War On Cash Escalates: Australia Proposes Ban On $100 Bill; No Cash Within 10 Years?
Michael Shedlock
Global financial repression has picked up steam.
Australian citizens are likely the next victim.
AU News reports Government Floats $100 Note Removal.
Why?SAY goodbye to the $100 note.
Australia looks set to follow in the footsteps of Venezuela and India by abolishing the country’s highest-denomination banknote in a bid to crack down on the “black economy”.
Speaking to ABC radio on Wednesday, Revenue and Financial Services Minister Kelly O’Dwyer flagged a review of the $100 note and cash payments over certain limits as the government looks to recoup billions in unpaid tax.
“The whole point of this crackdown on the black economy is to make sure we close down any potential loopholes,” she said. Despite the broad use of electronic forms of payment, Ms O’Dwyer warned there are three times as many $100 notes in circulation than $5 notes.
“It does beg the question, ‘Why?’” she said.
There are currently 300 million $100 notes in circulation, and 92 per cent of all currency by value is in $50 and $100 notes.
A report by UBS recommended Australia scrap the $100 note. According to UBS, benefits may include “reduced crime (difficult to monetise), increased tax revenue (fewer cash transactions) and reduced welfare fraud (claiming welfare while earning or hoarding cash)”.
“From the banks’ perspective there would likely be a spike in deposits — if all the $100 notes were deposited into banks (ignoring hoarded $50 notes), household deposits would rise around four per cent,” the report said.
Financial Services Minister Kelly O’Dwyer notes there are currently 300 million $100 notes in circulation, and 92 per cent of all currency by value is in $50 and $100 notes.
“It does beg the question, ‘Why?’” she asked.
It would behoove O’Dwyer to think. People can have 100 pennies in their pocket (each of which is nearly worthless) or they can hold a dollar.
Similarly, people can hold a stack of ten $10 notes in their wallet or they can hold a $100 note.
Mathematically it makes perfect sense that 92 per cent of all currency by value is in $50 and $100 notes.
What the hell does $1 buy these days? Is someone going to carry a wad of fifty $1 notes to go to a movie and buy popcorn?
No Cash Within 10 Years?
Rest assured this will not stop with $100 notes. There will no cash within ten years.
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But as Bloomberg reports, try as everyone may, cash registers are still bursting with paper bills and metal coins. Cash is alive and well, according to a new study of the spending habits of more than 18,000 people in seven countries.
The bottom line, however, is that consumers in all seven countries use cash more often than they use any other payment method. Cash is least popular in the U.S., where it’s used for 46 percent of all transactions, vs. 26 percent for debit cards and 19 percent for credit cards.“Many have predicted and espoused the view that cash is increasingly disappearing as a payment instrument,” the authors write. “However, to paraphrase Mark Twain, we would say that the reports of the death of cash have been greatly exaggerated.”
The value of dollars and euros in circulation has doubled since 2005, to $1.48 trillion and €1.1 trillion, respectively. Some of that growth can be explained by demand for these currencies in foreign countries, but there’s also plenty of evidence that Europeans and Americans are still carrying around wads of cash.
The new research crunches and compares data on payment choices in Australia, Austria, Canada, France, Germany, the Netherlands, and the U.S. The study shows notable differences among these countries: Germans and Austrians carry around and use the most cash; the Dutch love debit cards; paper checks are still relatively common in France and the U.S.
