Bitcoin

The Real Power of Cash Is Its Anonymity

Getting rid of the $100 bill is one more trim on our freedom to be left alone.

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Old Pics Archive on Twitter

Note: Corrected cost of a hit of acid at 5:54 P.M.!

In USA Today, Glenn Reynolds of Instapundit discusses the mad drive by former Treasury Secretary Larry Summers (and many other bright boys) to get rid of large-denomination currency notes.

What is a $100 bill worth now, compared to 1969? According to the U.S. Inflation Calculator online, a $100 bill today has the equivalent purchasing power of $15.49 in 1969 dollars. Likewise, in 1969, a $100 bill had the equivalent purchasing power of $645.55 in today's dollars.

So even if we brought back the discontinued $500 bill, it wouldn't have the purchasing power today that a $100 bill had in 1969, when larger denominations were discontinued. And carrying around a $100 bill today is basically like carrying around a $20 in 1969. As The New York Times put it after Summers' announced his plan, "Getting rid of big bills will make it harder for criminals to do business and make it easier for law enforcement to detect illicit activity. …There is no need for large-denomination currency."

To which Reynolds notes two things. First, inflation!

Reading this got me to thinking: What is a $100 bill worth now, compared to 1969? According to the U.S. Inflation Calculator online, a $100 bill today has the equivalent purchasing power of $15.49 in 1969 dollars. Likewise, in 1969, a $100 bill had the equivalent purchasing power of $645.55 in today's dollars.

So even if we brought back the discontinued $500 bill, it wouldn't have the purchasing power today that a $100 bill had in 1969, when larger denominations were discontinued. And carrying around a $100 bill today is basically like carrying around a $20 in 1969.

Second, anonymity!

Cash has a lot of virtues. One of them is that it allows people to engage in voluntary transactions without the knowledge or permission of anyone else. Governments call this suspicious, but the rest of us call it something else: Freedom.

I'm less taken with the inflation argument, not because inflation doesn't matter but because overall purchasing power proceeds apace, thanks to technological innovation and gains in productivity. When you think of all the great crap that's available to virtually everyone in today's world, I'd much rather be middle class today than upper-middle-class in 1969. Somewhere on this page is a picture of some hippies selling LSD at Woodstock for $1.00 a hit (the brown acid cost less, I'm sure). That would be around $65 today $6.50 today, according to a straight-up inflation calculation. But as numerous folks on Twitter informed me, to the extent that acid is still around, it doesn't cost anywhere near that much and is probably better quality (thanks drug war, for nothing but human misery!).

The anonymity argument strikes me as more meaningful, and not because I'm an international drug dealer or collector of rhino horns or anything like that. The right to do what you want without being tracked and followed or subject to someone else's accounting—that's a pretty good right and it's one worth preserving or at least thinking through fully before getting rid of it. Privacy isn't about hiding bad stuff. It's about, well, privacy. And in many cases, as Reynolds notes, freedom flourishes in private settings and does less well in forced public settings.

Read the full article.

Related vid: Is Bitcoin the great libertarian hope or has it been co-opted by Wall Street?

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  1. That only matters if you have nothing to hide.

    /Derp

    1. Which must explain why people with nothing to hide nevertheless use an envelope when sending documents through physical mail.

      ‘Course, we’ve raised an entire generation with virtually no expectation of privacy whatsoever (Internet and all). I expect that when they end up banning the $100 bill, hardly a peep of protest will be heard.

      For another angle, getting rid of cash completely would cause the so-called “black market” or “underground economy” to implode. Sounds like a great idea for the government, but someone should inform TPTB that such an implosion will have highly negative effects in the “above-ground” economy.

      1. If somehow cash could all of a sudden be eliminated, it would cause some trouble to black markets. But they would soon find something else that can be used as currency for illicit transactions. Currency doesn’t exist because governments decided it should.

