and the phone was finally answered. the entire conversation was what do you see? the response was iceberg right ahead. the response from the officer was thank you. >> samuel halpern on the truth and myths of that night on american history tv this weekend on c-span3. >> you are watching booktv. next david wolman looks at a future world where paper money is no longer used. in preparation for the book mr. wolman lived without physical

cash for a year. this is one hour. [applause] >> thank you for being here. to delve into this conversation about money and its future i thought it would be helpful to tell you about the people who are serious right now. they're furious about the idea that cash might be gone. i think this is a helpful way to touch on what i was going to introduce in the book. after a short reading we can do q&a. so the angry people. what happened to me four five years ago is like many people i was getting interested in the cost of manufacturing pennies and nickels which some people might know it costs them $0.02 to make a penny. it costs a lot more than the

value stamped into the object itself. nichols right now are around $0.10 per nickel which is almost like you have to say it again. $0.10 a nickel. i was seeing a lot of this in the news like a lot of people. a group called citizens to retire the penny and on the colbert report and the washington journal. for those of us who have a rationale, it is crazy but not necessarily going to get anywhere. then i started looking into the cost of cash in society. suppose an editor why did this idea that we could put together a short essay saying let's get rid of cash altogether. so much of our lives are moving to the digital realm. movies, music, books for some of us. why not catch? this is technology also ended is quite analog. we published a little essay and

people go bananas. this is peculiar inconsistency number one about our world. cash to great extent we have pushed it to the margins of our everyday lives already. you are probably not paying your rent or your mortgage with a fist full of cash flow alone car payments or a sofa or a sweater or dinner tonight. it is not part of the modern economy in an enormous wave. those transactions around the globe are on computers anyway. if you officially or publicly suggest maybe it is time you will go crazy. where are the haters coming from? from every ideological and political position on the spectrum. first is you will have to pry it

from my cold dead hands, the militia men said. not hiding in, and don't want to be connected to the government and all transactions to be anonymous. then you have your aclu on hyper drive. everyone has committed to the idea that electronic money in our lives is useful. bank account or credit card, just a payment option. it is not electronic money in general but most of us have given in to this idea. if you say let's meet cash everyone says big brother is going to be watching me and the banks and credit card companies are monitoring my transactions and already live in that world so you get this recoil response. another group you have is less impassioned but i hear from people that there's something about the physical. something about the physical. of lot of people who don't like the books love to hold something and embedded in that response is

also a much more sins sir concerned that people hold on to catch more tightly. the credit card defect catalyzes spending and that is a problem for a lot of people. americans are on the hoof for $800 billion in credit-card debt. a lot of drug dealers don't like me because cash is the currency of crime. they're not writing me e-mails per se but i will let you know if they stop by my house or anything. what is in this book, you go from the penny to the nickel and the $100 bill with a $50 bill and right now roughly speaking -- no one knows the exact numbers -- cash management in the u.s. is about $150 billion a

year. that is three time the budget of the department of education. what is cash management? making it available to u.s. register at the atm and even at the atm in a corner of the country. what that number doesn't include is anything to do with crime for example. there were 10,000 bank robberies in the u.s. in 2009-2010. that is just people going after physical stuff. there is electronic crime and financial crime in cyberspace. not really this conversation per se. that is a huge cost to go after those folks, and incarcerate them. we the taxpayers are funding the war on drugs. the drug lords love benjamin. that is how they transact. you see costs circling against us. this is one of the ideas i wanted to suggest in this book.

cash -- who doesn't love it? i want a big pile of it and you want a big pile of it. when you scrutinize cash for the banks of time that i did, you see it has much wider costs. no one would consider. the sector -- cash is still -- at this point i may germowfold with a disdain for cash yucky this but it is an issue. the the the ideas that wanted to pursue. early on in this project i really thought this is going to be a cross between a valentine for cash and a eulogy. it is on its way out soon enough. here we go. just like movies and music. i really thought i would be writing rectangular slips of paper and little metal plugs and that would be the extent of it.

