subject: The End Of Cash Is Near [print this page] The End Of Cash Is Near The End Of Cash Is Near
Did you ever stop to think that in a fundamental way, credit cards are essentially old style IOU's in a fancier form? President Truman once said, "The buck stops here." He was playing on the saying of 'pass the buck,' but it is intriguing when you think about it: where is this buck anyway?
Actually, what is holding up our whole monetary system (which simply means the catalyst by which goods and services are rendered globally; much as language is the means by which meaning is inferred), is the promises and expectations of individuals and organizations to fulfill their stated obligations and promises. They must too if they want to remain part of the system.
In most countries in the world, people still use cash for their purchases. In many modern countries however, people hardly use cash at all- they use a credit card. This trend will increase to the point where cash will, I predict, disappear altogether. But there is a difference: cash is evidence that a particularly individual has already done something tangible to obtain credit; he has provided goods or services and has been paid for it, (or has at least obtained it some other way; ultimately it comes back to goods and services). A credit card assumes that an individual is either earning credit now, will be in the near future, or has stockpiled credit. There isn't much of a margin though- if the credit card holder fails to behave in such a way that his credit is greater than his debts, he will either be penalized by interest or forced out altogether.
In the future, I believe that in order to buy anything at all, we will have to use electronic cash and that will ultimately be based on a credit card (the electronic IOU). There are obviously tremendous advantages in electronic credit (notice I'm not wont to call it cash), but it also has Orwellian drawbacks in the sense that a new debtor class in society will quickly arise. These people will pay more for the same item than everyone else and will never get out of debt. In fact, there is such a class right now and it is growing.
