The E-Sylum:  Volume 10, Number 25, June 24, 2007, Article 24

THE CASHLESS SOCIETY

A June 20 article by Robert Samuelson notes that the long-discussed
"Cashless Society" is closer than ever to reality.  Will coins and
paper money be completely obsolete someday?

"It's one of those vast social upheavals that everyone understands but
that hardly anyone notices, because it seems too ordinary: the long-
predicted "cashless society" has quietly arrived, or nearly so; currency,
coins and checks are receding as ways of doing everyday business; we've
become Plastic Nation. In the tangled history of American money--from
tobacco receipts to gold and silver coins to paper money and checks--
this is a seismic shift. Time to pay attention.

"If you visit the U.S. Bureau of Engraving and Printing (one operation
in Washington, the other in Ft. Worth, Texas), you can still see greenbacks
being made. They come off the presses in sheets of 32. In fiscal 2007,
the government will print about 9.1 billion individual bills. But 95
percent is to replace worn currency, not to expand the supply. THE BUCK
STARTS HERE, say signs on some printing presses. In reality, today's
buck usually begins (and ends) as a mere data entry.

"You can use a card almost anywhere. From 1999 to 2005, the number of
card-swiping terminals nearly tripled to 6.8 million, says the consulting
firm Frost & Sullivan. Habits and mind-sets change. In 1990, most Americans
regarded paying for groceries by credit card as unnatural. Now cards cover
about 65 percent of food sales, says the Food Marketing Institute. There's
electronic banking (83 percent of Social Security beneficiaries receive
their monthly payments by automatic deposit), Internet buying, prepaid
cards and automatic identity tags for toll booths.

"U.S. currency (dollar bills of all amounts) totaled $784 billion in 2006,
but probably half or more is held outside the United States by foreigners
who prize dollars--especially $100 bills--as a store of value. That
suggests that less than $400 billion in currency supports a $13 trillion
economy. In 1970, the economy's relative need for cash was almost twice
as high."

To read the complete article, see: Full Story

  Wayne Homren, Editor

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