Monday, January 22, 2007

There will always be cash

So, I was forced to spend some cash today on lunch.

I hate cash.  I dropped a $10 and got back $7.83.  A wad of bills and a stack of change.

Yuck.  I hardly ever carry the stuff and when I do the bills usually hang around for weeks and weeks because I hardly ever spend the stuff.

Don’t get me wrong.  I like the feel of a stack of ones or $100s or the persuasive power of 25 $100 on the trunk of a used car can have while negotiating a selling price for that superbly adequate vehicle to get you to and from the office.

I like cash that way.

I just don’t like the way it can quickly disappear and you are left with no good way to account for where all the money went.  How many times have we all said “I swear I had a $20 just this morning” not realizing that that magazine, pack of gum, coffee, and newspaper turned the $20 into a $5, a few $1s and some loose coins.  It happens that quickly.

But all the same, that little plastic card makes money vanish even quicker and you didn’t even get the chance to hold those pretty little bills.

Yes, there is an emotional attachment to money.  That’s why you spend less when you actually spend cash—statistically you spend 16% more with plastic than with paper—but it’s also just cumbersome and hard to track.

But it’s that very feature of being “hard to track” that will always, always make money—cash, payola, dinero—king in the market. 

There’s just way too much money in crime to make cash go away.

Consider it.  How are they turning the screws on terrorists?  Hitting the money supply.  How are they turning the screws on KoreaIran?  Hitting the money supply.  They’re forcing the terrorists and criminals and rogue governments to work on a cash system—no credit, no banks, no financing, no plastic.  The end result is making it hard for the bad guys to do business.  Of course, it also makes it harder to track the economics.  If they’re only using cash they’re going to find a way to circumvent the whole financial system.  You can’t track a briefcase full of bills.  Any corner store can break a $100.  For the right price, any seller will accept a briefcase full of dough as payment.

Cash is inconvenient.

But there’s too much money in crime to ever make cash go away.

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