What are your thoughts on cash?

[FreddyG]

I was just stating the very obvious fall in the purchasing power of the pound.

I am regarded by a select few as being more or less sane and my savings are in gold and shares in commodity companies, whose share prices reflect the profits made on the escalating costs of raw materials and the catastrophic fall in the purchasing power of all currencies.

But yes, very obviously, all transactions have to be done in Euros, pounds and dollars. But that is all a currency is good for. You either spend it or (if you don't want to buy anything at all) fix it to a physical asset like actual gold.

 

[fisicx]

I think this topic needs a Byretorial @FreddyG

 

[FreddyG]

I think this topic needs a Byretorial @FreddyG

Sorry for the delay - had to take the dogs for a walk! Then I looked up the word Byretorial . . .

That cryptic message had me digging and there seems to be quite a good deal of that stuff. In fact, there are pages of Byretorials.

On the subject of the fall of purchasing power of money, that is a huge subject and I am about to write a book on 'The Economics of Inequality' and 'Purchasing Power' plays a massive role in that, so at best I could merely state snippets. I'll think about it. Perhaps you (and anybody else) could PM me your thoughts on the subject.

 

[Clinton]

To all the yuppie, 'progressive', look-at-how-cool-I-am, let's go digital-only types, today's news: "Cash accounted for 6bn payments in 2023, with the number of people who mainly use cash rising from about 900,000 in 2022 to 1.5m in 2023".".

After falling for a long time, cash use is rising now.

"The Treasury select committee is expected to report shortly on its inquiry into whether there is any need to regulate or mandate the acceptance of cash".

The cost of living crisis plays a part, people are needing to be more careful and one is likely to spend less if spending in cash.

There is another reason for this growth in cash - increasing distrust of our government and institutions.

Banks are taking the p*ss. They shouldn't be charging to count cash. Machines to count notes cost like £80 each wholesale, for coins a bit more. Banks don't need more than one per branch! But they are part of the finance industry mafia trying to push everyone to digital-only. They have ulterior motives and we need to thwart them.

 

[FreddyG]

Banks are taking the p*ss.

Well, they can take mine! But it's worse than that! They are taking people's shirts.

They took the government's shirt ages ago. Governments in the UK, the US and most other countries are now giant, loss-making businesses that have lost all their assets. If they didn't keep writing IOUs in the form of massive amounts of T-bills and bonds (debts) they would have to declare bankruptcy!

Yes, there are vast areas of UK government land and countless properties. But the debts and off-book liabilities such as pensions and other payment obligations are proportionately every bit as massive as those of the US government - and those stand at $130 trillion (Congressional Budget Office figures) so the UK will be roughly proportionate to those figures. Say, about £2.8 trillion on-book and £6 trillion off-book, such as government pensions and contingent liabilities from financial guarantees or public-private partnerships (OBR).

The poor everywhere have lost what few assets they once had and the middle classes are today clinging on for dear life, but up to their ears in debt to the banks and other financial institutions. So they've got most of the private shirts as well!

This has been all made possible by (1) inflation - and (2) lying about inflation.

It's very easy to check the homework of people like the ONS - just check your accounts with the supermarkets for those core items that everybody has to buy. i.g. the Lidl-Plus accounts. All are available online and I'm married to a woman who keeps these things on spreadsheets!

ONS food inflation for 2023-24 was 2%. Mrs Freddy's Lidle-Plus account 20%. Rinse, repeat for Tesco and all the others!

So, where is all this debt heading?

Well, the other side of debt is credit in the same way that money is also just debt and credit. And we are in a giant debt-credit bubble - and bubbles burst! And unlike the overture (the 2008 global financial crisis) this one will be The Real Thing!

 

[fisicx]

Another doom and gloom post by TheByre (aka FreddyG). You were sussed weeks ago despite your attempts to disguise yourself

 

[Nathanto]

the middle classes are today clinging on for dear life, but up to their ears in debt to the banks and other financial institutions.

That's not a state of affairs that I recognise... some people might be struggling but the majority, certainly in my world, seem to be doing fine.