as soon as you start to wonder more about where cash comes from and what it means and what its place is in our lives you can't help but touch on these wider questions about cash is history and the gold standard and national currency. when i was composing this project one of my friends that you got to steer clear of central-bank. great advice. they're struggling to shake your narrative. the reality is you cannot talk about cash in an intelligent way without talking about where it comes from or where it is born. this is another angle i wanted to take and this technology side to things too. we will talk a little more about mobile phone technology and what that means a special for those parts of the world. suddenly is going off in all these different directions. what i wanted to the best i could is keep the men's, what is

money, what is value? how do these things work? and back , what is money, what is value? how do these things work? and back to the tactile stuff. i flew to iceland to do a post-mortem on the financial collapse a couple years ago. overnight there stock exchange lost 90% of its value. the national currency lost two thirds of its value overnight. i went to explore this idea but just wondering about the cat and national currency and what does it mean to have your own money and this might sound incredibly dated. we are in the midst of the on going euro crisis. maybe we should get rid of the cash. we don't need it to maintain our economy. that sounds crazy. they're so happy they don't have the euro but that was part of

the conversation. i went over to interview a woman who designed iceland's national bank note and talking about this, quote, heritage you can holding your hand because physical money is one of the last touchstones of national identity. she had some practical things to say when it comes to the fate of money and what it means to be a nation. i am pursuing these different angles. the last one i will touch on is a psychology question that goes back to the credit card effect and how we seem to be hypnotized by credit cards and prepare to use cash and our bias for physical money. there is a great study that i discussed in the book by researchers in the university of minnesota and will touch on briefly. they split their subject into two groups and this half of the room they ask people to count

out rectangular slips of paper in the same dimension as bank notes. no artistry or images. this is regular cash. just talking the stuff. they asked both groups of people to put their hand in top of hot water. and back to the researchers how hot they think it is and how much pain there experiencing. and statistically significant difference according to editors of science the group that just handled cash just exposed to the stuff and immune to the temperature and payne. not that hot and doesn't hurt that much. those of us and what they have to surmount. and how do we get there?

we have millions of people, cash tips for the lion's share, not about screwing 99% or 1%. they can't get rid of cash. what are you going to do, an hour or three days. the earthquake preparedness tips, had have some cash on hand for low value in your stash. i love this idea of the cashless future. i spent a whole year not touching cash but i won't follow the recommendation what have in my emergency preparedness kits. cash is undergoing this death by a thousand cuts. we don't know if it is cut number 890. it is happening. it won't be any kind of

proactive decision on the part of government or anyone. it will be put to the margins by new technology. the mobile phone especially. in part of the book i travel to india to look at this idea. something i never had any understanding of in this project. is cash is the enemy of the poor. it is most punitive for those who don't have much of it. it sounded counterintuitive that i needed to follow around an economist with the gates foundation, and for those lucky enough to live in a wealthier country, we can toggle between money and electronic form and its physical form as we see fit. i don't like cash that the jury is it very much. if you like using cash and wander into an atm tonight to

look at their terrific. when you are for and tracked using cash you are excluded from the formal economy in ways that are crippling especially because you can't break for financial shock. you can see it the way people need to. if they have any hope of climbing out of poverty it is a out of poverty. what is happening now is a lot of development experts are encouraging this idea of getting people transaction, they don't need the cash. not only is all of your wealth however much or however little, being lost in a flood or fire or earthquake. everyone is making claims on that money. we cling the to cash and little more because of triple plays on the mind. cash is turbo liquid. they can't hold on to us.

they can't hold on because a drunken uncle isn't making claims on that cash or an abusive spouse, and the women looking after household funds. those are the most terrible examples of people making claims on their money but then you have legitimate ones. and aspirin or somebody needs a new pair of shoes. hard to say no. and yet, in ten months for to by some farm equipment in 16 months. everyone is trying to get people involved in banking. not the abuse of wall street ceos and old-fashioned stuff. a secure place to store your wealth. it put $500 million last year to support innovation, to interview

a guy to see how this change his life. had a small amount of money. four days of income generation lost to look after his shop and the wealth that may be hidden somewhere. basically sins a text message to his granny on the countryside. and wanders to a kiosk where there's a huge network of merchants involved in the system and shows the text and there is quick back and forth to cash out. i asked about all the security concerns a lot of the may be wondering about and he looked at me, and the value proposition. that is pretty illuminating end pulled me into more substantive area of discussion. i like talking about germs on

bank notes and wishing my barista was grabbing hand sanitizer. when you talk about fighting poverty, and for all the reading versus huge front, the technology side. hands these alternative currency issues. community currency and virtual currency you heard little bits of this idea. to a lot of people that sounds to kiev first. that is a testament to the achievement of the u.s. dollar for being acceptable everywhere except on a airplane. the reality is these things are real money. and in massachusetts, and circulating in london. they are everywhere.

