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The Almighty Buck Government United States

In a Cashless World, You'd Better Pray the Power Never Goes Out (mises.org) 453

schwit1 quotes the Mises Institue: When Hurricane Maria knocked out power in Puerto Rico, residents there realized they were going to need physical cash — and a lot of it. Bloomberg reported that the Fed was forced to fly a planeload of cash to the Island to help avert disaster. "William Dudley, the New York Fed president, put the word out within minutes, and ultimately a jet loaded with an undisclosed amount of cash landed on the stricken island. [Business executives in Puerto Rico] described corporate clients' urgent requests for hundreds of thousands in cash to meet payrolls, and the challenge of finding enough armored cars to satisfy endless demand at ATMs... As early as the day after the storm, the Fed began working to get money onto the island."

For a time, unless one had a hoard of cash stored up in ones home, it was impossible to get cash at all. 85 percent of Puerto Rico is still without power... Bloomberg continues: "When some generator-powered ATMs finally opened, lines stretched hours long, with people camping out in beach chairs and holding umbrellas against the sun." In an earlier article from September 25, Bloomberg noted how, without cash, necessities were simply unavailable:

"Cash only," said Abraham Lebron, the store manager standing guard at Supermax, a supermarket in San Juan's Plaza de las Armas. He was in a well-policed area, but admitted feeling like a sitting duck with so many bills on hand. "The system is down, so we can't process the cards. It's tough, but one finds a way to make it work."


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In a Cashless World, You'd Better Pray the Power Never Goes Out

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  • by Khyber ( 864651 ) <techkitsune@gmail.com> on Sunday October 15, 2017 @09:06AM (#55372279) Homepage Journal

    The second you lose power, you're fucked. This is why cash is king, always has been, always will be.

    • by DontBeAMoran ( 4843879 ) on Sunday October 15, 2017 @09:12AM (#55372297)

      The second you lose power, you're fucked unless you already have cash on hand and until superinflation happens it which case it's only worth something as toilet paper. That's why gold doubloon is king, always has been, always will be.

      • by Anonymous Coward on Sunday October 15, 2017 @09:31AM (#55372343)

        Try buying a loaf of bread with a gold Doubloon. What are you expecting in change, Reales and Maravedis?
        There is a reason why Charlemagne took Europe off of the Gold Standard for ~500 years. Gold was, at best, a Currency Of Account and kept in vaults, and utterly impractical for normal trade.

      • by itsdapead ( 734413 ) on Sunday October 15, 2017 @09:59AM (#55372433)

        That's why gold doubloon is king, always has been, always will be.

        Nah. If you're planning for the collapse of civilisation - even temporary - bottled water, canned food, gasoline etc, are king. When the lights go out, gold will suffer just as much from superinflation as anything, but a can of beans will always be worth a day's food.

        No point in planning for an apocalypse after which Walmart is still open, but only takes Krugerrand.

        • by Greyfox ( 87712 )
          And a well-preserved shotgun shell will let you defend your cans of beans, assuming you have a shotgun to shoot it out of.
          • And a well-preserved shotgun shell will let you defend your cans of beans, assuming you have a shotgun to shoot it out of.

            Oops. No shotgun, but a P8 and a 7mm deer rifle would suffice as well. And on top of that, the rifle would be useful for acquiring fresh meat from the local deer if the situation ever got to the point where backup food sources need to be tapped into in spite of fish and game laws.

        • Re: (Score:3, Funny)

          by PopeRatzo ( 965947 )

          Nah. If you're planning for the collapse of civilisation - even temporary - bottled water, canned food, gasoline etc, are king.

          Here in the US, guns are king. Ammo is king. With 300,000,000 guns in private hands, if the power goes out for any extended period of time, the guy who runs the crematorium will be king.