I've posted before about how busy eateries are every time we go out for lunch. Similarly Facebook posts show that a huge number of my friends & family are happily vacationing on a regular basis. I've obviously no idea of their debt/income ratios but also obviously these people are not remotely clinging on for dear life.

 

[DontAsk]

I'm the one who has the spreadsheet in our house and I can confidently say that inflation is nowhere near 20%, not even 10%.

But that's the problems with averages. Everyone's inflation rate is personal to them.

 

[FreddyG]

That's not a state of affairs that I recognise... some people might be struggling but the majority, certainly in my world, seem to be doing fine.

Not according to the Joseph Rowntree Foundation.

Read this lot - https://www.jrf.org.uk/cost-of-living/jrfs-cost-of-living-tracker-winter-2024

Another doom and gloom post

In 1970, the average dwelling cost £3,667 and an unskilled labourer earned £1,400 p.a.
That's about two years and eight months of that man's gross wages.
In 2025, the average dwelling cost £268,000 and an unskilled labourer earned £25,000 p.a.
That's about ELEVEN years of that man's gross wages.

The 1970 house cost 102 ounces of gold.
The 2025 house costs 115 ounces of gold.
Measured in gold, house prices went up just 13% over 55 years.

Fiat currencies are just another type of credit note and over those 55 years, those credit notes have been discounted by 98.5% - The pound has lost 98.5% of its purchasing power. Other currencies have done much the same, thanks to inflation caused by central banks creating money (M2).

Gross modal income - the largest number of full-time employees receive.
2010 - unskilled labour earned £19,500 p.a. gross.
2025 - unskilled labour earns £25,000 p.a. gross.
Purchasing power of £25k when measured in 2010 pounds equivalent £15,600. (all BoE figures)
That is a fall in living standards of c.a. 20%.

Now add all the madness of the various political situations around the world, the fall in house prices in the US, the fall in the economic outlook for China, tariffs. Did I leave anything out?

If you are running a business, you have to understand where the world is right now. If all you do is worry about your P&L, then pretty soon, you will not have much of a P&L to worry about!

 

[Nathanto]

Not according to the Joseph Rowntree Foundation.

Read this lot - https://www.jrf.org.uk/cost-of-living/jrfs-cost-of-living-tracker-winter-2024

That JRF report is about low-income households and not the middle classes that you claimed were clinging on for dear life...

 

[Kerwin]

To all the yuppie, 'progressive', look-at-how-cool-I-am, let's go digital-only types, today's news: "Cash accounted for 6bn payments in 2023, with the number of people who mainly use cash rising from about 900,000 in 2022 to 1.5m in 2023".".

Wow. You really have a problem with people who have an alternative view to you.

 

[Russ Michaels]

I was just reading this article:

Disability charities urge government to protect cash

Disability Rights UK and the RNIB are warning that a cashless society could create barriers for disabled people.

www.bbc.co.uk

and wondered what everyone here thought about accepting cash? Personally I only use contactless with my phone or watch. I never carry cash or cards which makes things so much easier for me but what do you think? Accepting cash is such a pain as you have to count everything up at the end of the day and pay it into a bank/post office so I can understand why some businesses want to go contactless only.

What are your thoughts?

If you deal in cash make sure you issue receipts as proof of payment to avoid any disputes.
Best thing is to have a chilling app on your phone that sends the receipt/invoice via email.

 

[DontAsk]

Gross modal income - the largest number of full-time employees receive.
2010 - unskilled labour earned £19,500 p.a. gross.
2025 - unskilled labour earns £25,000 p.a. gross.

So what percentage of the workforce were insulted labourers then and now?

 

[FreddyG]

That JRF report is about low-income households and not the middle classes that you claimed were clinging on for dear life...

20% reduction in gross income --> about 25% reduction in net income because the tax brackets remained static.

That is for the bottom 40%, so it includes the lower end of the middle classes. After housing costs, they have a net income (according to JRF) of £18,770 - so assuming a rent for a household of at least £1k pcm, that is a net household income after taxes and other deductions of over £30k. That would put them fair-n-square, in the middle classes.

And they will have been reduced to £30k by 25% (BoE figures again!) How are you at dealing with a 25% reduction in pay?

