A Cashless Society

The term "A Cashless Society" refers to two types of societies. The first case may refer to a society that operates by barter trade as the sole means of payment whereas the second case may refer to a society in which plastic money or any other technology that supports virtual transfer of money are the sole modes of payment. In this particular article I am referring to the second case. Business activities have been in existence since creation. One nature about business, is that for any product given up, something needs to be given in return. In short, business only becomes business when payment is assured. Ages ago, businesses were conducted by barter trade which later paved the way for monetary systems. In the recent years, there has been a surge in the use of plastic money despite resistance from various groups. The world has never made an abrupt uniform change in systems of currency; rather, the change has always been slow and has to start from a particular region before spreading to the ends of the world. The truth is that the world is in a transitional period; from a paper money based society to a cashless society. In the United States of America 93% of their transactions are cashless. The remaining 7% mainly comprises transactions involving meager sums. Norway is even further ahead, with 97% of its transactions being cashless. Presently, 15% of the world's transaction have been cashless. of the merits and demerits associated with such a society. The following are some of the merits associated with a cashless society. • We will have a cleaner society. Phasing out paper money will ultimately result in a cleaner society because it transmits more germs than plastic money. The use of plastic money will hence result in a much cleaner society. • Improved security. Robbers prefer stealing paper money to plastic money because of the tight security measures provided for by plastic money. This means that in a cashless society there will be fewer cases of bank robberies and even the streets will be safer from money-snatching thugs. • Easier business transactions. Plastic money will hasten business transactions, in that people will no longer have to worry about carrying cash for them to carry out their business activities. In a cashless society, a card is all that will be required. For transactions via the internet or phones, submission of the required financial information is that is required and this consequently eases business transactions. The following are some of the demerits associated with a cashless society. • When using cards, the owner is required to give a valid pin number for them to gain access to their account. This feature may turn out to be a disadvantage in cases where the real owner of the card forgets his/her pin number. This will mean that they will not able to get access their accounts, at least, after the bank addresses their issue. • Credit cards make it easy for people to accumulate credit. This may be a good thing but for those who will be unable to clear their balance by the required time they will be charged high interest rates. This will consequently damage their credit record and may hamper future efforts to borrow. • There will be no privacy. This is probably the chief disadvantage associated with a cashless society. There will be a record for every transaction and this means that financial institutions will have vital personal information on their consumers, which people fear could be used for ill gains. • Computer hackers can also hack into people's accounts and withdraw funds. This means that it is possible for people to suffer huge losses simply because others are siphoning money from their accounts. • Printing of paper money is usually an expensive affair. In a cashless society, governments will be able to use the money that would otherwise be used to print cash on other purposes. This will enable governments to save billions of money.

Cyprus Bank Bailout Steals Money From Innocent Savers

Here's what they want to do: • Savers with under 100,000 euros deposited must pay 6.75% • Those with more than 100,000 in their accounts must pay 9.9% • Savers will be compensated with the equivalent amount in shares in their banks • The levy is a one-off measure - so they say... No one could have prepared for this... so I am advising you ALL wherever you live to beware of the banks. All banks are interconnected and your money is not necessarily safe in a bank. Make sure you have enough cash out of the bank. And invest the rest in gold and silver. Right now, the prices are quite low and in the future, because of the uncertainty in the world economy, the value of your bullion will increase greatly. But don't buy it for that reason. Buy it because it gives you insurance: something that is outside of the control of governments. Don't buy shares in gold and silver, but buy the actual coins and bars that you can hold in your hand. Don't let anyone else take care of your bullion, keep it yourself. Innocent people are being condemned for the greed and mistakes of their banks. They trusted their banks to take care of their savings and without warning, the bank steals from 6.75% to 10% of people's wealth overnight. The Cypriot government is having a rethink about the situation and meets tomorrow, but even if this particular robbery doesn't go ahead, the writing is on the wall: governments can steal our money overnight and we have no power to stop them if we continue to keep our money in the banks. Cyprus is a tiny country and may not have as much power as one of the bigger EU countries, but what if this happens in Spain or Italy as it could?? Can you imagine the uproar and the civil unrest? And they say that the levy is a one-off measure - but of course the government could change their minds about that next month. The positive outcome that could come from this is that we can start to work together outside of the system. By using barter and exchange we can swap products and services within our communities without having to be penalised by our tax systems. The taxation regimes of failing states and governments are going to get more and more invasive and controlling as time goes on. Let's not allow the banks rip us off and let's try to prepare for the coming changes. Barbara Goldsmith, MBA, CeFA, CeMAP, Cergi, is an independent financial adviser, economic analyst and business consultant. Author of: Handbook For Surviving The Global Financial Crisis Hosted her own show on Canterbury Television, Money Talks.

Shares, Property or Cash?!

For the past five years as a whole, bonds and cash have been the place to be. While yields on bank deposits have been single digit, they have been higher than the returns from both shares and residential property. Of course, some shares and some property locations have done well but the broad experience has been poor, as the global financial crisis and its aftermath have weighed on returns from growth assets. This flight to "safety" has been a worldwide phenomenon. The trouble is that all investment trends end up getting pushed too far, eventually giving way to a reversal. We are likely now at, or close to that point, in the case of cash and bonds relative to growth assets like shares. What's the outlook? The return from an asset is a function of the income flow or yield the asset generates and capital growth. Of course, in the case of cash or term deposits, the yield is all that drives the return. And on this front the return outlook for cash is looking less promising. Cash Over the last year the official cash rate in Australia has fallen from 4.75 per cent to 3 per cent, as the Reserve Bank has sought to boost activity in areas like housing and retailing, as momentum in the mining investment boom slows and inflation is benign. While this is not the only influence on bank term deposit rates, it is the major one. As a result, while term deposit rates of 6, 7 and even 8 per cent were available a few years ago they are now nearer 4 per cent and falling. Given the softness in the domestic nonmining economy and the prospect for further RBA rate cuts, term deposit rates are likely to fall even further. This means that the prospective return on cash is rapidly dwindling. Property By contrast, residential property already offers comparable yields and will benefit as economic growth improves. House and apartment yields are running around 3.7 per cent and 4.8 per cent respectively, which are well up from their lows last decade. With mortgage rates well off their highs and likely to fall further, the residential property market appears to have bottomed out after falling since mid-2010, with a mild cyclical recovery likely over the next 12 months. However, short term gains from property are likely to be limited as buyers remain cautious about taking on excessive debt, particularly as job insecurity remains high. Furthermore, capital growth in residential real estate is likely to be constrained over the next five years by still very high property prices relative to incomes. There are two risks for property. The main downside risk is that China has a hard landing, with the hit to export earnings resulting in higher unemployment, forced sales and in turn, lower house prices. The risk of a hard landing in China seems to be receding though. The other risk is on the upside; there is always a concern that the old housing bubble is reignited by the latest collapse in mortgage rates. Again this seems unlikely though, given Australian's more cautious approach to debt since the GFC.