THE first prototype automatic teller machine (ATM) was put in service by Barclays Bank in north London in 1967. It allowed withdrawals by inserting a human-teller generated paper check, which the machine could read and then dispense the funds.
The first fully functional “modern” ATM came into use in 1972. I remember opening an account at a bank just because they had an ATM.
An ATM is really nothing more than a substitute for keeping your cash in a box under your bed but with more safety and security—theoretically.
The US just recorded negative growth for the first quarter of 2015. No matter all the excuses that government can make, it shows that economy is not growing. Since the US economy supposedly came out of its global financial crisis recession, there have been three negative growth quarters. This has not happened in the more than 60 years since World War II. You cannot have a sustained growing economy when you have periods of no-growth.
Europe is facing a broad economic disaster as Greece prepares to default on its debt. Last month Greece had to borrow money from the International Monetary Fund (IMF) to make a payment on the debt it owes to the IMF. Try asking your bank for a loan to pay the monthly amortization on the loan they gave you to buy your new car. That’s what Greece just got and they want more.
An official Greek default will spread chaos through Europe. For example, Greece owes Austria an amount equal to 3 percent of Austria’s annual gross domestic product (GDP). Germany is owed 3.3 percent of its GDP. For the other nations, it is France, 3.2 percent; Spain, 4 percent; and Italy, 4.4 percent. For a comparison, the total Philippine government budget for 2015 is 1.8 percent of our GDP.
The US Supreme Court just ruled that the government has the right to seize private pension and retirement funds if they “underperform.” The government created a zero-interest rate environment that makes saving money with even a small profit almost impossible without high risk. But if a pension fund does not make a profit, the government can take the money.
The European Union and Switzerland have signed an accord that will end banking secrecy for EU residents. Switzerland must report an EU resident’s deposits in that country as the US is requiring for all banks—including here in the Philippines—for its citizens and current or former residents.
The Western governments are desperate for all the cash they can confiscate any way possible from their citizens. But there is also another reason.
People tend to get very upset when government creates dismal economic conditions. The American Revolution started because of oppressive taxation and the French revolution came during an economic crisis. Germany’s Hitler and Nazism was a result of hyperinflation.
The Edsa Revolution in the Philippines did not come with the execution of Ninoy Aquino in 1983 but after the total GDP fell 20 percent by 1985. Estimates are that it takes one armed government agent to control 5 to 10 unarmed citizens. Only a few places like North Korea have those kinds of numbers.
But one government agent sitting at a computer can control an entire nation.
When conditions become severe or people are under great financial stress, they want their cash in that box under their bed. As banks were being subject to mass withdrawals, the Greek government limited the amount of cash in the ATMs. France has already reduced by two-thirds the amount of cash that can be used outside of the electronic systems. Spain has frozen all accounts with troubled Banco Madrid, including access to safe deposit boxes.
Could this happen in the Philippines? Of course, but the problem here is that people hold enormous amount so physical cash outside of the electronic system.
The government is changing the money once again and all “old” currency must be exchanged by the end of 2016 or become worthless. The government says the “New Generation” banknotes will have enhanced security features to protect the public from counterfeit currencies. It is also a reminder that government can declare your cash worthless at any time that it desires. And if you happen to show up at your bank with several million in “old currency,” do not be surprised if you get a call from the Bureau of Internal Revenue.
Remember how upset and helpless the feeling is if the ATM is down or out of cash? Governments could turn off an entire nation’s ATM system with a push of a button and take all the money anytime they wish and make any excuse from terrorism to natural disaster.
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