This is a bit like the scene described by Gary Stevenson in 'The Trading Game' about life on a trading floor. He was surrounded by people who got their calculations badly wrong because they had no idea what the real economy was doing. They think because they are alright, everybody else must be doing just fine! "The majority, certainly in my world, seem to be doing fine!" they say, by way of proof.

They are not!

 

[Dork Lard]

I like cash, I really do. I like it's smell, I like it's feel in my fingers & I especially like that feeling I get when counting it with my fingers. Who remembers a wage packet stuffed full of cash? I remember my first ever wage packet, stuffed full of £38 for 48hrs work, it bought me a new pair of 'Flares', a purple shirt & about 30 pints of lager that very weekend. I remember the first time I was paid £100+, the week before they'd only paid me £98.80 & I so needed to break that barrier. I remember 'me mam' telling me years later how that nearly killed my father 'cos he was only earning £90'ish at the time, but I also remember 'me dad' telling me shortly before he died of just how proud he was of me & all that I have achieved. I remember handing over the £395 cash for my first ever car, a Fiat 131 Mirafiori & losing my virginity on the back seat shortly after. I remember buying 'me dad' a house for £9k so he could live in it when 'me mam' kicked him out for smiling at 'Janice' in the wrong way. I remember slapping my old school ADIDAS gym bag, stuffed full of wads of £blueys (£5fivers) on the solicitors desk & I still own that house which is now occupied by an old lady fallen on bad luck who cannot remember why I love her so dearly yet still she manages to moan about her peppercorn rent. I remember licking a £10 note, sticking it on my forehead & leaning over the very busy bar, that got me noticed by the barmaid who became my first wife. I remember this like it was yesterday, walking in a Lloyds bank branch (remember them) in my early 30's to withdraw a few £k's to pay the lads & realising that the bitch behind the counter was an old school enemy of mine. I remember her look of disgust when she recognised me, so I asked for a balance check & I remember her look when all those numbers popped up on her screen. I remember my accountant congratulating me on becoming a £millionaire & I remember rolling up a purple (£20) to snort some Columbian marching powder off a healthy young ladies chest shortly afterwards (probably the bestest use for paper money ever). I remember the embarrassment & the humility of a close friend of mine when they asked to lend a few quid but wouldn't tell me why. I remember finding out why & chucking a few more in the pot & finding a few others to do the same. But above all I remember sitting down with 'me dad' shortly after the prognosis of his imminent demise & him telling me that it's just a piece of paper & this is just a number printed on that piece of paper. If you have lasted this far then this is just a small part of my life story. If you understand what my father was saying to me then maybe you understand what cash is also . . . It is a piece of paper with a number printed on it, that is all it is & that is all it can ever be.

 

[Nathanto]

so it includes the lower end of the middle classes.

The very definition of middle-class is "not poor, but are not very rich" but feel free to make up your own definition if that's what floats your boat!

Even if we accepted your re-definition of what "the lower end of the middle classes" means, just because their disposable income has fallen does not mean they are suddenly clinging on for dear life...

 

[japancool]

You can't snort drugs through an app. You need cash for that.

 

[NickZ]

Sweden and Norway paddle back
The Guardian has an opinion on that:
www.theguardian.com/technology/2025/mar/16/sweden-cash-digital-payments-electronic-banking-security

Their concern are security, all of sudden they begin to think.

 

[Clinton]

Wow. You really have a problem with people who have an alternative view to you.

As @NickZ's post above indicates, and my earlier link supports, the world is getting smarter (albeit slowly).

 

[FreddyG]

QE and the threatened introduction of CBDCs have destroyed one of the core functions of currencies - a store of value. That is because CBDCs are programmable.

Money has two core functions - a store of value and a unit of account. Quantitative Easing is the act of increasing the amount of M2 in circulation. Because we have not seen a commensurate increase in productivity since 2007, this has led to inflation. That means that future transactions become uncertain.

The threat of a CBDC is that the ability to store value or to use the currency as a unit of account becomes a political and/or bureaucratic decision. You may think you have £10,000 in your digital wallet, but because of something you are thought to have done (that thought being in the head of a bureaucrat, the police, or a politician) that £10,000 is now reset to £0.

