Towards a Cashless Society

12 December 2016

It is clear that banks and, well, banks, are pushing the cashless society agenda. I for one will gladly submit to going cashless. That is if we are talking about doing away with our fiat paper currency, the Federal Reserve note. How about we replace those notes, not with digital currency (hell no!), but with something tangible, say silver and gold? I wonder what kind of effect that would have on our economy?! It would stop the Federal Reserve (not federal, nor with any “reserves”) from dictating our monetary policy any further, and let the markets naturally control themselves once again. That would be a start.

This past week saw the latest Federal Reserve meeting.  I went online shortly after to find out what they said, what their latest move would be to shore up our failing economic system. More than anything else, one sentence in the New York Times online article entitled “A January Pause, but Fed Affirms Plan for Gradual Rate Increases“, by Benyamin Applebaum,  struck me. The telling sentence reads:

“Public expectations about future inflation also are eroding, a problem because those expectations help to shape reality.”

If there was ever any question about how media input shapes people’s notions about the economy, and how those notions are counted on to actually create the outcome, this sentence should help dispel those doubts.

The full paragraph reads:

“Public expectations about future inflation also are eroding, a problem because those expectations help to shape reality. People who expect prices to rise more quickly may press for higher wages, which can lead to higher prices as businesses compensate for payroll increases. That pressure may now be flowing in the opposite direction. A regular consumer survey conducted by the Federal Reserve Bank of New York found expectations of inflation in three years’ time had declined to 2.8 percent from 3.3 percent over the last two years.”

See the full New York Times article here.