they are real money. what is money exactly? money is only an idea. if you and i agree tomorrow that this bobble of suntan lotion is a sufficient medium of exchange and holds value and you can trade it tomorrow it is money. that is what these alternative currencys are doing. they have the idea that it is time to end the government monopoly on issuing national currency. again you see this diverse group of people who are excited about this idea. you get the end the fed types. one guy kind of following that umbrella. they believe the federal reserve is going to bring us down and hyperinflation is on the way. can you also get the sort of hyperprogressive keep our money local because better to buy from the furnituremaker on main

street for the bookstore or your neighborhood and to buy a sofa paid for with a visa card that ships overseas and made in india. those two groups are coming together on this alternative currency idea. from a riding perspective it is fertile terrain because here you have people who are not just interested in what is money but -- and how the monetary system work, these are people who then said sit down and come up with something better. so right away that sense of audacity looking around interesting characters and find some really wild ones. i would like to read the l.a. chapter called the trader. about one such gentleman who is in trouble with the law right now but we can talk about that.

on a sunny october morning, west out of honolulu in a beige toyota camry has a habit of seeking eye contact which means looking over at me as he rambled through his wandering monologue. with each head turn the car swerved. he always managed to return his attention to the highway. fast enough to judge the card back into line. he may be an enemy of safe driving but he hardly looks like the domestic terrorist federal prosecutors say he is. he wears a black and vanilla hawaiian shirt. and a thin black belt. his delicate wire rim glasses. his hair curls up in a wave of gray and silver that he pulls into a tiny ponytail. aside from some arthritis the 67-year-old man who called sins

of the monetary architect. and free-wheeling exploits. hand fondly. we once drove a truck to the lobby of the hotel. and after he accepted the idea, i was not an undercover agent which takes a while. and also contained self-deprecating and hawaii. giving the overall distress which considering he is facing criminal charges for conspiracy, counterfeiting, mail fraud and got to quote this one.

silver coins in resemblance of genuine u.s. colin's. lost temporarily lost possession of hundreds of thousands of dollars of other people's money including is the mother's and one of his sidekicks has been in jail for no two years. and in terms of bail, and awaiting trial. passed for a harbor we turned north and passed the chinese restaurant called the golden:. yellow blossoms around the chain-link fence across the

street. apps oil lease will. we came to see the gray six foot machine. it looks like that 3 ton hourglass. this is the tool of the trade and life passion. it looks fantastic. and the thick columns. according to the fbi and federal prosecutors this is also the mechanical accomplishment of his crime. by now he says i'm not allowed to make anything. he rolled his hands together. this is another term of his bail as an announced business from a parole officer. coins have always been a part of his life. growing up outside kansas city

he inherited a modest collection of his grandfather's and his mother instilled in him a respect for the value of silver giving him silver coins as gifts and lecturing about the pension appreciation. i saved everyone of those silver quarters referring to u.s. quarters. before 1965, 90% real silver. he runs a custom minting business called the royal hawaiian meant company producing merchandize for war veterans, country club's leaders the historical society, and anyone else willing to pay for specialized coins or medallions. none of this is illegal. over the years, his business produced coins celebrating hawaiian statehood commemorating icons of history like captain james cook and saluting winners of the hawaii state diplomatic association and marking the 50th and 70th anniversaries of the

attack on pearl harbor. i asked if i could see some of the coins. the dollar is one of the coins that got him in trouble all the allied don't recommend using the wordcoin front of him. a coin is issued by the government! is not by the government! never called collinsins . i can call from silver dollars or pieces. his unusual legal case rests partly on parsing such terminology not to mention use of the dollar's symbol. for charges that include a

