This decision by the government of Australia is just the beginning: Australia Bans Cash For All Purchases Over $7,500 Starting July of 2019. I argue that this decision is not an anomaly. It is not an isolated event, but a trend in government, rooted in the desire to have ever more control over its citizenry.
“The ban starts on July 1, 2019 and any payment over $10,000 will have to be made by check or credit/debit card. The government will enforce the measure by allocating roughly $300 million for what it calls the Black Economy Standing Taskforce. The goal is to drum up about $3 billion in new tax revenue over the next four years.”
Their excuse is to crack down on tax evasion and black market goods, especially tax-free cigarettes. But the more fundamental motivation for this type of law is control. When transactions occur by check or credit card or debit card, the government can track and control the buying and spending of citizens. Cash is anonymous, and anonymity scares government leaders. As the saying goes: “knowledge is power”, but in the modern world, digital information is that type of knowledge which equates to power.
Why is there a large black market in cigarettes? It’s because the government has issued insanely high taxes, to control the behavior of the population. The government is like your parent or nanny, telling you what you should and should not do, and enforcing that judgment via taxation and control of money. The large black market in tobacco products should inform the government that the citizenry rejects that tax; it should be revoked. But instead, they push for greater control.
And this tendency to seek ever more control is at the root of every form of government. No matter how democratic a government may be, once leaders are in power, they need a certain amount of control to do their jobs. But every task will seem easier and its goals will be achieved with greater expediency, when that control increases. So every government seeks greater control…and more money.
Governments need money to do almost anything. And since government is very inefficient, it uses more money that it ought to use. Greater control is used to get more money, and then more money gives the government greater control. It’s a vicious cycle. So not only does every government seek increases in power, but also increases in taxation. And this process is rarely ever reversed. For every true tax cut, there are a dozen increases in taxes over time.
Cash is anonymous, making control and taxation harder. So I think it is inevitable that every government eventually becomes hostile to cash transactions, including the U.S. federal government and the States. The search for more tax money and more power is opposed by any form of anonymity.
And this brings us to the question of cryptocurrency. It’s new and risky, so don’t put your life savings or rent money into it. But crypto has the advantage of anonymity and “mobility”. Cash is physical. You have to hand it to the seller. Crypto can be used to buy goods over the internet. It can be moved across international borders without government permission. It can be traded for other cryptocurrencies, increasing its anonymity. Therefore, I suspect that many governments will reject crypto, or try to control it by issuing their own version of cryptocurrency, without the anonymity.
What’s best and worst, from a prepping point of view? Keep a good chunk of cash on hand, for when the internet or the credit/debit system crashes. Prefer older bills, which lack the newer security strip, making the cash easier to track. And maybe start to become familiar with cryptocurrency. There’s enough momentum behind crypto, and enough money invested by big players, that it is not going away anytime soon. And certain versions of crypto will tend to retain its value and its anonymity.