I travel more than most, and am always interested in the economics of the countries I explore. The philosophies of Macro Economics around the planet, crashing with Micro Economics of the street - a little side-hobby of mine. Something else to rant about!
I almost ended up with a Masters in Economics…but settled for an MBA instead. Economics always holds my interest. Impossibly complex and hard to predict...it always reminded me of my Ecology studies of undergrad. ... I don't think many make that connection. :)
My thoughts: The wide spread use of USA cash around the planet – of Benjamins everywhere – the $100 bill explosion is an interesting topic. What does it all mean ?
In a strange twist of fate. Benjamin's - One hundred Dollar bills. Have a picture of Benjamin Franklin on one side, and Independance Hall, Philadelphia on the obverse. The twist; Philadelphia is my original hometown. Therefore, around the planet...people exchange, and inspect Benjamins from my birthplace. :) somehow I smile at that... not sure why exactly. just strange. Do they know they come from the Philly mint?
I’ve been thinking about this blog for a while. Noticing interesting trends, trying to connect the dots. So far,,just coming up with wild-ass guesses.
In all the 3ed world countries, everywhere I visit now – US Cash is king. Its everywhere. It is preferred by the people of these countries. The hotel pricing – in dollars, the restaurant pricing – in dollars. Make a transaction almost anywhere, and the cash register drawer pop’s open with US cash - no matter the country. Often I will get back my change in US cash. Travelers for non-US countries, have US cash in their wallet. US cash is everywhere.
In some countries, like Cambodia and Zimbabwe and Panama.. You go to an ATM, out pop’s US cash.
The currency of the poor countries is so unstable, so unreliable, inflation impossibly high – that no one wants the local cash. Their leaders have been printing it like crazy…thinking that will go on forever. No, it fails the small countries. (....and will fail the big ones if they (we) are not careful). Now, everyone around the planet wants to be paid in US currency or a Credit card in US dollars. Local cash in many countries is fast becoming useless.
When I first noticed this, it was interesting and a curiosity. But now I see it everywhere I travel. It makes me curious about where this Global acceptance of Benjamin's is going.
So,, How did all this physical US cash, all these Benjamin’s get to these countries? Its not possible to be brought in by tourists. Even now, Tourism is almost none existent…Rona Global Lockdowns have put a temporary halt to that.
So how is this cash getting to these countries? To their banks, to the stores, to the taxi drivers on the streets.
Coincidentally; at home in the US, we don’t use cash anymore. They push us to be cashless. Using and often only accepting plastic cards at stores. Everything is purchased online – with a card. At the grocery store, with a card. Sometimes, I can go months in the US without using ANY cash. This cashless America has only come about in the last 10-15 years. Before that, everyone would have at-least some cash.
I was at my US Bank just before this last adventure. I requested crisp, new, clean $100 bills for travel. As I travel the world, people in other countries want clean new $100’s. Sometimes, even refusing a Benjamin as payment if it is folded or creased.
My bank in the US - said they have NONE. They don’t get it anymore. Only these old $100’s that have been in circulation. Creased and folded. WTF ? I can’t even get my money in Cash anymore? Only in plastic ? I know they like tracking us thru our card usage, but come-on, no $100's at the bank? really ?
So, what happened to all that cash that existed in the US until recently ?
Well, the banks have been collecting it, shipping it to the Fed…who destroys it, and prints new crisp $100’s.
And I can only conclude, that ‘they’ stack those new clean $100’s on pallets, and ship it to other countries. Cash that runs their economies.
So what does the US get in return ? I don’t know? I still am guessing ?
Does the US Government get Power over their politics? Over their medical system ? over their economies ? - I think Yes to all of these!! and maybe more ?
Now play it forward to the 20’s. To current events. Inflation is now hitting hard, even in the US.
Assets in the US, in property, in company stocks, in hard assets… these all raise in value as inflation sky rockets.
But cash? It loses value. Any one sitting on cash in their wallet or bank account is losing value by the minute. And all the poor countries, running their economies on US Cash…well, they just lost value too. It now takes two Benjamin’s to pay for that oil, to pay for that medicine, to pay for that plane ride. Cash is on the run.
And just maybe, this Global US currency is being used to bankrupt the poor struggling nations - hard to understand, hard to believe. Is that even possible?
Add to that, the poor in these countries have a much different banking system than we have the US. For them; when they put $100 cash into their account…and come back next week, they only get $95 back (or less). Inflation, service fees, cost of business. The poor using the US cash around the globe lose out again.
How all this crazy economics of cash fits together is impossible to fully understand. Where does it end? What is the consequence of the planet using US cash ? … but yet, people in the US not using cash ?
..to quote an old Jimmy Buffet song that is searching for the answer:
"it's down on the beach, where the gulls preach and the Chinese buried the truth"
Like Jimmy's old song, I'm searching too. I don't know the answer; Why US Benjamins are becoming the Global Currency? What this means to the American citizens ? What that means to the 3ed world?
All I’m sure of, is that the poor lose out and the rich win again.
Thanks for reading my 'ranting' blog. If your look at the top of the page, there are menu links to all my blog posts and their categories. Take a look if you have the time.
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