daring prohibited utterances, no detail is too arcane. a moment later gregory returned from his office with a small box containing a dozen plastic cases each housing a single coin. he handed me one. the pictures of hawaii's king standing proudly in warrior head address, arms race as he is about to address his loyal subjects. turning it over to inspect the other side i read hawaii dollar across the top. in the middle of the image the words liberty dollar on the left and $20 on the right below the seal. $20 pure silver minted in usa. this was meant to hear. tina. then he hands me another one. the king and again. the same size, weight and composition. turning it over reveals an image

of the traditional polynesian boat and the state motto in capital letters which translates the life of the land is perpetuated. this:is al is also: is also sta of pure silver but no denomination or dollarcoin is one of pure silver but no denomination or dollar similar declaration of value. i hold the pieces as if it might offer some clues to their variable consequence. for then i place the two side by side on the table. alleged counterfeit on the left. knickknack on the right. that is what they're passing over. do i look like a counterfeiter to you? i will stop there. thank you very much. [applause]

i have cruised through a lot of ideas but hopefully we can get some conversation going in and you can hurl some criticism at me that a cashless society would be good. [inaudible] >> how did you manage? you were talking about the barista and tipping people and away cash is important and under $5, you have to use cash. >> how was my year without cash? largely successful. i am not a waiter. it is a different game. i need it for income. i only go to arrest drug takes cash that i like. i had to pay over and above the price of a doe not one time because they had a credit card memo. i was a scrooge running by the same lemonade stand many days in

a row. one time trying to how the training to manhattan. couldn't pay new jersey transit train conductor bound for the economic center of the universe with anything but this old paper. and when i got to india the experiment when on hold before i left the airport. i will not be able to do anything outside my hotel room if i don't have some cash. that was a reminder how far certain places in the world have to go. pay my translator or buy a souvenir or anything. that was five or six days. there was the baby sitter incident, hurry up and established a paypal account. check is still kind of paper money. i felt that would be a cop out. that that -- the idea was not

like this is crazy brave participatory journalism like lining up against the detroit lions kind of saying. was more the soundtrack to my year. kept me thinking about this. even if i am sitting in a coffee shop, noticing the trucks parked somewhere or driving by or the atm that looks like it is straight out of 1982 as far as technological innovation goes. it kept me mauling the topic. discuss it in the book and looks like it adds to the conversation. that a points i don't think they want to hear me talk about trying to find a parking meter that will accept a credit card. a little more sparse with anecdotes in that regard. >> you said the government has control over the money. it is the banks that have control over credit cards. i would rather trust the government than trust the bank.

we look at fees for this and fees for that. we would be totally at the mercy of what i see as an unscrupulous banking industry. >> you need regulators. that is a problem. how can regulators do their thing and i have heard that a lot. i trust government more than i trust banks. i wonder if the reverse could happen. once we get rid of cash which people are not really using anyway. we should be critical of them but most people are still saving their money in electronic form unless you have briefcases full of cash under your bed and don't know it. we are engaged with them. that is not to give them a pass but to say maybe once we say goodbye to catch people become more savvy about the difference, the friction in their economic lives and where is coming from.

if one bank is charging you this fee and another is charging you that fee and another detailed privacy policy people will seek out the ones that are better. if you are dropping people ascending money back and forth. one thing to drop a call and have to dial someone back. if you drop my value, and will never go back to that service. companies starting that stuff get it. the bar is pretty high. they need to provide a safe and robust system for consumers. there is ample reason to be skeptical of the banks. i don't think this idea is about editing national currency but if cash is marginalized you get a real accounting across government agencies of how much cash costs. treasury makes money by issuing money for all of us but they're

not talking about the fbi. secret service told me -- a former agent told me 90% of their workload is not protecting the highest office in the land but hunting down those who after four night without sleep beside their going to. some $5 bills and print the image of the 20 on them. then they get caught. 90% of the secret service workload. there is a way to trim government expenditures a little bit. once there is accounting across government agencies we will see catch a little differently. >> talking about the legitimate cash, what about people who have their cash and they declare for tax purposes 9% of what they make and the other 10%. do you have any idea what the