        1. See Tide brand detergent.

        2. See how fast government can seize your wealth because you’ve put it in the form of something that can be used for currency, which, of course, will be outlawed.

        3. But they would soon find something else that can be used as currency for illicit transactions.

          And that something would soon be illegal.

      2. We buy about $400 of groceries every two weeks, so I get 3 $100’s and $200 worth of $20’s to give my wife. A bill between $300 and $400 can then be paid with 3 to 8 pieces of paper. That many $20’s doesn’t fit in my wallet very well.

    2. That only matters if you have nothing to hide.

      Yeah. Like no money or other wealth to hide from the thieving government.

      1. This message has been approved by Broke-Ass Losers for Bernie Sanders

  2. That would be around $65 today

    I think you might mean $6.46~$6.50

    1. Give him a break, he’s an English major.

    2. This is what happens when the jacket goes to get some coffee and leaves Nick to think for himself.

    3. Decimals, how do they work?

    4. He probably has small hands and fingers.

  3. If you suggest that the government wants to do away with physical cash and that they have basically made it criminal to deal in large amounts of it, most Americans look at you like you are a nut.

    1. It is true nonetheless

      1. The sheeple went along with Woodrow Wilson approving the Federal Reserve, and FDR outlawing gold coinage; I’m suprised that most folks aren’t clamoring for government controlled digital currency too.

        1. Give it some time and they will.

        2. Unfortunately, that will certainly come.

  4. How about focusing on a currency change that actually makes sense, like eliminating the penny?

    1. How can they make cents without pennies, you madman?!

      1. What in history’s long record tells you that governments want to make sense?

        1. Why make sense when they can make cents?

    2. Worked well in Canada. Can’t say I miss the copper.

    3. [insert joke about how we would then not be able to pay a certain commenter’s mother for past and future services rendered]

      1. Use a nickel, buy a lifetime pass.

    4. What are you, some kind of a communist?

    5. eliminate the nickel and dime too. Would save a lot of time at McDonald’s if they rounded everything to the nearest quarter, like movie theaters do.

      1. The last time I went to the Regal Theater in Nashville the ticket price was $9.61. So much for doing away with pennies.

    6. The government would dearly love to do away with coinage – it is already costing more for the metals in it than what the face value of the coins are. Why do you think they passed a new law a few years ago making it illegal to melt down coins or even to transport large amounts of them out of the country? The US penny hasn’t been made of copper since 1982; it is now made mostly of zinc – same crap that flashlignt batteries used to be made of – and still the government can’t afford to make it?

    7. There is a reason that the Constitution specifically enumerates the power to COIN money. They had plenty of experience with notes and banks.

      The second we chose to destroy our coinage – we lost our ability to a)escape whatever stranglehold banks chooses to exert over money and b)escape whatever stranglehold government chooses to exert over transactions.

      Getting rid of the penny is not a solution to anything. Recoining silver coins with a face value that is higher than the metal value is the only alternative to monetary slavery.

  5. “Somewhere on this page is a picture of some hippies selling LSD at Woodstock for $1.00 a hit (the brown acid cost less, I’m sure). That would be around $65 today”

    Agree with the overall point of the article, but I think you’re off by a factor of 10 there. That should be around $6.50 today.

  6. Uhhh… Did Glenn Reynolds quote you quoting him, or the other way around?

    Block Quote fail, or Nick doesn’t understand paraphrasing very well?

    1. There’s a glitch in the Matrix

    2. He took the 16 cent brown acid.

    3. He RT’s me all the time, but still hasn’t followed me.

  7. Somewhere on this page is a picture of some hippies selling LSD at Woodstock for $1.00 a hit (the brown acid cost less, I’m sure). That would be around $65 today, according to a straight-up inflation calculation.

    math continues to be hard.

    1. Also hard: originality.

    2. Barbie says: Math Class is Tough
      https://www.youtube.com/watch?v=NO0cvqT1tAE

  8. Since plenty of people have complained about the arithmetic error, I’m going to say that the acid in 1969 was almost certainly better quality than what you are likely to encounter today.

