Most of the time I use this column to recommend policy changes that I believe would make the world a better place. This time I am saluting a policy change I believe will have significant benefits — one that carries with it important lessons.
The decision of the European Central Bank last week to stop producing €500 notes permanently is a triumph of reasonable judgment over shameless fearmongering....High quality global journalism requires investment.
First, the world should demand that Switzerland stops issuing SFr1,000 franc notes. After Europe’s bold step, these notes will stand out as the hard-currency world’s highest denomination note by a wide margin. Switzerland has a long and unfortunate history with illicit finance. It would be tragic if it were to profit from criminal currency substitution.
Second, the question of the facilitation of criminal activity should be placed prominently on the agenda of the Group of 20 leading nations.It gets worse:
There would be a strong case for stopping the production of notes with value greater than, perhaps, $50...The political criminal states that his reason for calling for the elimination of high denomination notes is to prevent non-political crime and, well. no one needs to use large amounts of cash anyway:
There is little if any legitimate use for €500 notes. Carrying out a transaction with 20 €50 notes hardly seems burdensome — and this would represent more than $1,000 in purchasing power. Meanwhile, 20 €200 notes would represent close to $5,000 in purchasing power.
Who in today’s world needs cash for a legitimate $5,000 transaction?...
By contrast with normal commerce, €500 notes have an important role facilitating illicit activity...
A cashless society is a very bad idea. It would mean a society where the government would be able to track all our transactions---and thus control activities,
Summers' aggressive advocacy that is moving the world toward a cashless society makes him one of the most evil economists living today.