value of that? >> it is colossal. the tax gap, no one knows what it is because cash is anonymous. it also includes money that corporations have overseas. it is electronic money but huge amount of that money in 2000 was the most recent irs estimate and it was $300 billion. a guy i am talking to at mit and a couple weeks of to half a trillion dollars. most americans pay what they owe or what they think they owe a around 85%. somewhat encouraging when a comes to living in a civil society. that 15% and those people, hiding in come, not filing, it

matters. as far as the language, the most boring descriptor of a serious problem they have heard. some marketing help i think. >> the most recent estimate was in january. you are in the right ballpark. it takes five years to have a sense for how large the problem is that some of that -- >> thank you. that is great. >> about $150 billion. if that is $150 million, all kinds of expenditures. and the question is how good does cash use have to get? they still have to pay, have a

bank account and have to fund a message. it drops to 10%. what it would make a dent in $150 million? >> in sweden they have a union of bank employees who are so sick of robberies and the threat of robberies that their lobbying the government to get rid of cash. and it is the 50% piece. and the president from the land of lincoln in the white house it won't happen anytime soon but other countries are looking at this and if the banks were say we don't like cash it is expensive for us and dangerous for us and our customers don't really want it and there might be a push from the bank and the other place is these areas where cash but in its heels and tipping is a great example or

public transit. and we should get rid of cash tomorrow, the substitute for chipping away but i don't think -- i think it is a short-term view. credit cards were around for 25 years before people started to adopt them and trust them. not saying they are fail-safe or the most ethical you have ever seen but obviously there is a value proposition for millions of people who say yes. this is more convenient for me. catch is dug in its heels and is our job to act white the airlines. the airlines said cash management force is a problem. flight attendants are skimming off the top that it is filthy. i don't know how much the germ factor matters in that decision but they said this is a cashless

capital. that confuses a lot of people. someone asked if that is illegal the other day which was interesting. the short hand and sir because airlines are still doing it is it is totally legal. you don't have to accept u.s. dollars for payment. the idea is if you have a debt denominated in u.s. dollar. this little if i owe you a hundred dollars and we agree on the sale and was denominated in dollars when i pay you that you can't say i want uncut rubies. we already had our deal. before you give me a graphic design consultation for $100 if you say i only want to get pay in and cut rubies or doughnuts or whatever and i say yes and we are fine. that is what the airlines are doing and they are eating away at catch's for eligibility --ng --fu engibilityligibility --fu.

>> there was a time when we were in a barter society. found out about the potential of the increase or decrease of baring. >> has to do with the potential of a barter economy again. the first section of the book is the history of how money was born and how the dollar comes in now or came about and for a long time people were barring. a double coincidence of ones. kissel i have firs and you have potatoes. i'm cold, you are hungry, we trade. it is a problem when you want to buy someone for something else and that is where money is born and a medium of exchange. the exciting thing about the digital age is you can have a central clearing house for services sir you are borrowing and you can find each other.

if you go to this place and maybe you find somebody in this network offering them you are offering something else. not the virtual stuff like all of that, but the central clearinghouse is exciting in that regard and you see especially the very far left community areas like where i was in oregon and very tight knit barter exchange for people trading this stuff. the problem is accessibility. like the chicken and egg issue. if you go there and you don't want fresh bread or a massage or graphic design service which

seems to be what everyone is offering in exchanges, you want to buy gas or pay the utility bill and only take u.s. dollars. barista ways to go. >> after a couple hundred years, the inefficiencies and cost built up. what do people identify as the inefficiencies that may show a a cashless society? >> the doomsayer society, when china declares war or electricity goes off for ever and the vices run out of power or the sun is covered because we can't charge solar devices, you are in trouble and people go back to something else. there was a banking strike in ireland when people started to circulate i owe yous and when california was bankrupt people

were trading those iouss from the state and they worked. i don't think it is a concern too quickly. that being said i do think when things are calamitous, the calamity is so enormous, probably not going to be worried about medium of exchange. they will be fighting for blitz and blankets and shelter like everybody else. really end of worlds of which is less interesting to me. >> major risks and deficiencies that show up what they might be? >> counterfeiting in digital currency is a big problem. if you spend it on something the system is engineered to spend it on that. that will be a problem.

