Are We Heading Towards a Cashless Society?
I usually know what is occurring because of my responsibilities as a financial advisor, writer, and radio host. This story caught me off guard. I went to the gas station to put air in my tire. I went inside to see about getting quarters. I was told that they don't deal with cash or coins because of the coin shortage. What coin shortage I asked? Then she pointed to a sign declaring the lack of coins. My first reaction was shock because I didn't know. I follow a lot of news feeds and have heard nothing. I did a little research, and sure enough, there is a shortage of coins. My mind started racing as I went back to contemplating how life would be different as a result of this pandemic. Then the thought came to my mind....is this a final shift towards a cashless society?
No, I am not going to go into the conspiracy theories of the new world order, the intentional destruction of the middle class, the destruction of the dollar, so to usher in a new dollar currency, etc. I am just going to point out how easy it would be for this to happen. First, let's start with the why. Why is there a coin shortage?
Federal Reserve Chair Powell offered his two cents (sorry couldn't resist):
He told the House Financial Services Committee on June 17 that the coin shortage has resulted from the "partial closure of the economy."
"With the partial closure of the economy, the flow of funds through the economy has stopped," he said.
That is the why? No, that is the most ridiculous answer ever and makes no sense. What happened to the supply of coins? Are people hoarding coins? No, I doubt it. How did the amount of coins all of a sudden become in short supply? Maybe the government is intentionally limiting the quantity of coins for a reason.
I also discovered that banks have been shutting down ATMs slowly and quietly through the years. Whether you like it or not, it just might be forced to change. If the majority of retail stops dealing in cash as many have done because of the pandemic, you wouldn't have any choice. The reality is that we are already almost a cashless society. Guess what percentage of transactions are done in cash?
Only 1/3rd of transactions are transacted in cash. We are 2/3rds of the way there. The lower-income population makes up a good percentage of those cash transactions and would be directly affected the most. If it is done as a means to take advantage of the advancements in technology, then I am all for it. However, it could also be intended to be more of a power grab by the government - which would not shock anyone.
As former Obama White House Chief of Staff Rahm Emanuel once famously said:
"You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before."
They certainly are not wasting opportunities.