When the economy goes “cashless”:
As I understand it, 100% of worker’s pay will become “deposits”, “deposits” that the banks will steal a portion of (fees?), so to limit the “fees”, the workers (“involuntary depositors” to banks) will stop making “voluntary deposits” cold since they won’t have any “money” to make them with, leaving the banks with NO (that’s zero) working capital for loans of all kinds – business loans, inventory loans, and etc. except what they’ve stolen from the workers and businesses.
The main goal of the “new economy” will be to avoid dealing with the banks or with “money” at all. Some think that the money will be held captive by banks, who will be free to loot at will. But that probably won’t happen. When someone “sells” something to someone else, they will probably not take credit transfers or checks since that would route the transaction results through the banks, and the sale amount would be reduced by a bank fee, (perpetual skimming at every level on every transaction) So when someone sells something, they will demand a form of payment that is NOT “money”.
The construction industry will crash and burn because the only “money” that will remain in banks over a few hours from “deposits” will be the amounts that will need to pay for “customer’s spending” (the use of bank credit to purchase real goods, thus removing customer’s “money” from the bank) So after a “customer’s” pay is spent, there will be no “surplus” deposits to lend out… (except the phantom/imaginary money created by the “magic” of Fractional Reserve money creation.) If the depositors spend every dime they can, with as close to zero left on deposit as they can get, this will amount to the banks literally creating money out of nothing, and will lead to devaluation of the “money” at a “hyper-sonic rate.” ie it will amount to the same thing as the Fed creating “money” out of nothing, which they already do, – and the value of that “money” will BE nothing, as it already is.
ie It will lead to rapid and total destruction of the economy.
And the above (and other stuff) will happen because just like hyperinflation, workers will be immediately converting their worthless bank deposits (formerly called “wages” or “money”) to real property. I can see people in effect becoming “Toaster Kings” – buying stuff that they can not actually use but can easily trade for other stuff. In Wiemar the idea was to get the hyper-inflated cash from your pay and spend it as quickly as possible, in effect getting rid of the “cash” before it lost its value, then trading the proceeds for other goods and services.
This activity has the immediate effect of trading worthless “bank money” (amounts on deposit) for something with real value – ie the people will create their OWN definitions of cash, and will “spend” it at leisure without the banks stealing it or being able to get their hands on it.
In a cashless society, where your entire pay will be deposited into banks, the banks will steal as much as they can before you get a chance to spend it. If you leave your pay, or part of your pay in the bank, sooner or later the bank will take it, so the idea will be to get as much of your pay out of the bank’s clutches as soon as possible. Thus the bank only gets one shot at stealing it before you’ve “spent it”, ie converting it to tangible/trade-able commodities.
Of course, the banks will eventually attempt to limit spending by their “customers” so the banks can control your “money.” But that will lead to resentment and possibly violence as the money the workers worked for will be totally controlled by the banks and not be available to the workers, thus making them literal slaves. So why are the workers working? To provide the banks with money that the workers can’t spend? Uh huh… we all know where that will lead. Why work if you can’t earn money and spend it?
End result? Total destruction of the economy.
“Cashless economy”? Wiemar/hyper-inflation? Absolutely zero difference in effect.
Read “When Money Dies” by Fergusson, and think of the effects of a cashless/money-less society.