  9. Governments call this suspicious, but the rest of us call it something else: Freedom.

    I imagine the government figures I have something to hide when I go to the bathroom, being that I close the door.

  10. How is $1 in 1969 worth $65 in 2016?

  11. Back in my all acid was approved by Tim Leary himself before it was sold, and it was always free.

    1. This comment could use some editing.

      1. I’m sure it makes more sense when you’re tripping balls.

        1. One Agile Cyborg is already too much.

          1. One Agile Cyborg is just enough.

            1. John’s benepropisms and AC’s puddles of consciousness are what make HnR great.

  12. “The needs of the many outweigh the needs of the few.”

    Top

    Men.

    1. If the many don’t need something they’re free to not use it without actually banning it. This is a concept the many always fail to recognize.

  13. Hey has anybody checked Nick’s math in the alt-text?

    1. Everyone has.

      math is hard.

      For Nick.

      1. You Know Who Else was hard for Nick?

        1. This one has to be Hitler

  14. so Yogi was right in saying that a dime ain’t worth a nickel any more?

    1. He made sense a quarter of the time.

  15. I especially liked Summers’ completely disingenuous denial of the government’s wish to eliminate cash completely.

    1. Not entirely sure how he’ll deal with the tens of millions of people in this country who rely upon cash because they don’t have the credit profiles to get access to electronic financial services. Not his problem, I guess…

      1. thats where a new federal bank will come in need, and be like Obama care where everyone will have to use the federal bank or be fined I mean taxed

        1. “Let me be clear: if you like your checking account, you can keep it!”

  16. Maybe I’ll pay my property taxes with two dollar bills.

    1. Just coming from the horse track, are you?

      /Grampa

      1. I have a pocket full of $100s because I hit a small progressive pot at the casino.

        Getting paid in $20s would have involved banded stacks.

        Fuck that.

        1. Palin’s Buttplug would like to invest.

  17. I’m going to buy a pistol from another private citizen and pay for it with hundred dollar bills.

    FUCK YOU, LARRY SUMMERS AND BARACK OBAMA.

  18. It’s posturing for the big run on banks.

    1. When the bureaucracy implodes, will you have permission to spend your money?

    2. It’s preventing the big run on banks. When your bank account is nothing but a bunch of ones and zeros in an electronic database, the Fed can more easily control the money. You don’t like the idea of the negative interest rates that mean you’re going to be paying the bank to keep the money safe and would rather just keep it under your mattress? Surprise! You’re the one the banks have to keep the money safe from, you idiot. Oh, you thought it was *your* money? Guess again, chump. Take a look at a hundred dollar bill – you see your name on it anywhere? Whose name do you see on it? Getting rid of cash has nothing to do with drugs or terrorism, it’s all about keeping you filthy uneducated boobs from getting your grubby little paws all over the Fed’s nice clean monetary policies and fucking them up. You and your damn “freedom” are why the central planners never can quite achieve the economic paradise their models show are right around the corner, just the other side of that cliff.

    3. It’s also posturing for the huge tax increases that will come when the Dimwitcraps win the White House again.

  19. Remember when you’d tell a nosy person, none of your beeswax ! Course that was back when I wore an onion on my belt.

  20. Privacy isn’t about hiding bad stuff. It’s about, well, privacy.

    Amen.

  21. Running a mid to high end casino without hundos is going to be an absolute nightmare.

  22. It’s not like people are going to abandon the banks when they find out their deposits are actually losing value because of negative interest rates. That would be crazy.

    1. Yeah, craziest damn idea I’ve ever heard. I’ve been waiting for them to come to their senses and raise interest rates; now they’re trying to figure out how to get interest rates below zero. Are these people fucking insane?