concern about the private sector versus government could be an issue depending if there's a great flowering of currency and payment devices. instead of visa or mastercard it this 35 companies. that sounding convenient to you remember your mobile phone those conversions on the fly. that will be paid in a certain currency and pay with a different currency and flipped back and forth without what people perceive right now to before of a huge pain in the rear. i will think a little more about that. [inaudible] >> without getting rid of cash? for they make money off of it. i don't say that with a political agenda. people who are conspiracy first thing that is knights templar or council on foreign relations ruling world. the more boring fate is it gets transferred to the treasury at the end of the year.

depending on your politics, that is ripping off the taxpayer or government raising revenue on which to spend on its citizens. they don't like the fighting. it is a great franchise. how could you not want to make money? costs you $0.07 to make a buck. awesome. richard. >> assuming after the next election we don't go back on the gold standard do you have any thoughts about what might happen to all that gold? >> no. this is interesting because on the one hand a lot of people laugh at the gold standard idea that it is a weird foot the to the conversation that so many

central banks hold so much gold which i find kind of weird. they might just be holding on to it because it is a commodity that is appreciating like crazy right now. some people say solid gold. denis hughes that money for x or whatever cost might be. i have a feeling it won't be too unsettling for people who don't have a good grasp of the monetary system and still have false understanding -- still think frankly the dollar's values connected somehow and the dollar is only valuable because we believed it is valuable. we vote is valuable land around and around we go. the language of religion comes up in the book. i don't know what is going to happen to the gold. how could i? >> in your research, family

members -- people use cash because they don't want their spouses to know how they're spending money. and also college-age kids -- one sun abroad, he can see where he is traveling and where he is going and use cash basically, i am in italy and then i can just kind of see that. i wonder if some people would just like to hang on to cash because it is the last bit of privacy we have not only from the government but our own family. >> that is fair and there are two varieties of that question. one is tax evasion and buying corn or presents for your

mistress. more interesting is anonymous donations to charity or to buy a valentine for yourself and they don't want them following your transaction. that is fair. the way i talk about this is the difference between privacy and anonymity. some of this is semantics but some isn't. some people jump to the defense saying we need to protect our anonymity. you have a license or social security you don't have anonymity and i argue you don't deserve it in a civil society if you are participating in playing by the rules. yar a known entity to a degree. we need privacy concerns. we don't want google and facebook gathering information about everything we do but it is bogus to say we deserve anonymity. nowhere in the constitution says to live here you have the right to act like the unabomber minus

the violence. there is contact participation and a lot of people like cash for that and they are not doing things that are nefarious. another reason to keep cash around is you hold onto it tighter. i talked to some people from debtors anonymous. the beginning of every month they go to the bank and take out just the right amount of money for rent for utilities or groceries or leisure and that is it. it helps people maintain discipline. that is an argument in cash's favorite that you can't just disregard that too quickly. an idea i try to bring up in the book is we can have our biases for different kinds of money. what i mean by that is it is hard to break the $100 bill. five 20s in your wallet and liquid assets, economist will

tell you is the same thing. everyone knows it is not the same thing. in fact let's say you have something like an e-mail reminder that a bill is due in a few days. that is a technology solution to essentially make a brief human frailty. people forget something is due or a coffee pot that shuts down automatically. the technology solution to protect us from ourselves. when it comes to dealing with cash or money more generally there are ways to engineer the system. recreate the pain of spending that we feel now is with cash and how economists describe parting with $100 bills and parting with electronic money. willingness to have all kinds of wacky terms. one additional example in that area is an apps called mint.com. every time you log on to meant you see your net worth across

the top of the screen. if you are like a lot of american that number is a negative member because you have a mortgage. there have got to be significant influences on spending behavior just from sienna negative net worth every time you turn on your phone. similar kind of influence on spending behavior we get from just clinging to $100 bill. is it the same? who knows? those are the kind of things. what if you had benjamin franklin's face on your phone every time you did something? or you had to sing a song very loud before a transaction could go through. or call you before transaction could go through by using your phone. we can come up with systems to make up for our biases to submit to them and say we always loved the penny we should keep around or we love cash and more careful with cash we should keep around. that is kind of defeatist and another category of people who

are furious with me. we can't get rid of the penny? what is this idea of getting rid of cash? maybe i'm not such a pessimist yet. [inaudible] >> one of those people who could really think it is horrible. so many people, poor people grabbed their smart phones and do a transaction. there is a huge number of people out there that this idea of everything being done by technology peterson you walk by the lemonade stand and you are scrooge you are scrooge if you can't give people money. that is one of my joy is in life. to make the transaction through a smart phone on to your lemonade smart phone.

