The History and Future of the War on Cash (Audio)

Dr. Joseph Salerno, Academic Vice President of the Mises Institute, recently gave a speech about the ever-growing “war on cash.” For decades, governments around the world have been expanding their efforts to prevent or discourage citizens from using cash. Salerno reviewed the history of this trend from the Bank Secrecy Act in 1970 to modern-day laws and regulations throughout Europe and individual states in America.

Highlights from the Salerno’s speech:

“[It was recently] announced that Greece was doing a number of things, and one of the things that didn’t get much attention at all, was that it was imposing a surcharge for all cash withdrawals from bank accounts to deter citizens from clearing out their accounts. In fact [Greek] citizens have withdrawn about 28 billion in euros in cash from the fractional reserve banks in Greece in the past few months. This so-called “cash point charge” was put in place.

“What is that? I submit to you that it’s just another volley… in the war against cash… Now the Greeks will have to pay 1 euro per 1,000 euros that they withdraw, which is 1/10th of a percent. Doesn’t seem very big. But the principle is extremely big.

“What they are in effect doing is that they will now allow government to actually break the exchange rate between a dollar of bank deposits and a dollar of currency… If you break this exchange rate between bank deposits and currency, you get the following happening… This means it will be more expensive to buy an item with cash than with bank deposits…

“The actual aim of the flood of laws restricting or even prohibiting the use of cash is to force the public to make payments through the financial system. This enables governments to expand their ability to spy on and keep track of their citizens’ most private financial dealings in order to milk their citizens of every last dollar of tax payments that they claim are due.

“Other reasons for suppressing cash are, (1) to prop-up the unstable fractional reserve banking system, which is in a state of collapse all over the world, and [2] to give central banks the power to impose negative nominal interest rates. That is to make you spend money by subtracting money in your bank account for every day you leave it in the bank account and don’t spend it…

“Chase also has recently joined the war on cash. It’s the largest bank in the US… and according to Forbes, it’s the world’s third largest public company… As of March, Chase began restricting the use of cash in selected markets. The new policy restricts borrowers from using cash to make payments on credit cards, mortgages, equity lines, and auto loans. Chase even goes so far as to prohibit the storage of cash in its safe deposit boxes…”

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