      1. Are these people fucking insane?

        If you throw in the word “batshit,” I think you’ll just about have it nailed.

    2. Did you read about how physical safes sold out in Japan recently when they went NIRP?

      http://www.wsj.com/articles/ja…..1456136223

      Yes, they are abandoning banks. No, they are not crazy, not after the decades of central planning malfeasance the Japanese have suffered under.

  23. If you have nothing to hide this shouldn’t concern you. What are you, a heroin dealer or a human trafficker? I for one am willing to give up my paper bills even if it means you people will have to stop selling white virgins to Uganda.

    1. White virgins? PLURAL?!?

      There ain’t enough Hundos on Earth to pay for that scarce a commodity…

  24. Yeah, Anonymity is pretty cool like that dude.

    http://www.Anon-Net.tk

  25. The right to do what you want without being tracked and followed or subject to someone else’s accounting?that’s a pretty good right and it’s one worth preserving or at least thinking through fully before getting rid of it.

    The only right in question is the right to use whatever currency or money you and the other party in the exchange care to use. That right was abrogated long ago. This is a debate over the proper rules of an illicit banking cartel.

  26. this has nothing to do with crime but everything to do with Taxes. a cashless society the government can tax everything and monitor every yard sale purchase and of course move the underground economy even further underground.

    1. A cashless society will never exist.

      Even if the government eliminates cash someone else will come along and fill the demand for it.

      Hell, it would be kind of funny if the government push for a cashless society is what finally brought about sound monetary policies as the private alternatives moved in to fill the void and were forced to compete.

      1. I think it’ll be practically impossible for a private party to print real physical, paper cash. The cash needs to be high security enough that it cannot be easily counterfeited, and nobody will want to spend the capital on equipment to print such cash if the gov’t can swoop in and arrest them all at any time. Small presses that could be hidden or moved can’t print enough volume to make it worthwhile.

        What’ll probably happen is that we will start using physical cash of some other state (just as Argentinians and Venezuelans are using paper US dollars now), such as using Chinese paper yuan here in the USA. As long as there is one state in the world willing to print high-security paper cash, we’ll be okay.

  27. “The right to do what you want without being tracked and followed… ?that’s a pretty good right and it’s one worth preserving…” That goes to the heart of the matter, and is exactly right.

  28. We could head this off in a moment if we started advocating they put Hillary or Lena Dunham on the hundred instead of Benjamin.

    1. Can’t put a sitting president on US currency. A fat queen sitting on the throne I’m not so sure about.

  29. “…worth preserving or at least thinking through fully before getting rid of it.”

    Are you kidding me? So you’re okay with getting rid of anonymous free trade transactions as long as we “Think” about it for a while?

    No. It’s NOT okay to force me to use a transaction method that others can track. Not because I’m doing anything wrong, but because I’m FREE! Supposed to be, anyway.

    Grandma in W. Virginia: “Why are Democrats trying to suppress my buying things!!!! I aint got no credit card. Alls I got is cash.”

    Moral. Nobody ever died from not voting. Not being able to buy food? Yes!

  30. ” I’d much rather be middle class today than upper-middle-class in 1969. “

    Sure, but I can tell you for a fact that someone who is upper middle class today would have a hard time affording the lifestyle of even middle class Americans could in the late 80’s to early 90’s. Sure they have access to technologies and toys that even the super rich didn’t have back then but in terms of purchasing power we peaked somewhere around 1995 and have been slowly sliding back ever since.

    1. someone who is upper middle class today would have a hard time affording the lifestyle of even middle class Americans could in the late 80’s to early 90’s

      You think?

      1. IMy household income puts me solidly in the top 10% (last I checked it was around the 7th percentile), when I was a teen my parents combined incomes put our family at around the 25th percentile. I grew up in the suburbs of Boston in a family of 5, I currently live in the suburbs of Boston with a family of 6.