Because that £10,000 can be turned into £0 by an unknown third party, the function of being a unit of exchange is also destroyed. I cannot take your CBDC units because they may become nothing - and for no better reason than something someone did in the history of those units.

CBDC stands for Central Bank Digital Currency. Central banking is a recent phenomenon. At the start of the 20th century, approximately two-thirds of sovereign states did not have a central bank. The widespread adoption of central banks took place in the interwar period and in the aftermath of World War II.

In the 20th century, central banks were often created with the intent to attract foreign capital, as bankers preferred to lend to countries with a central bank on the gold standard. In 1971, the US dropped the gold standard and the price of gold went from £36 (1970) to £615 (1980) and in that decade UK house prices went from £3,667 to £19,213.

What we are witnessing is the steady demise of fiat currencies. The introduction of CBDCs with 'suitable' safeguards would be the nail in the fiat coffin.

The introduction of CBDCs with no safeguards would be the nail in all our coffins.

 

[Paul Norman]

Personaly? I am relaxed about the topic. I prefer to pay card, if you don't accept card I won't rant. Indeed, if I have the cash on me, then we proceed as normal.

However, if you are going to insist on cash, make sure you actually have enough change, because I do not carry a bag of coins with me.

As a business? I take either, as the custome wishes. It kind of makes sense to do so. Again, I prefer you to pay with card, but I am not going to have a rant if you proffer cash.

 

[Ozzy]

Exactly how I feel too @Paul Norman ; pragmatic and balanced

 

[DontAsk]

However, if you are going to insist on cash, make sure you actually have enough change, because I do not carry a bag of coins with me.

This ^^^

 

[japancool]

QE and the threatened introduction of CBDCs have destroyed one of the core functions of currencies - a store of value. That is because CBDCs are programmable.

You said you would commit seppuku if QE didn't cause hyperinflation.

It hasn't. Will you keep your promise?

 

[FreddyG]

You said you would commit seppuku if QE didn't cause hyperinflation.

I have no idea what you are talking about - I even searched this form and nobody ever has even mentioned committing harakiri or seppuku in connection with anything. So that was a strange claim for you to make.

Inflation can only be created by the money supply and is only in proportion to any increase and takes place with about a one-to-two-year lag, depending how extra currency units are introduced.

 

[Newchodge]

I have no idea what you are talking about - I even searched this form and nobody ever has even mentioned committing harakiri or seppuku in connection with anything. So that was a strange claim for you to make.

Inflation can only be created by the money supply and is only in proportion to any increase and takes place with about a one-to-two-year lag, depending how extra currency units are introduced.

So when did post 2007/2008 inflation start?

 

[japancool]

I have no idea what you are talking about - I even searched this form and nobody ever has even mentioned committing harakiri or seppuku in connection with anything. So that was a strange claim for you to make.

Oh now, let's not play that game.

 

[FreddyG]

So when did post 2007/2008 inflation start?

March 2010 and continued until it reached 5% Sept 2011. QE-one was implemented March 2009.

The C19 crisis saw the almost immediate introduction of more Quantitative Easing, including many direct payments (helicopter money) leading to inflation hitting 11% Oct 2022.

 

[DontAsk]

March 2010 and continued until it reached 5% Sept 2011. QE-one was implemented March 2009.

The C19 crisis saw the almost immediate introduction of more Quantitative Easing, including many direct payments (helicopter money) leading to inflation hitting 11% Oct 2022.

That's not hyper-inflation.

 

[FreddyG]

Some definitions -

Hyperinflation is an inflation rate of over 50% per month.

Middle Class - there's no strict definition, but at the moment the middle class seems to refer to those households earning between £30,000 and £60,000 a year net.

 

[NickZ]

Money has two core functions - a store of value and a unit of account. Quantitative Easing is the act of increasing the amount of M2 in circulation. Because we have not seen a commensurate increase in productivity since 2007, this has led to inflation. That means that future transactions become uncertain.

As life evolves it is not only possible that governments
intentions are to reduce your ability to store value. It has become probable that they aim for it.

Inflation is part of the system, the system is based on growth. Growth in sizeable population, so the money supply has to grow too.

