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Often wondered how Legal Tender can be refused... but I imagine this only applies to government debt.
I've never used an ATM or anything like a Pay Pal transaction.
Having cancelled checks has saved me many times over the years... things like proving I returned a Security Deposit or paid for work done.
Plastic is convenient but where it counts I prefer checks.
Tomorrow I will help out at a Christmas Tree farm like I have in the past... every year the amount of Credit/Debit use increases... I think it is about 85%... 10% cash and 5% checks...
I use a debit card to buy gas so I don't have to walk in to the cashier. I use my bank's bill pay system for paying bills. EVERYTHING else I buy, I pay cash. Big business and the government don't need to know what I'm doing. And if you don't think they track all this stuff, you're naive.
Big business and the government don't need to know what I'm doing. And if you don't think they track all this stuff, you're naive.
I will take it as a given that you don't want the government screwing with your cash supply in any way
But hypothetically if you had to make a choice, which decision would you find worse?
(A) The British demonetizing the 50£ banknote, leaving only the 5£,10£, and 20£ in circulation, or
(B) South Korea demonetizing their four coins, worth roughly 1 cent, 5 cent, 10 cent, and 45 cent coin, and leaving only their four banknotes.
REMAINING BANKNOTES WOULD BE FOR UK and South Korea:
5 GBP =USD$6.65
10 GBP =USD$13.31
20 GBP =USD$26.61
50 GBP =USD$66.50 REMOVED FROM CIRCULATION
COINS REMOVED FROM CIRCULATION
10 KRW = USD$0.009 ~ a penny
50 KRW = USD$0.046 ~ a nickel
100 KRW = USD$0.09 ~ a dime
500 KRW =USD$0.46 ~ not quite two quarters
The British decision which is still being debated would make large cash transactions nearly impossible without briefcases full of banknotes. A cash transaction of £10,000 would require over a pound of cash (500 banknotes). It would be promoted as a way to make theft, fencing, and income tax avoidance more difficult.
The equivalent USA decision would be to stop producing the $100 banknote. As policy the USA does not demonetize banknotes, but if no new ones are produced, and commercial banks send in all $100 banknotes in their possession to be destroyed, eventually the supply will greatly diminish. Existing $500 and $1000, $5000, and $10,000 banknotes are still legal tender, but there are so few left in circulation that they have all been turned into collectibles.
The Korean decision would force people to go to electronic transactions for every day purchases or they will be forced to give up receiving change below 92 cents. But presumably people are not going to pay part of their bill in banknotes, and use an electronic means to pay the rest. It is being promoted as an efficiency measure, but in reality it may force nearly 100% of the population to adopt an electronic payment system making it easier to remove all cash in the future.
Since the USA does not demonetize existing money, the equivalent decision would be to shut down the mint and pass a law that says that shopkeepers are not required to keep coins for dispersal to customers. The coins are in circulation so the government can't prevent people from using them, but some shops will stop carrying them if not required to do so.
Last edited by PacoMartin; 11-23-2017 at 04:12 PM..
I honestly can't come up with many scenarios where lack bills in denominations > $100 slows down and/or increases cost of doing business. B2B is pretty much cashless, and customer to business in either in smaller amounts or cashless as well with higher transactions being far more likely to be cashless. The only thing that would be easier would be brick and mortar moving cash to the bank, but obviously that cash is coming in much smaller denominations so that doesn't really make sense either.
How exactly does not having larger bills slow down or increase costs?
Paying more than, say, $500 rent in cash becomes unwieldy when the Benjamin is taken out of the mix. Carrying that amount in $20s can be downright unsightly, like wearing a ROB ME sign.
In Sweden you might have a small kiosk that sells frozen yogurt. Because so many people don't carry cash, you can run a profitable business that will not accept cash. You have no cash register to guard and you don't need someone to make change. When you are done for the day you simply have to lock up your yogurt and go home.
Small banknotes have to be guarded against theft. They have to be counted and recounted. They have to be deposited in the bank. Those are all labor intensive activities that increase costs.
In the USA at stores or gas stations that are open at night it is very common to not accept banknotes larger than $20. When enough cash accumulates it is stuffed into a vault that the employee cannot break into. This limits the cash available to the clerk, which protects the business against thieves. The business owner would also argue that it protects the clerk as well, because potential thieves know that there is limited cash in the register.. An armored truck is employed to empty the vaults
That business would have much lower costs if it didn't accept cash in any denomination as payment. However, in the USA you would have a lot less revenue because so many people use cash. You might also have angry customers.