        • by Calydor ( 739835 ) on Sunday October 15, 2017 @10:27AM (#55372573)

          "After stealing the world's biggest diamond, you flee into the desert to evade capture. Two days later, parched and about to die of thirst, you come upon a man who offers you a glass of water in exchange for the diamond you stole. What do you say?"

          • by Anonymous Coward on Sunday October 15, 2017 @10:34AM (#55372601)

            Make the trade, drink the water quickly, then attack the guy to get my diamond back.

            If he was particularly smart, he would have waited for me to collapse and take the diamond. If he was particularly strong, he'd attack me and take it.

          • by Anonymous Coward

            That guy is a witness, he must die. I quickly shoot him with my gun, then take any good/water he had on him.

            You're not very good at these questions.

          • Next time to steal a diamond of such value, make sure you have an escape plan ;)

          • by HiThere ( 15173 )

            People don't seem to understand "dying of thirst", though I'm not sure two days would be enough unless it was a very hot desert.

            When you're dying of thirst you're too weak to stand up, much less assault someone who isn't. And you don't recover immediately after drinking, either.

        • That's why gold doubloon is king, always has been, always will be.

          Nah. If you're planning for the collapse of civilisation - even temporary - bottled water, canned food, gasoline etc, are king. When the lights go out, gold will suffer just as much from superinflation as anything, but a can of beans will always be worth a day's food.

          No point in planning for an apocalypse after which Walmart is still open, but only takes Krugerrand.

          In states where it is legal for us to do our own growing; at that point weed will continue to be one of the big local currencies, as will physical labor and other favors (CGA is the order of the day, where C is cash, G is grass, and A is Ass (which can refer to other useful skills in trade in addition to giggity).

        • I wouldn't be so sure on the water. It's not difficult to make. Boil and filter is usually good enough in a crisis, and if you really need pure you can use the same home-made still for making moonshine.

    • by ceoyoyo ( 59147 )

      I come from a small town with somewhat unreliable power. All the merchants know that if the power goes out, you can take a credit card impression (with some carbon paper and a hard object to rub it, if necessary) and write down the transaction. Some even have cash registers that you can hand crank if necessary. You can also write out a cheque with a pen and any scrap of paper.

      I find it hard to believe that in the US, which is thirty years late to the chip and PIN party, you can't use an impression in eme

      • Wow. Think a littler bigger please. P.R. and many of us here in the Caribbean don't expect power for months. Still no reliable internet or phones. You going to wait 4 months to process those paper transactions? If you do I'd like to buy a car then and you can ship it to me on the same credit card. Pinky swear you get your money. I despise carrying cash but it totally makes sense that cash is king during emergency situations. Since Irma on 9/6 there are only a small handful taking credit cards on st t
        • by ceoyoyo ( 59147 ) on Sunday October 15, 2017 @02:08PM (#55373437)

          What do you think happened before every corner store had an electronic terminal? Credit cards still existed. You put all your cash, credit slips and cheques in a bag and hotfooted them over to the bank. Someone at the bank looked through them, reconciled the accounts, and gave you a (paper) statement telling you if any of the cheques bounced. If someone blew their limit on their card, that's between them and their CC company.

          Yeah, cash is pretty handy when there's no power. It's not the only option.

          It's quite funny to see these dire stories about what happens when you lose power. As if credit cards and cheques didn't exist before electronic banking terminals in every store.

    • We still have the indents on the credit cards. You could have taken the credit card numbers then punched them in at a later time. There is even an device that take the indents of the card and with carbon paper creates a receipt with the card number on it.

      Before the days of credit card, stores kept a Tab on their customers, so they can get goods and services even if they didn't have the cash on hand at the time.

       

    • Yeah, I withdrew about $500 in cash as the storms approached, but more importantly I secured supplies of water, gasoline, and non-perishable food.