it feels incredibly -- i would not want to say the words i am hearing although i would put that in there but not respectful of a huge segment of society. >> the poor. like this guy who i interview in the book. >> people -- [inaudible] >> twenty million people in this country don't have a bank account. how are they going to do this? what they have to do because they are excluded from having electronic money they have to go to a check cashing service and get charged various fees just to turn their money into cash whereas if they were included in banking and basic financial services they would not get screwed like that or when you talk to the gates foundation people about getting financial services to the port through their mobile phones to me that

is not -- the idea of financial inclusion. >> assuming they have a phone. >> there are a billion people right now who have a phone and don't have a bank account. you don't need an iphone. they have achieved nokia phones. as anyone can tell you with a lot of this technology the price curve is plummeting and their capability is skyrocketing. i don't really buy that argument because everybody has a phone. the cost of that is coming down. people in poor parts of the world are spending more on phones. they will spend first on a phone than medicine for their family, transportation. the connectivity is important. [inaudible] >> generally speaking the key is economist development experts tell you this is a tool to enable climbing out of poverty.

that is not me -- that is what they are saying. that is a pretty important distinction. but i hear you. people will still be excluded especially the elderly who have a habit of operating cash. the idea here is let's scrutinize the cost of cash on little more. it might be punitive for the elderly. a couple days the year when old people receive their pensions, the country has to flood the streets with police to meet and shadow the old people who go to the bank and the atm because they will get robbed or swindled into a ridiculous scam by young people because they are holding cash. i don't think it is so cut and dried that this is a class idea. you can't get rid of cash tomorrow because of the working class for example and all that. it is simplistic to think this

is a class idea. >> talking about working harder on different types of currency being played with the press nor how does that play? just a few weeks ago, i don't quite remember all this. if i remember correctly, there are a lot of things to talk about. he did ask if there was any bartering going on. >> you have to declare income in alternative currency on your taxes. i don't know how they track that kind of stuff but they have to. as long as they are doing that it is legitimate and most of these -- [inaudible] >> most of them do. they all have an exchange rate--that is not a problem. with barter -- have to estimate the cost of the service or the

product. way in the back. >> i have lived in this area ever since college and the events are extremely high as anyone around here could tell you. finally i saved enough to try to buy a place and i wanted to buy a place that would have some rental. i managed that 20 years ago. now i am trying to get a better bank at a lower rate, interest rate. they won't give it to me. although i have -- several -- not just the building but i have i are as i don't want to take out on and other investments and

right now one of them that i have applied to, the very same bank that i have my -- a won't issue a lower interest rate. they want to see me take out or sell some investments where i will get a loss or at least not when i would want to get and show that as income and they will give me new mortgage at a lower -- but of course they have been paid automatically out of the same bank every month. ever since they handled my mortgage. probably the third because interests have gone down and down. this would be the third time.

is ridiculous. exactly. >> i don't know what to say. it seems that might be outside the scope of the cash versus electronic conversation. >> makes me feel like i was among the 5% or whatever you said of people who live on cash income alone. it is putting me in the same -- >> it is punitive. >> they know i have investments. they are way above the cost of simply wiping out the whole loan. >> this whole idea of cash is the enemy of the poor. vulnerability of the savings you have and the fact that once you are excluded from the full economy you can't turn credit to get a small business loan or save for an education loan or mortgage. all of that. you have to deal with neighborhood lenders. some people actually pay someone locally to hold their money.

they don't get interest. they are paying someone else to safeguard their cash. those are the kinds of ideas i was trying to expose. frankly they blew my mind. cash is the enemy of the poor. i never would have thought about that. [inaudible] >> newton -- >> they under some kind of government regulation that they can't do it unless it shows that i had income from one of those. and i said you mean if i am too -- well -- >> we should