Will Coin Shortage Fast Track the Cashless Society?4 min read
As if we haven’t scapegoated it enough already, financial experts are now blaming the coronavirus for a shortage of coins in the economy. This is quite the irony considering that we have more money than ever, by far, circulating in the economy — on paper, at least.
And that’s just it. Fed Chair Jerome Powell (or The Money Printer Dude according to my favorite finance YouTuber Meet Kevin) has vomited between $6 and 10 trillion worth of money into the capital markets. The actual physical cash infusion may have been a fraction of this number if it existed at all. The Fed reduced bank capital requirements to 0. Lenders didn’t need any new cash.
What we all needed was the numbers on our computer screens to go up. We needed enough on one screen to type out numbers on another screen to pay bills without the number on the first screen going negative. That’s all. Cash wasn’t necessary to save us from COVID, and especially not clanky coin cash.
So cash can’t save us, but money can. Will corona push our brave new world into the conspiracist’s dreaded cashless society? (Hint: China is already there.)
Kicking and Screaming
COVID is making all businesses question closely whether that physical office rent is worth paying. Zoom meetings get just as much done for way less money. The trend towards the virtual office was on the national proverbial tip of the tongue before COVID. Now it’s being forced upon us, and some experts are saying that companies will never return to the status quo once they see that remote workers will actually work.
The penny has been just as useless and annoying as office rent for just as long. What can you really do with nickels other than fill up your desk organizer partition to feel rich? Personal anecdote: This trend has already reached its conclusion in places like the Philippines and Serbia. Cashiers don’t even bother to give back the change after the decimal point. If you ask for it, they look at you like you’re nuts.
COVID is causing retailers to demand patrons produce exact change. Business owners don’t want to handle coins anymore because of the health hazard, something scientists have warned about for decades.
Our premier financial authority is also slowing the production of coins to maintain social distancing. The U.S. Mint did have a knee jerk relapse to the status quo in June, jolting production 76.6% higher than May. March production represented the production low on the year, a 26.8% percent decrease from January, the year’s previous high. Note: The Mint did promise to cease penny production in 2022. Considering it costs 1.99 cents to make a penny, this is a good start.
Although companies are complaining about a lack of change now (pun intended), the writing is on the wall.
The Writing on the Wall
Once people realized they could still buy stuff from home during COVID, Etsy, Shopify and Square stock smashed record highs. Investors, business owners and shoppers all kind of realized at the same time that there need be no slowdown in consumerism. Shopify revenue grew 47% year over year. Etsy reported a 79% jump in non mask sales in April. Square stock did a 4X from its March lows as CashApp (along with Zoom) became the new Xerox — a brand so popular it gets verbified.
Fellow investors, it’s time to believe in the new normal. It’s too early and there’s not enough data for the Pew Research and Deloitte studies proving move to majority online commerce and remote business. If you wait until that data comes out, you will have missed your boat.
I’m old enough to remember a time when every major business publication was putting out articles about how the Internet was too wild and uncertain of a platform to build commerce over. These articles were written fully in the present, disingenuously taking “both sides” (move online vs. don’t move online) in an attempt for a “balanced” outlook. An old writer’s trick — feigning sophistication through needless, and if you’re really good, paradoxical, subject obfuscation. I’m sure that many entrepreneurs were scared away from early positioning taking the advice of these opinion writers, admittedly my colleagues and friends.
Looking back, I realized I was reading all of these doom and gloom articles ON THE INTERNET. These businesses were telling their writers to build an online presence writing about the uncertainty of building an online presence — sort of like Jamie Dimon and bitcoin. I take it back. Exactly like Jamie Dimon and bitcoin.
The penny’s going away. Home delivery is the new grocery line. We’re going cashless at some point. It may not be this year or next year, but it is coming. Invest in the companies looking to this inevitable future and modify your lifestyle accordingly.
Use platforms like forex.com and IG to move into economies you believe ahead of the curve. I’ve been to 109 countries. These economies exist.
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