      Even though we could have driven out the morning after the storm (we were lucky, the 1/2 mile of old trees along our road didn't block us in), we didn't have to. Even though the gas stations were still pumping, we didn't need them. Even though we were able to run the generator to keep the freezer going for a month with the stockpiled gasoline, that wasn't really

  • by DarkOx ( 621550 ) on Sunday October 15, 2017 @09:07AM (#55372283) Journal

    The fact is that the more tightly integrated our society become the more brittle it gets. Specialization is more efficient but it also means "no man is an island."

    Skipping intermediary exchange mechanisms like cash and doing direct transfers between accounts is faster but it also means you can't conduct exchanges when the machines that handle the accounting are not available. With cash, and even paper checks, you pay me now and I have some reasonable assurance that the money will be available for my use some time in the future.

    Here is the thing though. If we have another 3-7 day blackout like the 2003 one, cash and checks will let everyone muddle thru. Where as all electronic payments being the only means would basically cause the economy to grind to a halt. If the mainland US experienced devastation like Puerto Rico just did and it was national not regional. I don't know super volcano, DPRK EMP delivery, some kind of freak mega storm, than nobody smart is going to be interested in cash!

    Face it we would NOT come back from those events as a nation. No matter how big government gets there is no way a coordinated response could be manged on that scale, which means people would have to take matters entirely into their own hands. At that point its barter system at best and that is assuming local leadership/law enforcement can keep some kind of order. I actually think there is a possibility that would occur in a lot places. I suspect most sensible folks would realize that our survival is best served by at least regional cooperation. On the other hand I can see things going pretty mad max too.


    • That is if things remain as they are...but with advancement come advanced means.

      Tiny solar panels that can have your phone operate and transact anything is very realistic. A small foot drive generator to produce enough electricity for a minute woth of computing power is all you really need. Crude but in a situation in which electricity is out for weeks it's amazingly useful.

      The more tightly society becomes the more likely we are to cross-specialise or know many shallow details from various fields.

      When
      • > Tiny solar panels that can have your phone operate and transact anything is very realistic.

        Your phone, in turn, would need to connect to a cell tower... which will *NOT* run off of "tiny solar panels". And if it did, you're assuming that the phone network is up and running, and the computers at the banks are also connected, and up and running.

      • "In the post pocalyptic world cash and computers might actually be irrelevant. Knowledge will the most precious resource as all the vaules that contain it would possibly be lost."

        The past offers a solution here: Libraries. Knowledge is valuable enough that any reasonably sized settlement after the collapse would certainly want a school and/or library, which would include a few laptops and solar panels to run them, and people searching through the ruins would have no problem finding vast numbers of hard driv

    • by rsilvergun ( 571051 ) on Sunday October 15, 2017 @03:11PM (#55373721)
      why not stop tying basic survival to whether you've got cash on hand? Why don't we stop fighting among ourselves (while the rich and powerful take 50-60% of everything) and actually help people out when disaster strikes instead of blaming them? I know, I know, the answer is literally in the last sentence I wrote, but a man can dream can't he?
  • Save coins. (Score:5, Insightful)

    by Z00L00K ( 682162 ) on Sunday October 15, 2017 @09:09AM (#55372287) Homepage

    Since when you get to a situation where you don't have any choice anymore but cash then coins are the best alternative. It's tough to get change from the shop keepers if the power goes out.

    But also realize that shops can't even do anything when the power goes out because everything has barcodes, a carton of milk and a loaf of bread will be impossible to buy.

    • Re:Save coins. (Score:5, Insightful)

      by Misagon ( 1135 ) on Sunday October 15, 2017 @09:24AM (#55372319)

      Shops will still have price labels, if not on the goods themselves then at least on the shelves.
      Electronic shelf labels with LCD's or e-paper run on batteries - not the grid - and battery lifetime is on the scale of five to ten years.

      • by Z00L00K ( 682162 )

        Won't help you at the checkout.

        • It will, because the store will have the possibility of making hand-written price lists of every item in the store for all checkouts.

          Hey, nobody said it would be easy or quick.

