Banking At Home - The New Cash Cache Stash

A wise man would often tell the growing boy that most people live beyond their means. Then, after a pause, my father would add, ‘But the trick is to somehow live within your means’. Wilkins Micawber pretty much said the same thing. It’s just common sense, really, but life has taught me that it’s one of those pithy truths easily overlooked, especially in the electronic age of instant credit and plastic payment, everything underpinned by borrowing and quantitative teasing.

We also live in the age of glib slogans, some so well known as to have entered the language. Aren’t we all, in one way or another, constrained to gorge, binge, spend, spend, spend in the money supermarket of life: eat out to help out, bog off, flush it all down the pan. It’s our moral duty and the financial institutions are there to help us comply. We can ‘get a little extra from the Halifax’, prosper if we assume ‘the Abbey habit’ which will lead to a ‘Abbey ending’. With my bank I have, very reassuringly, a flexible friend for life. Ah bless!

Many economic experts who tend to disagree on most things are happy to unite behind the belief – the ‘Keynesian approach’ the jargon hunters call it – that the only thing that will bring the applecart to a grinding halt, its axles buckling under its high stack, is if people stop spending. They pride themselves that it was an understanding of this alone that saved the global economy in 1987 when international stock markets crashed - and led to the boom years of the 1990s.

Well, we now learn that the Bank of England is concerned that 50 billion pounds, no small sum even among the trillions of national debt, has ‘disappeared from circulation’. This doesn’t just mean that locked down people have stopped spending at the same rate: it tells us that money has been withdrawn from accounts and stashed away. The rainy day is nigh and people who possess money, having already hoarded food, are now hoarding cash, the real tactile currency, the indisputable proof of purchasing power.

This is a perfectly sensible thing to do in the circumstances and I applaud their prudence. Above all the use of readies puts a break on reckless over spending, being sucked into hands of the payday loan sharks and the inevitable descent into the poverty trap, the cause of widespread misery, homelessness and, in extreme cases, suicide.

Surely it can’t have been forgotten that super-low interest rates combined with wilful lack of banking regulation encouraged the so-called sub-prime borrowers to buy homes, even when they had no savings, no income and no job prospects. These were the cannon fodder for one of the biggest boom-bust experiments of all time. The housing collapse in 2008 triggered the banking crisis and brought the global economy to its knees. We can’t have forgotten, can we? Remember RBS? Does it ring a bell?

After that you might think governments might have encouraged people to at least go back a little to cash transactions. But, no, governments just don’t like cash. It can’t be tracked or traced. It allows the buyer or seller the liberty of a little private manoeuvring without the authorities getting their middleman percentage. They’d much prefer you to have it all in the bank and pay - and be paid - online, everything nicely accounted, your precise means and circumstances recorded in perpetuity.

And the clever scam is, and it’s a real beauty, if you’ve got money the system can decide how much interest, if any, you are paid on it. And if you haven’t got any money, they can similarly set the rate you will be charged for borrowing it. This sounds like a win-win, to borrow one of theirs.

The generation that came of age during the banking collapse of 2008 are more clued up than they might once have been. They know a bit about derivatives, selling short, manipulating the Libra exchange rate, all that clever business conducted by the cognoscenti. This is the Woke generation, alive and alert to the manifest inequalities and iniquities of the past. If you dip into their twitterings, you find they are cynical, dispirited and, above all, angry. They speak openly about systemic corruption. They see conspiracy everywhere and who can gainsay the truth of much they believe. They are, sadly, the ones who will be paying for the jam-today jamboree for the rest of their lives.

You don’t have to be a diehard socialist or even politically motivated at all to see there’s huge corruption at the heart of the system, with all its patronage, nepotism, insider knowledge, in-group dealings and total unaccountability. And what you can’t see you can nose because it reeks to high heaven. Unfortunately, we’ll never be able to precisely quantify the sheer scale and magnitude of it because behind the smoke and mirrors it is all apparently legal - grossly immoral but perfectly legal - rubber stamped by our great chartered institutions.

And if it’s found that this is not actually the case we can have a royal commission carry out an in-depth, totally comprehensive five-year study, before Sir John Safehands delivers the tardy whitewash.

‘Glad to get that settled … now let’s move on.’

Then there is the blatantly illegal and equally unchecked black economy operating on the black web, run by crime syndicates. Of course this could not operate without the tacit co-operation of the body politic. If the big cuddly banks didn’t extend a welcome how would, for example, the drug cartels launder their dirty money. The international mafiosi have moved way beyond the numbers game and protection rackets. They are now pin-striped bankers rather than wide-striped wide boys and they are more likely to be rewarded with a knighthood than a spell in clink.

These days, you know, they don’t actually bother printing more money when they begin to run out. Of course, they don’t. How naïve would that be! They don’t want it to inconveniently exist in physical finite terms. There’s a self-imposed limit to how much you can carry to the Caymans in a suitcase. It’s much better if you can move the filthy stuff through a series of global banks so that it travels in seconds across continents, cultures and time zones and comes back pure and wholesome and green. They even pat themselves on the back that they’re saving the planet as they do it.

No, don’t be daft, they don’t print it: they just add a few noughts here and there and get their own accountant, royally chartered, to sign it off: revenue in one bright column, government bonds on the other side.

O brave new world? I think not. I think how cowardly, how desperate and how dangerous!