Most world governments and central banks support narratives that paint cash as suspicious. The plot may be assumed up along the lines of the belief that only criminals, money launderers and drug dealers need cash, while honest citizens simply use their debit or credit cards for any transaction they wish to make. By reasonable inference, anyone who has cash, or deals in cash, is suspicious of government and banks. In South Africa, it is no different: fees on the transaction are exorbitant, and deposits or withdrawals over R25 000 from your bank initiate a cash-threshold report that is sent to the Financial Intelligence Centre (FIC).
Some of my clients have expressed their belief that an outright ban on cash will become a future reality, as go government set up systems by which every single financial transaction is trackable.
The crusade against cash is clear for all to see. Those who wish to minimize the fallout have recognized the important role silver and gold will play. In a cashless society, the government has the ability to simplify cut off citizens from the economy and freeze bank accounts, if it decided to do so – preventing someone from purchasing even a loaf of bread. The consequences for personal finance and social liberties are immeasurable.
As an aside, while cash transaction is declining from year to year, admitted not all of this is a direct result of shady government scheming. There are various other reasons that account for this decrease in the cash economy: e-commerce (Link PayPal), mobile payments such as Apple Pay and Samsung Pay), International adoption of digital payment (for example QR code technology) and cryptocurrencies (such as Bitcoin, Ethereum and Litecoin).
Precious metal investors are convinced that silver and gold – real money, historically speaking – which represent the sole alternatives to fiat or digital currency and wealth outside the banking system, will become enormously important and valuable. I cannot overstate the wisdom of owning real money in a cashless society as insurance against disappearing cash. As Rickards observes, thankfully the value of silver and gold is not affected by the digitization of the other forms of money or currencies.
Article courtesy of Going for Gold: A guide for the South African precious metal investor by Zoltan Erdey
