Reading the ongoing comments on cashless society and AFTER just reading something on Martin Armstrong website (giving credit where it’s due), it would seem to me that ONE of the catalysts for gold/silver for them to move up again in the next few years are probably going to be the slow move to cashless societies.
Many some of us think cashless societies are bad for precious metals.
I actually tend to think it’s EXACTLY the opposite, as long as – stating the obvious – there are no risk of confiscation from governments.
Here’s the rationale for my views:
For anyone with a good amount of LIQUID assets… what are the alternative ?
1) IF cash in a bank is increasingly subject to negative rates
2) IF cash withdrawals are increasingly restricted
3) IF cash is increasingly a dying beast…. then it cannot be “held under the mattress”
What’s left as alternatives are basically real estate, art/collectable items, equities, diversified FX/money market funds, bonds, and precious metals/gems (stones).
I) Real estate doesn’t fit the bill as it it not very liquid and can be very sizable (high price tag) in currency terms,
II) Art is not very liquid… and can be very sizable as a price tag too.
II) diversified FX doesn’t fit the bill either as if it is held in cash, it’s an issue (remember: cash is dying). If it is held in a bank, it could be subject to negative interest rates
III) bonds don’t exactly fit the bill: wait for the cycle to slowly turn up… and people see the value of their bond portfolio turn south slowly slowly every month… and it’s not going to be an incentive to rush into that asset class
SO:
A) stocks might be a good fit, and might be what will continue to push the market higher (slowly: a bid from retail investors who will feel kind of forced to participate). But stocks holdings are still held with a broker… with all the potential risks entailed
B) precious metals or gems (stones) are a perfect fit: costs nothing to hold, are decently liquid, and have no counter party risk. The advantage of precious metals vs. gems (stones) is their standardization (999 or 999.9 gold for example vs. stones have different levels of purity so people with little knowledge about them can easily be fooled).
Just my 2 cts.