          • by snookiex ( 1814614 ) on Sunday October 15, 2017 @10:20AM (#55372535) Homepage

            Let's face it, this had to happen eventually: Millennial slashdotters. Wait until they discover that you can listen to music without internet.

            • I was listening to music before 8-bit home computers came out. Try again.

              Think of what I said. Writing down, by hand, the price of EVERY item in a grocery store. Multiple times, as many as you have checkouts at the store. You'd have to shut down the store just to wait for those lists to be ready.

              Then every single item people purchase would have to be checked on those long hand-written lists. It could take what, up to a minute to locate an item on the list? Average 15 items per customer, that's 15 minutes to

              • by sconeu ( 64226 )

                If you're as old as you claim, you remember the proper solution. Get a labeler and individually price items.

      • And those e-paper labels only need power to change the image being displayed.

    • Re:Save coins. (Score:5, Insightful)

      by Kludge ( 13653 ) on Sunday October 15, 2017 @09:37AM (#55372367)

      With cash and coins in circulation, it does not matter whether shopkeepers have coins or not, they can request them from their customers. Last week the guy ahead of me in line tried to pay with a 100 dollar bill, but the store keeper did not have change. I gave the guy 5 $20 bills and took the $100. He paid and left, as did I.

      People have been selling milk and bread for thousands of years without barcodes or machines that read them. You just have to know the approximate price of the item, and take the money. It's not rocket science.

    • The power went out for a week in my area a few years back during a winter storm. I could only find one store open, a convenience store, where the guy was entering transactions in a notebook. I bought some very expensive D cell batteries (with cash) that day.

      After sticking it out for a day I had to leave my home because I (normally) have electric heat. Luckily I had enough gas in my car. I'd be shit out of luck if I didn't because no gas stations were open. All the pumps now depend on electricity to operate.

      • by spudnic ( 32107 )

        Just wait until all of our cars are electric only. Can you imagine Florida after a hurricane or California after the next big earthquake? Are the California legislators going to allow exemptions to the electric only car mandate to government agencies?

  • Or fiber lines (Score:5, Informative)

    by Jarik C-Bol ( 894741 ) on Sunday October 15, 2017 @09:12AM (#55372295)
    Same situation applies to internet connectivity. I live in a smallish (6000) town, and about once a year, some knucklehead will dig without calling and cut the main fiber line, knocking at least half the county offline. At which point, all businesses become cash only, resulting in an embarrassing number of angry people blaming retailers for 'not having a backup' (to a main trunk line?). Hilariously, a few atm's in town won't even work in this situation, because the apparently phone home to confirm transactions. About a business day later, its fixed, but it sure is an uncomfortable reminder how dependent we've become on electronic money.
    • I've found you can reliably run a low/moderate magstripe transaction flow (10 txn/minute) over even a 2G EDGE modem. Remember, these technologies were designed and deployed when everything was "trunked" via ISDN or even 14.4Kbps modem.

      The statement that you can't run a credit or ATM transaction when the fiber is out is like saying you can't light a candle because you don't have a flamethrower and it would be ridiculous to have a "backup flamethrower".

  • by DontBeAMoran ( 4843879 ) on Sunday October 15, 2017 @09:15AM (#55372305)

    When some generator-powered ATMs finally opened, lines stretched hours long, with people camping out in beach chairs and holding umbrellas against the sun.

    So... they were connected to generator-powered networks?

  • by wisnoskij ( 1206448 ) on Sunday October 15, 2017 @09:21AM (#55372313) Homepage

    Has nobody seen Home Alone 2? Using electricity to process a CC purchase is relatively new. This is a solved problem.
    https://www.youtube.com/watch?... [youtube.com]
    The problem is not with credit cards, but incompetent cashiers and owners who cannot handle changing situations.

    • by nomadic ( 141991 )

      I'm not that old and I remember a time when credit cards were always processed by hand, with that little credit card mimeo machine. I still run into that every once in a long while when someplace's credit card scanner is down.