 

[Newchodge]

As life evolves it is not only possible that governments
intentions are to reduce your ability to store value. It has become probable that they aim for it.

Inflation is part of the system, the system is based on growth. Growth in sizeable population, so the money supply has to grow too.

Have you ever heard of double entry book keeping?

 

[FreddyG]

Inflation is part of the system, the system is based on growth. Growth in sizeable population, so the money supply has to grow too.

No. That is one of the many fallacies of the so-called 'New Economics' based partially on the teachings of Keynes and FG Knapp, aided by politicians who inevitably over-promise and borrow to fill the shortfall.

Those borrowings (via the bond markets) are what lead to inflation. The magic equation is MV=PQ=GDPn (Money supply x Velocity = Prices x Quantity of all goods and services = Nominal GDP.)

About 20 years ago, the New Zealand PM stated that the government and the central bank were aiming to get inflation DOWN to below 2% and this morphed strangely into 2% becoming a target for irresponsible governments everywhere. It is of course very useful because it helps to inflate away government debts.

But as fund manager Bill Fleckenstein said "Governments everywhere will keep on printing money, until the bond markets take the keys to the printing presses away!"

They take the keys away by insisting on higher interest payments (known as coupons). The UK now has to find £100 billion every year just in interest payments. That does not include any payments of the primary debts - they just keep on increasing!

A little of what you state is true, in that debt incurred by PRODUCTIVE capital spending (e.g. a bridge across a river that divides a town) actually may increase communal wealth, but debts incurred to cover day-to-day spending reduce communal wealth through inflation.

Inflation is a backdoor tax on the poor and the middle classes as these are the people who have to rely on the purchasing power of a currency remaining stable.

 

[NickZ]

Those borrowings (via the bond markets) are what lead to inflation. The magic equation is MV=PQ=GDPn (Money supply x Velocity = Prices x Quantity of all goods and services = Nominal GDP.)

And exactly here comes the part of governmental cheating. Inflation rate in 1st world countries have PC, Washing machines and much more nor perishable goods.

 

[NickZ]

more nor perishable goods.

more non perishable goods.

 

[Ivanzyt]

My views on cash? It's an outdated technology that is costly and inconvenient to process for businesses.
It's also less secure, facilitates fraud and criminal activity.

I don't see any real downside to losing cash unless you are a criminal, tax evader, or someone who thinks the government is spying on them.

Pretty much anyone who thinks that the government is spying on your bank account is just deluded. Sorry to break it to you, but you just are not that interesting; no one cares. So your concerns are really not legitimate anyway. And I have no sympathy for criminals and fraudsters.

Let's get rid of cash asap.

 

[NickZ]

I don't see any real downside to losing cash unless you are a criminal, tax evader, or someone who thinks the government is spying on them.

A % of each country`s population relies solely on cash. In case of crumbling Internet and Electricity i.e. an all out war, cash is your only friend, besides Gold, Silver, Emeralds and such.

 

[Ivanzyt]

A % of each country`s population relies solely on cash. In case of crumbling Internet and Electricity i.e. an all out war, cash is your only friend, besides Gold, Silver, Emeralds and such.

You are correct the criminal percentage of our population rely solely on cash. As we phase it out any other segments of society that need it can be provided with alternatives. It really isn't that hard in fact the alternatives have been around for decades.

In an all out war then OK maybe cash will be useful but the only all out war we are getting into is going to be nuclear and then to be honest nothing really matters. Cash will just be paper useful perhaps to wipe you arse on but not much else. In that scenario gold silver and emeralds are also equally worthless BTW.

 

[LPB 123]

As a business we do accept cash.

Personally I never use cash unless forced (takeaways etc).

 

[Clinton]

In case of crumbling Internet and Electricity i.e. an all out war...

You don't need an "all out war". Lack of connectivity, for whatever reason - cyber attack, incompetence of staff in key services, natural disasters (including solar flares), major IT failures - could leave you unable to pay for even the simplest of things, like food.

What's the probability of each of those happening? Low. Put them all together and the risk starts looking a bit more serious. In the short term you can ride out such situations with cash.

"Impossible to happen" things do sometimes happen.