If Korea makes coins illegal than the smallest banknote is worth ~ US$0.80. If you want to pay in cash, then you have to give up receiving change smaller than ~ US$0.80. While that is tolerable once in a while, most people will adopt electronic payment techniques rather than give up change with every transaction.
But once electronic transactions become normal, there will be very little use for the three small denomination banknotes worth ~ US$0.80 ~ US$4.00 ~ US$8.00 . The only banknote that will remain in widespread use will be the largest worth ~ US$40.00
Stores may stop taking cash altogether and the banknotes will only be used as a "store of value" or for person to person transactions.
I must have missed the part where any of this supports the need for larger banknotes.
Many of us have all but stopped using currency.....and checks. I typically go to the bank or an ATM to get cash maybe once every two or three months and then the amount is very small. I write maybe two checks a year. When I go to a store almost all purchases, even those under $10, are by credit card. Among other reasons, this saves a lot of nuisance in carrying coins. More and more my purchases are not even made in stores. I buy almost all my clothing, sporting goods, cameras gear, printing/framing supplies, and household purchases through the internet. My brick and mortar purchases are primarily gas, groceries and a few hardware/home center purchases.
I gave up coins a decade ago and rarely use cash. I tried to use the $100 bill that has been in my pocket since last ski season for lunch today, since the CC reader was down. But they didn't have correct change. They found a working reader in another aisle.
I must have missed the part where any of this supports the need for larger banknotes.
I am not aware that I said we need larger banknotes. I simply said there are two differing approaches to reducing cash in circulation.
Hypothetically if you had to make a choice, which decision would you find worse?
(A) The British demonetizing the 50£ banknote, leaving only the 5£,10£, and 20£ in circulation, or
(B) South Korea demonetizing their four coins, worth roughly 1 cent, 5 cent, 10 cent, and 45 cent coin, and leaving only their four banknotes.
On this same forum someone posted a vote for or against banknotes. It is a silly vote because even in Sweden most people are not in favor of completely eliminating votes.
So all I am asking you is if you were forced to choose to methods of reducing cash, which would you choose? I understand that most people don't want either to happen, but UK and SK are not putting their idea up for vote. Sometimes decisions are made for us.
Last edited by PacoMartin; 11-23-2017 at 07:18 PM..
In the U.S., there will be a push to eliminate the $100 bill. And probably the $50 as well from printed production. They government would like us to move to a cashless society. Easier to track.
In the U.S., there will be a push to eliminate the $100 bill. And probably the $50 as well from printed production. They government would like us to move to a cashless society. Easier to track.
So then would consider decision (a) to be worse than (b)
(A) The British demonetizing the 50£ banknote, leaving only the 5£,10£, and 20£ in circulation, or
(B) South Korea demonetizing their four coins, worth roughly 1 cent, 5 cent, 10 cent, and 45 cent coin, and leaving only their four banknotes.
BTW the FED has produced nearly a trillion dollars in the new color series $100 banknote. The older green $100 banknotes are still valid of which there was over $800 billion of the 2006 and 2006A series alone.
$144,000,000,000 2009 color series $100
$726,720,000,000 2009A color series $100
$86,080,000,000 2013 color series $100 as of Sept 2017
As the c-note is very profitable for the US government, they are unlikely to put an upper limit on their production, let alone eliminate it.
So then would consider decision (a) to be worse than (b)
(A) The British demonetizing the 50£ banknote, leaving only the 5£,10£, and 20£ in circulation, or
(B) South Korea demonetizing their four coins, worth roughly 1 cent, 5 cent, 10 cent, and 45 cent coin, and leaving only their four banknotes.
BTW the FED has produced nearly a trillion dollars in the new color series $100 banknote. The older green $100 banknotes are still valid of which there was over $800 billion of the 2006 and 2006A series alone.
$144,000,000,000 2009 color series $100
$726,720,000,000 2009A color series $100
$86,080,000,000 2013 color series $100 as of Sept 2017
As the c-note is very profitable for the US government, they are unlikely to put an upper limit on their production, let alone eliminate it.
The Federal Gov't does not make profit on printing money. It is an expense. Money when created is digital. It becomes analog if you go through the process of actually printing the currency, which takes time, work and money.
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