Deflation is worse than inflation, and it's hard to hit a single number, so central banks aim for low, stable inflation. 1-2% inflation isn't very perceptible vs 0 but avoids deflation.
Please explain why deflation is worse.
Cash becomes an appreciating asset. It leads people to hoard cash rather than invest in stocks and bonds, and delay purchases stagnating the economy.
I moved to Sweden ~2.5 years ago and I can count the number of times I've used cash on one hand. It's definitely less private, but the convenience is unmatched. Honestly, I don't even know what the modern Swedish notes look like now!
> but the convenience is unmatched I've actually timed this. It takes ~8 seconds to fish out the card, insert it, wait for approval, and replace it in the wallet. Roughly similar time frame for unlocking your phone and approving the NFC transaction. It takes ~15 seconds to fish out a C-note, insert it into the self-checkout bill accepter, retrieve the change, and put the change into my wallet. Delta of 7 seconds. Let…
The delta is even greater - due to covid most credit/debit card payments were contactless (from [1] 60% in general, 73%+ at bars/restaurants) - I'll assume it will take awhile for contactless payments to drop back down to pre-COVID levels, if they ever do.
For contactless payments, I can see payment taking less than 5 seconds total. In Canada, probably spend more time dealing with tip/receipt screens than the time required to perform the contactless payment.
Correct, it's the rarety of all others bank notes that is increased, increasing purchasing power is only one consequence possible but not the only one. By the way, being hard to measure doesn't mean it doesn't exist. And there are plenty of things easy to measure that are meaningless
Bank notes are not re-issued 1:1 with destroyed notes. >> being hard to measure doesn't mean it doesn't exist No in this context it does. Either you can measure the increase purchasing power or you can’t. And if you can’t measure it, it doesn’t exist in this specific case.
Most economics consequences will never be measured ever
Exchanging value between two economical entities using pieces of paper seems crazy when you have better ways. Try to explain buying with cash in 200 years to someone who never seen it. What if I need to pay just a little, do I tear a bit of the paper? No, you can't tear. If your piece of paper is worth too much then the seller gives you other pieces of paper worth less. Can I throw out the rest of paper after I'm don…
Exchanging value between two economic entities using primitive card numbers seems crazy when you have better ways. Try to explain buying with a credit card online 200 years ago to someone who has never seen it. You type in about 23 digits (16-digit card number, 4-digit expiry month, 3-digit verification code) to make a payment. But these digits only change every few years as you renew your credit card. So many partie…
I have almost never done that. I just touch my personal computing device to a payment terminal and it's done.
I agree that giving anyone your card number is insanity. I only did it few times in hotels and it required tremendous leap of faith from me. To be honest I should have gotten plastic prepaid for this purpose.
Not using cash means someone gets a cut of a processing fee. Every time, with almost no exceptions. I’m not down to have rent seeking companies taking a slice of my hard earned money just so I don’t have to manage a few pieces of paper. You’re generally paying 3-4 percent of every transaction now, as that’s pretty standard for debit cards on businesses, and it doesn’t matter if it’s charged to the card holder or the…
There were already costs. There were always costs and risks associated with cash handling: armored trucks doing cash collection, risks of money in tills being lost. If it really were a lot cheaper you wouldn’t see businesses clamouring to go cashless. That’s not to say I think cash should go the way of the dodo, but I don’t think there’s that much difference paying g4s to collect your money vs Mastercard. IMO the ben…
If it was cheaper the government wouldn't force you to take part in the scam under pain of death.
Exchanging value between two economical entities using pieces of paper seems crazy when you have better ways. Try to explain buying with cash in 200 years to someone who never seen it. What if I need to pay just a little, do I tear a bit of the paper? No, you can't tear. If your piece of paper is worth too much then the seller gives you other pieces of paper worth less. Can I throw out the rest of paper after I'm don…
I don't think OP was arguing to completely get rid of all wired transactions. And for all the points you made you still missed OPs major gripe, paying a third party for every single transaction you make. Wanna give your children pocket money? bank gets a cut...doesn't seem right tbh
But you pay for facilitating the service of value transfer.
If you do it by hand yourself the effort burdens you and the seller.
You might argue that the cost is too much and maybe it should be state run and paid from taxes since it's the state that provides the service of money.
I really really really like cashless payments I really really really dislike that my money can be whisked away at the whim of a cray government or a glitch in the system
A government can reduce the purchasing power of cash too. https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis... Or just issuing new money at a rate that exceeds demand for the money (meaning the relative desirability of the money, which relates to the trustworthiness of the community using the money and the economic productivity of the community using the money). Like when the population pyramid starts turn…
>Citation needed. I've been depositing cash for years, with multiple banks, and nobody has ever charged a "handling fee". It's a fee associated with business accounts. > https://www.bankofamerica.com/smallbusiness/deposits/resourc... >Cash Deposit Processing No fee for first $7,500 in cash deposited per statement cycle at an ATM or Financial Center; then $0.30 per $100 deposited thereafter
- Credit cards account for 31 per cent of transactions.
- Cash accounts for 29 per cent of transactions.
- Debit cards account for 26 per cent of transactions.
So what does it cost to process a transaction? The Bank of Canada survey looked at the estimated cost of processing a $36.50 transaction, which was the median cash transaction in its survey. Costs broke down like this:
Debit card: 19 cents.
Cash: 25 cents.
Credit card: 82 cents.
The study notes that the overall cost of electronic transactions falls as the volume increases, which the authors suggest, may encourage greater use of electronic payments.
90% of the people I'm paying are businesses. If an individual wants cash they can ask and I'll pay cash. I wouldn't just assume someone prefers everyone to be paying them in cash or screwing around with various electronic payment options that aren't super-common where I live.
My house cost $240 to clean. Handing around fat envelopes like a wise guy is a macho dream but not practical.
Wow, a whole 4 bills - that envelope must be bursting at the seams.
Exchanging value between two economical entities using pieces of paper seems crazy when you have better ways. Try to explain buying with cash in 200 years to someone who never seen it. What if I need to pay just a little, do I tear a bit of the paper? No, you can't tear. If your piece of paper is worth too much then the seller gives you other pieces of paper worth less. Can I throw out the rest of paper after I'm don…
Exchanging value between two economic entities using primitive card numbers seems crazy when you have better ways. Try to explain buying with a credit card online 200 years ago to someone who has never seen it. You type in about 23 digits (16-digit card number, 4-digit expiry month, 3-digit verification code) to make a payment. But these digits only change every few years as you renew your credit card. So many partie…
Just yesterday, i went with my friend to some place, we park but the spot is metered, the park meters have been replaced by a “more convenient” digital system, there used to be machines where you could pay and print a ticket, of course this was still inconvenient so the machines were removed altogether and now it’s an app-only system, wonderful but there are several apps for different zones so if you go to an unusual place chances are you need to install a new app then enter the location, the time you want to park, the plate number, a picture of the tag, the payment info, the 2FA code and receive the confirmation. All this replaced the inconvenience of popping a quarter in the meter.