Happy New Year via the Paradox of Banknotes

Happy New Year!

Believe it or not, there are some reasons to be cheerful.

Evidently the roll out of CBDC is not progressing smoothly. Resistance in countries like Nigeria, India, China the US and in Europe is emerging. It seems the “Paradox of Banknotes” is happening everywhere.

Sometimes called the “currency demand paradox,” the demand for cash—people taking it from banks—increases while the use of banknotes for retail transactions decreases. It seems this is happening in countries around the world. I suggest we should take some encouragement from this.

In India for instance, while card payments are increasing as a percentage of all payments, the demand for cash is simultaneously on the rise. Despite the governments effective removal of 86% of Indian cash rupees in 2016, there was a 16.6% increase in cash circulation in 2021 and cash use remains strong in 2023.

According to the Reserve Bank of India (RBI):

Since cash and digital modes are generally expected to substitute each other, the simultaneous rise in both seems counterintuitive.

According to the BBC:

India is not an exception in experiencing concurrent growth in both digital currency and physical cash.

The official explanations for the cash paradox are convoluted and highly questionable. Mainly because, when it comes to cash, the bankster parasite class doesn’t really know what it is being used for, where or by whom. The European Central Bank (ECB) has come up with all sorts of complex theories involving the velocity of money and M1, 2 and 3 money supplies, as it flounders about trying to understand the seemingly inexplicable.

Some of the “paradox” money is thought to be held by Multinational Financial Institutions (MFIs) but we are in the realms of guess work here. Stating that “between 27.5% and 50% of the value of banknote circulation is thought to be stored in the euro area” is tantamount to the ECB admitting it doesn’t have a clue.

All we can say is that the demand for cash surged across Europe during the pseudopandemic. Again there are many reasons for this but only a few analysts are willing to confront the underlying reality: people don’t trust banks, especially in times of crisis.

The payment industry consultants at CashEssentials stated:

The majority of central banks are currently focused on the development of central bank digital currency (CBDC). [. . .] [C]entral banks shouldn’t put all their stakes in it. The trust in physical cash has been evidenced regularly during global uncertainties, whatever their reason. There is a question mark whether this trust in physical cash can be transferred into a digital currency.

Accompanying the global push towards CBDC, and CBDC based commercial digital and cryptocurrency coins and tokens, there is undoubtedly a war on cash. For example, in 2015 there were 70,588 ATM cash machines in the UK. By June 2023, there were 49,421 of which just 38,612 were free to use. Between 2012 and 2022, the total number of high street banks and building society branches fell by 40%. Here in the UK, just as in nearly every other country around the world, we have been primed to expect access to cash to be further restricted.

The same banknote paradox is also found in the US. Noting the increase in the demand for cash during the pseudopandemic, the Federal Reserve Bank of San Francisco observed that the effect had persisted. In 2023 it wrote:

Although consumers are making fewer cash payments when compared to pre-pandemic, both on-person and store-of-value cash holdings remained above pre-pandemic levels in 2022, signifying [. . .] consumers’ demand for cash remains. [. . .] The consistency across these cash data points since start of the pandemic revealed what may be a new normal level of cash payments and holdings.

While the myriad of “official” explanations for the paradox shouldn’t simply be discarded, these theories are offered by the same banks and financial institutions that are committed to the digitisation of money and the economy. Without exception, they don’t want us to use cash.

The UK government has made vague proposals to supposedly ensure the availability of cash. It is also racing ahead with the roll out of CBDC and the compatible digital payment infrastructure.

It’s cash protection proposals do nothing to tackle the loss of banking facilities and ATMs provided by commercial banks and other outlets. The governments ability to force private businesses to stay open, if they claim it isn’t commercially viable, is virtually nil. In reality, the UK government is trying to centralise the distribution of cash through its own Post Offices. For many people, the Post Office now provides the nearest cash point.

Nonetheless, the record cash withdrawals from Post Offices across the country in December 2023 underline that demand for cash is solid. In addition, more people are using cash in retail transactions in the UK.

The BBC reports that the primary reason for this is better budgeting during the cost of living crisis. It also suggests that this is a temporary upswing and tells us that the “experts” say it will decline again. But this has little to do with the observed paradox because much of the cash in assumed circulation is not accounted for.

It is worth re-iterating that one of the reasons the banksters and their government partners don’t like cash is that they don’t know what it is being used for or who is using it. Their so-called “analysis” should be seen in that context.

So what else could explain the paradox of banknotes?

We now have to speculate ourselves, precisely because cash use is anonymous and can’t be easily traced. We know certain relevant facts: the demand for cash is consistent or increasing, the use of cash in retail settings is holding up, if not growing, and a lot of the cash in circulation is unaccounted for.

All of this is happening at a time when it is being made progressively more difficult the to obtain cash. Evidently, there is a sizeable proportion of the population who are willing to forgo convenience in order to keep cash in their pockets.

The ECB are among those who claim this is because people are using cash as a store of value. This may be true to a degree, but to what extent is, again, unknown.

There seems to be a reluctance—in “official” circles—to discuss the possibility that people are using cash for other reasons. After all, fiat cash devalues with the currency. In its present form, it isn’t a particularly good store of value, so why would people assume that it is?

What if people are not using it just as a store of value? What if they are using it to engage in counter-economics? That is to say, they are increasingly transacting outside of the state controlled economy.

I suggest this is worth considering, given the known paradox. Perhaps we should also acknowledge that it is not something the Establishment would ever care even to discuss, let alone admit.

Counter-economics was outlined by the libertarian Samuel Edward Konkin III (SEK3). It is a revolutionary act of peaceful resistance because, by conducting our business outside of state control, we maximise our independence to the point where we may come to realise we don’t actually need the state.

I am not suggesting for one moment that people are currently engaged in counter-economics because they are familiar with counter-economic theory. I am suggesting that there is evidence indicating that counter-economics is flourishing.

Some of us might have personal experience to anecdotally support this contention. Personally, I can tell you that a friend of a friend met some bloke at the farmers market whose cousin’s step daughter told him that her best friend’s Mum reported to her that, where she lives, more and more people are conducting person to person (P2P) business using cash. In fact—she said—there really isn’t anything that you can’t buy with cash. You barely need cards at all—she said.

Whether a growing number of people are doing so out of necessity or to deliberately circumvent an ever more oppressive state regime, the more people that use counter-economics the less power the state holds over them.

Political change need not mean standing on the barricades or sacrificing yourself for a cause. Generally, states are geared up to defend themselves against such gestures and often actively encourage them in order to claim justification for a “crack down.”

A far more powerful act of resistance is simply to live as a free, sovereign human beings—whether we are or not—and conduct ourselves as honourable, peaceable people. We don’t need to tear down the walls of the state but rather, to the fullest extent possible, build thriving communities outside of state control.

It is the small decisions we make everyday through which we can realise our collective power. Voting achieves virtually nothing by comparison.

If we consciously choose to move incrementally toward freedom, thinking about what we buy, who from and how we pay for the goods and services we need or want, then we will create markets that cater to our choices. Counter-economics will change the world if enough of us decide we want to be free and understand how to create personal freedom through our actions.

In the face of a global push to eradicate cash, a stubborn minority are holding onto it and, the evidence suggests, their number is growing. We should all take heart simply from this fact alone. The paradox of banknotes reveals that the fulfillment of globalist plans are not inevitable.

Happy New Year.

Let’s make 2024 ours.

—While we’re on the subject of cash—

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