Whenever a government wants to really do something it has a go-to move. That go-to move almost always involves linking something to crime. In this case, apparently only criminals use the 500 euro note and US $100 bill, and therefore they should abolish it.
Going back to the internet. It was the same justification used for an internet filter. Without an internet filter, paedophiles would run rampage, as would drug dealers and gun runners…and any other criminal you could think of. But the real issue at stake isn’t that governments want to stop crime. The real issue is that governments want absolute control over money…your money.
You may remember the presentation by Bank of England chief economist, Andy Haldane. He made the case for abolishing all physical currencies.Why? Because if a bank wants to impose negative interest rates, it will be ineffective because savers could withdraw their money and stick it under the mattress.Now, be clear. You editor isn’t saying that we oppose electronic currencies. Far from it. Even though we don’t fully understand the concept of Bitcoin, we do understand that it’s a free market invention.
The problem lies with the potential of a government imposing fully electronic currencies on the people. Because, just as the government has found a way to manipulate the current paper (fiat) system of money by printing more to devalue it, you can be just about guaranteed that if any government mandates electronic money as the sole legal tender, it won’t be long before your savings disappear in a puff of electronic vapour.