E Will The Russians Save Us From The Cashless Society?

Sometimes fact is stranger than fiction. It has been reported that the Russians have been observing the cable lines in key areas of the world’s oceans. The potential damage that Russia could cause to the United States is not to be taken lightly. Certainly we would all suffer possible financial loss from the destruction, even if temporary, to the digital financial system upon which millions of financial transactions are made.

Since only 200 oceanic lines carry 99 percent of all data and internet traffic, the disruption to those lines could be catastrophic. Trillions of dollars in transactions could be undone.

However, there is a silver lining to this dark cloud. This Russian threat could slow down or even derail the coming Cashless Society! Can you imagine not having any cash when the internet and data systems of the world are brought down? Stealing or starvation would likely be your only choices. Some rural folks could barter, I suppose, but city people? They would be at a distinct disadvantage.

Politicians will be leaned on by bankers and economists who see no other answer to the declining interest rate scenario than to break through the zero lower bound allowing negative interest rates to be charged on customers’ bank accounts. Monetary stimulation only works when interest rates stimulate the economy. Otherwise, the central banks are forced to resume QE, which drives up assets and further diminishes the middle classes.

And monetary stimulation will only work in a negative interest rate environment with the implementation of a cashless society. But that society has perils to us all. Even wealthy people traveling could be in a bind without cash.

We can see how strong the desire is for a cashless society by the desperate cries of those economists and bankers who see no other way out. These will become the most desperate people in the next downturn. Americans need to understand this in order to understand that risk off is death to the bankers. Their very lives revolve around risk on and speculation. They are the only people making real money, and if they find themselves at the mercy of permanent risk off, then they will forcefully push for a cashless society.