Empty wallet? You’re not alone.
Less and less people are carrying physical cash as the rise of the ‘cashless society‘ comes into full effect. We have written about this trend for years, most recently in an article titled Cashless Society comes to Canada published three months ago in February. This has come to pass as Apple Pay will now allow consumers to transact with their smartphones in Canada. The cashless society is being driven by two methods:
- disconnect the individual from the real value of their savings, in a bid to boost the velocity of money.
- move more control into the hands of the government and those running the financial system.
If they can track your purchases, big data and big brother can stay one step ahead of the consumers thoughts and actions.
Physical Cash gives way to Cashless Society controlled by facilitators
Cashless society initiatives are largely being driven under the guise of convenience. The Apple Pay mobile system is the latest app to breakthrough and the wireless payment system went live across Canada today. Apple Pay allows iPhone users to pay for items using their smartphone. More still, for purchases under $100, the device will work the way ‘tap’ does now. Consumers will just hold their phone to a payment processor and without entering a code, presto, a sale will be made.
The first two banks leading the way? RBC and CIBC. Both banks have said they will accept Visa, MasterCard and debit cards issued by those Canadian institutions, to make transactions happen through Apple devices. These won’t be the first banks to get in as CBC reported Interac is said to be in talks to“bring Apple Pay to debit cards issued by all Canada’s biggest banks, including Scotiabank and TD.”
While you might be staring into an Apple monitor, the company has swiftly moved into your home, earphones and watch; and, it is now becoming your wallet. But don’t worry, if you lose your phone, you just have to shut down the app before someone begins buying things.
In a report from November of 2014, titled Death of QE, Birth of Cashless Society, we relayed some shocking stats:
“Zero Hedge reported on Wednesday that,
“…it now appears that the Fed’s wanton money printing hit a brick wall in 2014, and together with the transitory end of QE earlier today, the Treasury’s literal printing of money also tumbled, with just 650 million of the brand new banknotes issued, an 85% plunge from the year before. In fact, the number of $100 bills printed in 2014 was the lowest amount of this higher denomination unleashed into broad circulation since 2004!”
source: http://www.zerohedge.com/news/2014-10-29/feds-other-taper-printing-new-1…
Our report went on to note that:
“The Fed encourages a cashless society to increase spending and ward off deflation
By using cash more often than cards, you are forced to be a conscious spender. A study by the business guru and New York Times bestselling author Ramit Sethi discovered that using only cash to pay for items decreased his spending by roughly 18%.
Conscious spending by the masses would, almost guaranteed, lead to deflation in this economic environment. The Fed, central bankers and governments around the world are absolutely terrified of deflation.”
Click here to read Death of QE, Birth of Cashless Society.
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Cashless Society breeds bad spending habits
These negative spending habits brought about by a cashless society should not come as a surprise. I wrote an article titled Cashless Society Coming to Canada in February of this year. The review highlighted recent endorsements in the U.S. to ban $50 and $100 dollar bills altogether. This was a shock initially, but the motive quickly became obvious. Below is a short excerpt:
“Another reason removing $50 and $100 dollar bills from the system could be the misguided hope from the central banks that it will increase the velocity of money. The velocity of money continues to hit new all-time lows.”
Below is an updated chart of the Velocity of Money:
What makes the above chart all the more disturbing, is that, Household debt in the U.S. has been declining for years.
There is still so much debt, unemployment and lower wages, that money is simply not circulating through the system.
Regulators and the government are hoping that a cashless society will decrease crime, stave off deflation and give individuals less control of their finances. That last fact is the sad truth, all of the control rests with the facilitation, not the individual. If the internet goes down, good luck paying for that ham sandwich. Welcome to the cashless society, it has now truly arrived, in Canada.
This article represents solely the opinions of Alexander Smith. Alexander Smith is not an investment advisor and any reference to specific securities in the list referred to in the article does not constitute a recommendation thereof. Readers are encouraged to consult their investment advisors prior to making any investment decisions. The information in this article is of an impersonal nature and should not be construed as individualized advice or investment recommendations