    • by Misagon ( 1135 )

      The issue is not about credit cards - but about debit cards.
      A debit card does not imply credit. You can have a debit card linked to your bank account without being eligible for credit.
      But yes, people often say "credit card" when they refer to any kind of payment card in general.

      Many countries have never had the manual slip system -- they have only ever used electronic transactions. Some cards are even chip-and-pin only, where the only type of card transaction available is a secure payment.

    • by DogDude ( 805747 )
      Those things are how merchants get ripped off. Use one of those for more than a few hours, and the thieves will be there with fake credit cards by the dozen.
      • no problem. only do business with your known customers, all the cashiers at the stores I visit regulary recognize me, even the assistants at the hardware store. if you want to be a little more generous and risky, have unknown people show multiple ID, take down their address and drivers license number.

        • by Sigma 7 ( 266129 )

          Under normal situations (power outages don't count), Visa and Mastercard rules prohibit asking for ID as part of credit card transactions. Such ID may only be required if it's required to complete the transaction itself, not because they use the card.

  • by markdavis ( 642305 ) on Sunday October 15, 2017 @09:27AM (#55372331)

    >"In a Cashless World, You'd Better Pray the Power Never Goes Out"

    Or malware. Or a network problem. Or ID theft puts a freeze on your accounts. Or someone maliciously attacks your records. Or your device/card/whatever dies for some reason. Or you need to transact with someone who just doesn't have the necessary technology.

    In a cashless world, you also give up every last bit of privacy left, because you can neither sell nor buy without the mark of the b..... I mean, without the tools and permission of the government and big business. Everything you buy and sell will be recorded and available for review immediately and any time in the future- revealing not only what you buy, but from whom, when, and where you have been. It also makes it easier for someone to tamper with those records to assist in framing you.

    Don't be quick to give allow cash to disappear, you might regret it and there will be no going back.

    • Re: (Score:3, Insightful)

      I tend to agree here. There' are several good reason to keep paper notes. And by using them you keep them relevant, so don't be afraid to swing by your favourite ATM and take out a few bill now and then.
      • >"Don't be afraid to swing by your favourite ATM and take out a few bill now and then.

        I am fascinated by young people who not only carry no cash at all, and often think cash is outdated and stupid, but also have absolutely no idea why that premise is potentially dangerous and why/how cash can be a good thing.

  • Cash registers need electricity, and cashiers won't do transactions if they're not working.

    Maybe you could go to a yard sale or something?

    • amazing news for all you young-un's, most credit cards can be used as payment with no power! when I was a kid that's the only way they were taken. number, security code on back, customer's signature...you're good to go and get your money from the payment processor

      • True, so cashless + no power could still work! But then they still won't let you if they can't get an official record for the good or calculate the proper price/tax. I can't remember the last time someone actually pulled out a binder with the appropriate info and did an on-paper tabulation with carbon copy. Lately I've just been refused and told to go to another outlet with power if that happens. Haven't seen it in 10 years, that's just anecdotal though, anyone else have any experiences they can share?

        • I did have my credit card taken manually a couple years ago at a ethnic grocery store when computer system down, those chinese merchants aren't going to pass up chance to collect money. hey they even had little hardware and housewares section...might be useful to remember

        • So the ones who are willing to bring out the old school binders and pencils when the shit hits the fan will be the ones who survive and thrive during the emergency.

  • by DogDude ( 805747 ) on Sunday October 15, 2017 @10:23AM (#55372547)
    What about the Amazon shut-ins? I've read plenty of people on this very website, who state that they hate interacting with other people, and they only order from Amazon. What are those malcontents going to do without power? They're certainly not going to a store.
  • by DogDude ( 805747 ) on Sunday October 15, 2017 @10:33AM (#55372591)
    Visa/Mastercard get 2.5% of the ENTIRE ECONOMY in a cashless world. People who don't use cash don't think about this and apparently don't care.
    • In a world that is creditcard-only, yes. In a country with saner financial regulation, I've got a debit card that costs a fixed amount per month (actually the bank account it's linked to has a fixed price for debit card+internet banking+all other features of the account) instead of having to pay a % per transaction.

