend without: 1) being tracked;
On a piece of paper, write "IOU $20". Sign it. Or do the same with GPG.
and 2) giving a cut to some payment processor like PayPal? I'd rather use cash.
Paypal won't take a cut of anything that small if you pay right.
But in general I tend to agree. Of course greenbacks will remain available for that kind of thing for quite a while, I think.
Re:no thanks (Score:5, Insightful)
Please don't use the broken banking system in the US as your reference.
I have no problem doing instant electronic bank transfer of 20 bucks into my friend's bank account at no extra cost to either of us. In fact, we often settle the our lunch bills this way.
Only in America's broken system would you run the risk of losing money by just giving people your account number.
Yes, it made it possible for the govt to find out these records. But you have to fear being taxed only because of America's broken income tax system. Other people in sane countries don't have that problem at all.
Re:no thanks (Score:4, Informative)
Only in America's broken system would you run the risk of losing money by just giving people your account number.
Or the UK [bbc.co.uk].
Without cash... (Score:5, Insightful)
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Economies can't work without thieves or corrupt politicians.
Or scarcity. It especially loves that, even if it's artificial.
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At the bottom, cash on your pocket grants some privacy... and security.
Your idea of security might change after you have been pickpocketed, or robbed, or just plain dropped your wallet a couple times.
Personally, I feel LESS secure when carry any significant amount of cash (ie large enough that would very much care if lost).
I pay for anything over ~20USD by credit card or electronic payment. If all the money I carry was stolen, I won't lose any sleep over it. So if some is to rob me, I would immediate hand over all my cash.
So I feel very secure in the fact that barring some hug
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Sounds great... (Score:5, Insightful)
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Hmm yeah, because stores never experience that and don't have backup solutions.
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I've been using EagleCash in Iraq in areas where cell transmissions are spotty at best. It's a smartcard, and it can do a transaction without immediate access to a server.
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Yes, just like the whole computer and internet thingie. You better stick to sending letters by courier instead of sending email, and avoid electric trains, avoid electric heating. Because all those things, you know, go down when the power is out.
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Swipe your card through her cleavage.
Re:And just person to person transactions (Score:4, Interesting)
Indeed - I stuck £40 in crisp used notes through a neighbour's door yesterday. I could have done an electronic bank transfer but she'd have panicked if I'd knocked on the door and asked for her bank account details.
I like using cash anyway, it gives me a tangible way to observe my general expenditure. If I used a card for everything I'd have less of an emotional link between spending money and having a lower bank balance.
Ironic (Score:3, Insightful)
This comes out at the same time as I have stopped using credit/debit cards. I've started paying for everything with cash ( minus my web purchases... ). The government's ability to track non-cash transactions has improved to the point where I would rather have my privacy and take my chances with the possibility of theft.
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"... take my chances with the possibility of theft."
Compare the chance of a mugging and the average amount of cash in your wallet you would lose
Compare the chance of a mugging and the average amount the crook could charge to your card(s) before you can report it. Maybe you will be able to halt the credit card theft at the regulatory limit of $50, but with debit cards you might not be so lucky.
Now compare the chance of online fraud ("identity theft") or skimmers at an ATM (or other non-intrusive theft) and
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I think carrying lots of cash is less risky than using debit or credit cards for transactions.
It seems like you lumped credit and debit cards together by the end of your argument, after admitting that you're probably not liable for more than $50 in fraudulent charges on a credit card. If you go with a decent credit card agreement, the customer's often not liable for fraudulent purchases at all. Even assuming the $50 limit you provided, how could you argue that it's better to carry a lot of cash (maximum liability: all you have) than to just carry a credit card (maximum liability: $50)?
"ATM cards" vs. "debit cards" in USA (Score:3, Informative)
Where I come from debit cards are useless without the PIN.
In the United States, this is true of an "ATM card", which carries only the ATM network logo (Cirrus or PLUS) and has no embossed number on the front. These can be used only for PIN transactions. The term "debit card" is more commonly used to refer to a debit card that carries both the ATM network logo and a MasterCard or Visa logo and an embossed number. These can be used for PIN transactions or for signature transactions. They became popular because when they were introduced, few merchants took ATM cards.
You all laugh... (Score:2)
...but isn't this the way things are heading, anyway? And have been for sone time.
How many transactions have you done online this year so far? Our even this month? How about all those card payments you make? Everything from your shopping to your lunch can be paid by card and the rise of NFC being built into every phone will only make this more popular. Its probably possible to live without ever having to take out any physical cash at all. If they come up with a way to let you easily transfer cash to another
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I will continue to laugh at stupid people who use their credit cards while travelling to other countries that use a different currency. You are throwing away money because not only do you pay the usual interest but you also pay a "per transaction" currency exchange fee and they rip you off on the conversion rate.
Whenever I travel to another country, I take cash in the local currency of that country before I leave to ensure that I can get the best rate and it also means that I am not spending money that I do
What about vending and video games / pinball games (Score:2)
What about vending and video games / pinball games.
Few vending machines are set up for credit cards and the operators have to pay the CC fees.
For video games / pinball games other then the golden tee live games I not see any one take a credit card.
What about tipping peopel like bellhops / skycaps (Score:2)
What about tipping people like bellhops / skycaps and others who people tip who they don't by stuff from like you would with a bartender / restaurant server.
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Re:What about tipping peopel like bellhops / skyca (Score:5, Informative)
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I've got to agree with the Fundies on this.... (Score:4, Interesting)
There's much to be said for streamlining financial transactions, but there are limits to what we should allow, for reasons others have stated. There is simply too much opportunity for mischief in an economy where there can be this sort of control.
