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Saturday, January 30, 2016

Observing Sweden - Poor Man's Money


Cashless Society – 1


I bought a shirt here in Sweden last month, and paid cash.
“Do people in America still pay for things with cash?” The clerk asked.
 “I’m the only one left,” I told him. Last man standing.

I grew up in the fifties. My parents opened up a bank account for me, taught me to save. I stashed my paper route earnings at something like 3% interest . . . sixty years ago. Now banks charge a yearly fee to compensate them for the inconvenience of holding our money.

In the early sixties I ran into to two guys working with a company that was creating credit cards. They were enthusiastic. “Cash is a thing of the past,” they told me. Right. Good luck with that, I thought.

It turns out they were right . . . or wrong. I’ve never really understood the credit card convenience as I stand in line waiting for someone ahead of me at the cash register fumble with their cards, then punch in incorrect secret numbers.
It will be convenient for our governments who’ll know our every move, and for the banks, who profit from every transaction. We will be more able to spend what we don’t have. Debt is the lever that controls us all.

Excerpt from: Daily Good

Sweden Is Developing the World’s First Cashless Economy – by Mark Hay
In 1661 Sweden became the first European country to mint a national paper currency. Now, according to a report released last month by researchers at Stockholm’s Royal Institute of Technology (KTH), the nation may soon become the modern world’s first cashless society. One researcher involved estimates that by 2030 every transaction in Sweden could be digitized, thus effectively antiquating hard currency.

Sweden’s rapid shift to virtual money is especially striking because it’s not the result of one coordinated government program, but an emergent phenomenon arising from many national legal, social, and technological trends. And it’s had a host of unexpected positive effects on Swedish life, beyond just convenience for consumers, with surprisingly minimal drawbacks. Unfortunately for those in other nations who might want to experience these benefits, for now this appears to be an isolated phenomenon rooted in a uniquely Swedish experience. But as the Swedes work out the kinks in this system and create a comprehensive, proven model, the world’s doggedly cash-rooted societies may begin to move towards a cashless existence with greater speed and confidence.

Evidence of the Shift

The KTH study primarily draws its conclusions from the observable decline in the amount of hard notes in the Swedish economy. According to data from Sveriges Riksbank, or Riksbanken, Sweden’s central bank, there are currently less than 80 billion kronor ($9.4 billion) in circulation in the country of 9.6 million people, down from 106 billion kroner in 2009 (about $14.8 billion). Riksbanken has also predicted that between 2012 and 2020, the amount of cash in circulation will decline by 20 to 50. And of the cash in circulation, only 40 to 60 percent is actually in active circulation, with the rest just rotting away in lock boxes or under citizens’ mattresses. Bills and coins currently make up, at best, three percent of the Swedish economy. Put another way, there is likely less than $500 in cash per Swede in active use.

Beyond the amount of cash in Sweden, there’s also good data to show that people aren’t becoming ascetics and hermits with no need for cash—they’re just spending more digitally. This year, 85 to 90 percent of all transactions in Sweden will likely be electronic, using cards, apps, wire transfers, or some other modern mode of transfer. That number’s even higher—95 percent—for retail sales. Swedes are so heavily addicted to cards and apps (more so than any other nation) that five or six major banks in the nation have gone cashless; from 2010 to 2012, 500 bank branches moved to all-digital transactions, and removed 900 ATMs from around the nation, making Sweden Europe’s second worst country for cash machine coverage. The last reliable place to get cash in the nation is the supermarket checkout line, where you can get up to 500 kronor ($57) back per transaction when paying with a card. Even Sweden’s church collection plates have gone digital.

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