Friday, October 14, 2011

Banning Cash

Another sign that the bankers are desperate for a totally controlled digital fiat economy.

Cash Transactions Banned by Louisiana
Government Takes Private Property Without Due Process

By: Thad D. Ackel, Jr. Esq.

This summer, the State Legislature and Governor of Louisiana passed a law that bans individuals and businesses from transacting in cash if they are considered a “secondhand dealer”. House Bill 195 of the 2011 Regular Session (Act 389) broadly defines a secondhand dealer to include “… Anyone, other than a non-profit entity, who buys, sells, trades in or otherwise acquires or disposes of junk or used or secondhand property more frequently than once per month from any other person, other than a non-profit entity, shall be deemed as being in the business of a secondhand dealer. ” The law then states that “A secondhand dealer shall not enter into any cash transactions in payment for the purchase of junk or used or secondhand property. Payment shall be made in the form of check, electronic transfers, or money order issued to the seller of the junk or used or secondhand property…” The broad scope of this definition can essentially encompass everyone; from your local flea market vendors and buyers to a housewife purchasing goods on ebay or craigslist, to a group of guys trading baseball cards, they could all be considered secondhand dealers. Lawmakers in Louisiana have effectively banned its citizens from freely using United States legal tender.

The law goes further to require secondhand dealers to turn over a valuable business asset, namely, their business’ proprietary client information. For every transaction a secondhand dealer must obtain the seller’s personal information such as their name, address, driver’s license number and the license plate number of the vehicle in which the goods were delivered. They must also make a detailed description of the item(s) purchased and submit this with the personal identification information of every transaction to the local policing authorities through electronic daily reports. If a seller cannot or refuses to produce to the secondhand dealer any of the required forms of identification, the secondhand dealer is prohibited from completing the transaction.

This legislation amounts to a public taking of private property without due process or compensation. Regardless of whether or not the transaction information is connected with, or law enforcement is investigating a crime, individuals and businesses are forced to report routine business activity to the police. Can law enforcement not accomplish its goal of identifying potential thieves and locating stolen items in a far less intrusive manner? And of course, there are already laws that prohibit stealing, buying or selling stolen goods, laws that require businesses to account for transactions and laws that penalize individuals and businesses that transact in stolen property. Why does the Louisiana State Legislature need to enact more laws infringing on personal privacy, liberties and freedom?

Motivating the introduction of this legislation was an increase in criminal activity, necessitating law enforcement to develop additional tools in tracking potential criminals. Thefts of copper and other precious metals have risen recently with higher commodity prices and mounting pressures from the economic downturn. The added restrictions under this recent legislation have come about under the pretense of cracking down on crime and helping the government take care of you, all at the cost of your individual privacy, economic, civil liberty and freedom.


Is a cashless society on the cards?
Steve Perry, executive vice president of Visa Europe, says cash is expensive - a cost on society - and should be replaced by a cashless society.

Steve Perry, executive vice president of Visa Europe, has a different take on the folding stuff packed in our wallets that most of us take for granted. "Cash is expensive," he says. "We need to be using it less."

Expensive? Vintage wines, maybe. Designer clothes, yes. Modern art, almost certainly. But cash?

"Why do you think supermarkets introduced cashback?" Perry asks rhetorically.

He has me stumped there. I tell him I always thought of it as a service for overdrawn students to drive a few more sales through the tills.

"No," he responds politely. "It's because they want cash out of the system so there is less to manage. Processing a transaction on a card can be cheaper than handling cash."

Perry is a leading cheerleader for the cashless society. It's hardly a surprising role, but its an argument he is finding increasingly easy to make. Last month, for example, the Payments Council announced to anguished outrage that in 2018 the cheque would be dead.

"There are many more efficient ways of making payments than by paper in the 21st century, and the time is ripe for the economy as a whole to reap the benefits of its replacement," Paul Smee, chief executive of the Payments Council, said.

Perry extends the same argument to cash. Notes and coins are never going to be fully replaced, he accepts. Currency has, after all, been around in some form or another since 3,000BC. But now that we're in the electronic age, payments could do with a little catching up, he reckons.

Visa has recently published an extensive report on the cost of cash to society. Citing numerous independent papers by consultants and national governments, the payments company constructs a compelling case.

"The European Commission has calculated that the total cost to society of all payment methods including cash, cheques and payment cards equates to 2pc-3pc of GDP," the report states. "To put this figure into context, it should be remembered that the entire EU agricultural sector equates to 2.1pc of GDP, which means we spend more on payment than we produce on food."

The EC estimates that cash accounts for more than two-thirds of the total cost. McKinsey, the consultants, have estimated that "society spends about €200 (£180) a year per person to cover the cost of cash" and the "real" cost of cash to a retailer is 1.3pc of the purchase price – no less than the transaction fee on a card. The Dutch central bank has published a similar study, estimating the annual cost of cash at €300 per family.

Because cards are less risky (the associated cost is estimated at 0.02pc-0.1pc per transaction on cards compared with 0.1pc-0.2pc with cash) and encourage spending, they are more efficient and better value, Visa argues. Furthermore, card transaction fees are expected to fall, with some countries in Europe such as Denmark already offering free debit card services to retailers.

In the UK, Perry estimates, £1 in every £2.50 is spent on cards. He hopes to see the ratio reversed, with £2 in every £3 on cards by 2015. Of course, that would mean more business for Visa but, he claims, it would also mean less waste through cash security and cash handling costs.

A few years ago, changing consumer behaviour to such a degree would have been unthinkable. Perry says the internet and "chip and pin" have changed all that. Online retailers have helped the public grow familiar with card purchases, while chip and pin has reduced the incidence of fraud from 0.07pc to 0.05pc.

In the EU, according to the European Central Bank, €1.68 trillion was spent on cards in 2008 and use has been growing at 12pc a year for the past five years. Debit card spending this year in the UK is expected to overtake cash spending by value for the first time.


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