        Growing up in the 80’s we had most of the luxuries available at the time, cable tv, a computer, video game system, etc and my parents always drove late model cars. My parents were easily able to afford all of that and still leave money aside for retirement savings, rainy day funds, and yearly vacations, some of which were fairly expensive.

        Today we have cable and about a $250 a month cell phone bill and while we currently have 2 late model cars that is solely because the 10 and 15 year old cars we had been driving had to be replaced within the last 3 years. I am making the minimal savings for retirement of putting enough into a 401k to max out the company match but it is nowhere near enough and I’ve only been able to start doing that in the last 2 years, things like vacations are pretty much out of the question. A long weekend at a campground is about the best we can muster and we don’t manage that every year. Finally while we aren’t quite living paycheck to paycheck it is pretty damn close.

        So, while I have more toys and tech than existed when my parents were my age, maintaining the equivalent lifestyle with a significantly higher relative income is impossible.

        1. I have to wonder, it is because purchasing power is lower, or because there are more things that you are required to or expected to spend money on? Especially when you have kids. Seems like the cost of having kids has gone up a lot over the time period you mention too. Largely because of increased government meddling (you really need a fucking car seat for a 5 year old?) and increasing education costs.

          I really don’t have an answer and I’m not trying to say you are wrong. It always surprises me, though.

          1. I don’t really see how it can be the latter as that would all be part of keeping up the same relative lifestyle.

            I mean it would be one thing if I was arguing that all of the luxuries that I do have were necessities and whining about why I couldn’t save money but that isn’t the argument I’m making.

            If we consider the relative lifestyle of someone who was at the 25th income percentile in 1985 and again in 2015 and then consider someone who is at the 10th income percentile at those 2 points the person at the 10th income percentile should always have a higher standard of living and yeah while I have a fairly expensive data plan it is pretty much the only category of luxury that I have today which did not exist in 1985 and it is counteracted by the fact that my parents Phone Bills routinely ran more than $80 a month after long distance charges were factored in and in today’s money that is closer to $160 so the relative cost difference spent on “telecommunications” is only about $100 of 2015 dollars and adding $100 a month to my savings is not going to make very much of a difference on the retirement and vacation front.

            That said, yeah the cost of raising kids is definitely WAY higher than it was and has risen significantly faster than inflation and so that may be the entire difference there.

            1. nice bit there.

              libertarians don’t know what they think.
              OMG everyone is better now, then at the same time The FED is taking our money via inflation.
              or
              cost of inflation is nill and our tech is awesome and cheap now vs shadowstats inflation, no real wage gain in 20 years for most, and all the regs and extra bs fees and taxes we have to deal with now.

              I need to know which way is it. I make 40k a year and am looking at 100k meh houses in a commuter town. I do the math and it makes me feel poor. I have plenty for 20% down.
              is packing all your meals in advance and not getting cable and getting a roomate normal?

              white male 25 with a BS.

  31. Ban the hundred dollar bill now, when it’s worth about 20 bucks? We used to have 1,000 dollar bills.

  32. That inflation calculator is bullshit. In 1969 the official (government controlled) price of an ounce of gold was $35. Even a year or so later when we went completely off the gold standard the world free market price or spot was less than $100. I know for a fact, because I could buy uncirculated twenty dollar gold pieces for anywhere from $75 to $85 apiece back then, and each one contained approximately one ounce of gold. Today the spot price of gold is about $1200 per ounce, and a one ounce gold bullion coin – not a numismatic one – sells for less than $1300 on Ebay.

    In short, $100 in 1969 had far more purchasing power than $645.55 in today’s money – more like twice that amount. Or to put it another way: a Benjamin today has a good deal less purchasing power than $15.49 did back in 1969.

    1. Also, if it had been legal in this country to hold ordinary gold bullion coins or bars back in 1969, one of them would have sold for a lot less than the $75 to $85 a collector’s grade Twenty cost at the time. Numismatic coins always sell for a premium over face value.