I'm surprised no one mentioned it, perhaps the /. readership is too young and secular to remember the concerns of Fundies from the 60's, 70's, and 80's, but I will give the relevant quote from the Book of Revelations, chapter 13, verses 16 & 17:
"16 It also forced all people, great and small, rich and poor, free and slave, to receive a mark on their right hands or on their foreheads, 17 so that they could not buy or sell unless they had the mark, which is the name of the beast or the number of its name."
(The number is, of course, 666, or in a few ancient texts 660.)
Regardless of whether one believes ancient prophecies, I think those Fundies had one thing right: Don't trust ANYONE - not even the "Majority" - to have that sort of control over humanity.
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Better yet: stop using debt as money (Score:4, Insightful)
Few people realize that we use debt as money in our monetary system. All those dollar bills and Euro notes? Those are actually IOUs that have to be repaid with interest to central banks. All those dollars in your bank account? They too are just debt markers that have to be repaid with interest. The problem is that in order to repay the interest, new money has to be created; but the only source of new money is new debt, with more interest, that requires more money with more interest ad infinitum.
The net result is that: 1) if all debts in society were repaid there would be no money and commerce would sieze up; 2) all debts can never be repaid because the principle + interest always exceeds the money supply; 3) the amount of debt is always increasing until there is a crash.
Everyone (except bankers) would be better off if we used debt-free money issued by your government, rather than debt issued from privately controlled central banks.
http://www.youtube.com/watch?v=vVkFb26u9g8
Re:Better yet: stop using debt as money (Score:4, Informative)
Re:Better yet: stop using debt as money (Score:4, Insightful)
Wait, what? Why was this marked interesting? That's not how money actually works. Ideally, you borrow from the future (debt) so that your value growth is increased today. Eventually the additional growth increase produces enough value to offset the amount of value you took into the past. A very simple example: A farmer in a poor country spends a day walking to a market to sell his goods. The trip ruins 40% of his goods (say milk). Now he takes a small loan, buys a cart, reduces his trip, and thus only loses 10% of his goods to waste. Say he makes 20% more profit due to demand. That cart increased his effciency enough to pay for itself and then some.
Always increasing debt is when you borrow w/o enough of a increased value growth. You keep hoping that your continued borrowing will provide enough additional growth today to offset the already there debt and this one too. Crashes only happen when there is no one left to believe in your investment. Also, unlike European and American economies, some cultures such as middle eastern, Indian, and the Japanese do belive in over saving. The opposite problem... little investment is like lending to the future, but results in little growth that means more and more inefficiency... stagnation.
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Your value may grow, but money is not a measure of value (it's an odd concept, I know). It's really lubrication that allows you to realize value. So in your example, with the extra money, the farmer can realize value and we get growth. The money supply *does* increase, but not because we increased value. It increases because we increased debt. Even if the farmer doesn't increase his efficiency, we will still increase the money supply because money is created when we have debt. Someone will have more m
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"Debt free money issued by your government" - what? :) What a laugh.
Gov't is the FIRST DEBTOR. What are you smoking - 'debt free government'?
OMG, what a mind job.
Everybody would be better off if the gov't let go of economy altogether and let the people decide what value is, what money is, forget about central planning - central planning is the reason that there are crashes.
The real money cannot be printed by governments to hide their true spending and debt, the real money will not allow somebody to inflat
Euros will still circulate (Score:2)
Whatever is quicker and mor efficient, will win (Score:3, Informative)
I live in central Europe, and the trend to here is moving towards always paying with your EC bank card. A EC card is basically debit and ATM card, and this is quite common for purchases over 20€. However, it takes longer at the supermarket than paying with cash, because they print out a receipt that you have to sign. Even typing in a PIN takes longer than if you pay in cash. The cashier chicks at my supermarket have built-in abacuses in their heads. And when they grab into the cash registers for change, I have noticed that do not even look at the coins . . . they know from feeling the size how much is right.
A lot of folks like to pay with cards at the supermarket, because it gives you time to bag your groceries. No, there are no teen-aged "bag boys" where I live, and supermarkets here try to rudely toss you out, as soon as your bill has been paid. It's always a hoot and a half when I visit the USA with my girlfriend: she always jumps to start bagging the groceries, while some teenage guy gives her a look like, "Are you trying to steal my job?" Aldi is the worst offender: after your purchases get scanned, they are pushed to a packing place that is smaller than an average dinner plate. If you don't pack fast enough, they push your stuff onto the floor. If their prices were not so cheap, no one shop there, unless they are masochists who get sexual pleasure from being abused by assholes.
So anyway, the last time I visited ThePolygamousRanchSister in scenic New Jersey, I asked her where an ATM was. She told me that she never used cash any more. And my observations were that everyone, down to fast food joints, just swiped, and that was quicker than using cash. As soon as swiping a card without a print out and signature or PIN number is possible here, cash will be out.
Aw, the poor cash counterfeiters . . . this will wreck their business model.
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Aldi is the worst offender: after your purchases get scanned, they are pushed to a packing place that is smaller than an average dinner plate. If you don't pack fast enough, they push your stuff onto the floor.
The way that the system is meant to work (at least in the several Aldi(i|s ?) I use regularly ; Lidls too) is that you unload your cart onto the conveyor, then you go past the cashier (who notes anything in the trolley and challenges you on it ; stop shoplifting!) and then s|he starts to scan your goods, placing them on the "dinner plate" area. You take each scanned item from the "dinner plate" area and deposit them back into the empty trolley. You then pay, and take the trolley away to pack your goods into
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illegal goods, illegal help, kickbacks, etc. It sounds like this economics professor thinks the answer is, they can't, and therefore all this crime and shady stuff will go away.
That's where the black market forms and uses:
1.Another country's currency.
2. Barter