    • So US need better banks with reasonable prices. What else is new.

      But when that it said, The cost of handling cash for a business is around 2% when you include handling, storage and security.

    • by Kohath ( 38547 )

      No they don't. According to this Federal Reserve Survey [federalreserve.gov], they get a lot less than that. And that fee is only on card transactions, which are a small fraction of the "entire economy" [federalreserve.gov].

      Why are you lying to people about it? That's the more important question.

      • by DogDude ( 805747 )
        Dude, that's just one debit fee. There are more fees on top of that one. Cards run as "credit" have an average 2.5% interchange base rate.

        And those studies show that card usage is through the roof. I don't know what point you're trying to make here.
        • by Kohath ( 38547 )

          Dude, that's just one debit fee. There are more fees on top of that one. Cards run as "credit" have an average 2.5% interchange base rate.

          Visa and MasterCard don’t get the other fees. And the fees don’t average 2.5% of the total of all card transactions.

          And those studies show that card usage is through the roof.

          "Through the roof" notwithstanding, card transactions remain a small fraction of the "entire economy".

          I don't know what point you're trying to make here.

          My main point is: stop lying to people.

  • by jenningsthecat ( 1525947 ) on Sunday October 15, 2017 @10:58AM (#55372691)

    Back before ATM's and the Internet, banks would run out of cash in times of unexpected demand. And in a disaster situation, people sure as hell aren't making bank deposits. The situation would have been a little better back then than it is now with 'electronic money', but probably not a lot. There still would have been a shortage of the means to exchange 'abstractions of value'.

    Arguably, we COULD have it better today, with sufficient backup and redundancy - generators and batteries, radio data links, etc. - but haven't invested enough to make it happen. Then again, given a few massive EMP's, all bets are off.

  • It just goes to show that...

    Cash is still king.
    Grass is keen.
    Ass is queen.

  • and solving our power grid problems we air drop cash? Also, one of the first things you do after a disaster is restore power, and if you haven't even done that you shouldn't be talking about money. We should just be sending food, water and medicine, not cash. Then get the power back up and _then_ we can start talking about fixing up the economy.

    At the risk of getting down modded into oblivion I'll say this: This is less a real problem and more a symptom of the current ruling party not providing aid to Pu
    • Sending air drops of cash will cause nothing but massive fighting for a worthless resource. The situation in Puerto Rico resembles a post-apocalyptic world. In a post-apocalyptic world cash will have NO value other than being a fuel source for warmth. In a post-apocalyptic world, the ONLY things that will have real value will be the basic necessities: food, fuel, water, and shelter. We might add defensive weapons and ammunition as well because, in the absence of rule of law, the laws of nature prevail: kill
      • the wealthy places in PR (mostly tourist spots and a few odds/ends neighborhoods of the rulers) have already recovered and have electricity, water, food, etc, etc. We're air dropping cash for those people. We took care of the well to do. We always do.
    • Normalcy of economic interaction keeps law and order alive. You can't immediately switch the entire distribution system on the Island to being charity based.

      It's a symptom of people still having some common sense ... so maybe it is a symptom of your current ruling party.

  • I feel very badly and have donated money and non-perishable goods. I am appalled that Puerto Ricans are being treated as a second class citizens. Donald Trump even believes that Puerto Rico is foreign country and does not deserve our help. Sadly, the situation in Puerto Rico is a glimpse into what society would look like in a post-apocalyptic world. This is our chance to do right by PR and develop plans to manage disasters. We still have not learned from Katrina, Rita, and even Sandy. The aftermath of Katri

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