    2. What makes you think that the value of gold stays constant? You can buy a hell of a lot more anything with $1200 today than with $35 from 1969.

      1. Not gold you can’t. Its value stays a helluva lot more constant than the purchasing power of fiat money – which, of course, is exactly why it has always been desirable as money and a store of wealth – and exactly why the thieves in charge of economic policies hate it so much. If there is anything out there that you can buy more cheaply in terms of today’s money than in terms of 1969’s money, it’s no thanks to the government’s and the Fed’s inflationary monetary policies, but rather due to an increase in efficiency of production.

        1. In fact, sell that ounce of gold purchased for $35 back in 1969 for the $1200 of today’s money. If you can buy more with it than you could in 1969, it just means that the value of gold has gone up in terms of purchasing power – but certainly not because there is less gold in the world today than back then – there’s more – but because goods and services are more plentiful and less expensive to produce today. That’s in spite of the government’s swindling everyone with its monetary policies. If it weren’t for the burden of government’s constant chiseling away at the value of the dollar, you’d be able to buy even more with that $1200.

          I’m old enough to remember the 60’s and the 70’s, and the grand discussions by all the government experts about the real causes of inflation. I remember, too, what the experts’s advice was: the American People should work harder , spend less, and increase production. Right – so the fucking thieves running this country could continue stealing without everything collapsing!

      2. Btw, that $35 for an ounce of gold back in 1969 was an artificially controlled, low price; it was the price at which the US government would redeem paper dollars held by foreign countries. On the open world market an ounce was worth considerably more – which soon became evident when our government defaulted and went completely off the gold standard.

        Nixon took office after a period of high monetary inflation under LBJ and Kennedy. It was so bad that Johnson’s administration even had to take the silver out of our coins by 1965. If I recall correctly, it was France who started the run on the US Treasury to redeem a large store of paper dollars for gold. For a short while a two-tier pricing system was tried with one, lower price for government redemption of paper dollars and a free floating, but higher price for gold on the world market. Seemed to make matters worse and put even more pressure on the Treasury’s gold supply – to the point where Nixon finally had to disengage the dollar from gold.

  33. Second, the incredible irony in all of this is that while banning cash would merely make life inconvenient for petty criminals, it would making government economic tyranny and elitist theft exponentially easier. Crime agains average people would explode as a result. It reminds me of the quote attributed to Aesop:

    We hang the petty thieves and appoint the great ones to public office.

    http://libertyblitzkrieg.com/2…..-cashless/

  34. “…that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name.”

    Who could be against that?

    1. The US gov’t is against it. All gov’ts hate competition (hence their attempted-monopoly on force), and Satan is very much a competitor.

  35. You know what else makes it easier for law enforcement to detect illicit activity?

  36. Once again, our local American proggies are just copying their European “betters”:

    Scandahoovia wants to ban cash

    “Today, there is approximately 50 billion kroner in circulation and Norges Bank can only account for 40 percent of its use. That means that 60 percent of money usage is outside of any control. We believe that is due to under-the-table money and laundering.”

    — Get this: “That means that 60 percent of money usage is outside of any control.”

    And to him it’s obvious that is a problem,

  37. “I’d much rather be middle class today than upper-middle-class in 1969.”

    But I’ve been assured that thanks to repeated elections of libertarians to national office, the American middle class has ceased to exist and that every single person is now either part of the 0.01% of bazillionaires or a starving peasant digging for potatoes with their fingers out in a barren field.

    /sarc

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  39. Really, we should all just go to work and work according to our ability and let the government take everything, then go to the stores and only buy according to our needs using our government issued tracking, er, credit cards. (Feel the Bern.)

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  43. A refrigerator cost $470 in 1962, which is $3,687.10 in today’s dollars. I can buy a much better fridge today for $700, which is $89.23 in 1962 dollars. I think maybe just comparing currencies inflation values isn’t a good indicator of anything.

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