goldbug9999, on 01 April 2012 - 09:09 AM, said:
Simply draw out all the money you spend on "day to day expenses" (food, fuel, etc etc) at the beginning of the month from the cashpoint and then buy all these things cash as you go.
Lets say this amount is £300, by doing this and assuming roughly even spending throughout the month you have increased the average amount of cash in circulation by £150. The "miracle" of fractional reserve banking means that you have reduced the amount of electronic money, to be gambled and skimmed by spivs, by around 100 times this amount. Doesn't require any coordinated action, just a slight change of habit.
So lets say 100k people did this relatively simple adjustment to their spending habits: 100,000 * 15,000 = £1.5 billion removed from the banking system.
You are forgetting that many many households do all spending on creidt cards and use any spare income to pay off their credit card bill so have no "cash" spare to draw out.
Seems crazy but this is a true story, about 2 years ago had friends to dinner and they where complaining of getting further into debt and they asked how we managed to shop so cheaply. I explained we switched everything available from Tesco's to Aldi and Costco and pretty much halved our monthly shopping bills from £600 p/m to £300 p/m.
They thought thiss was well worth ago until I mentioned that Aldi and costco don't take credit cards so we draw out the £300 cash just after payday and budget it for the month the old fashioned way via a Jar in the Kitchen.
This then killed the dream dead for them as they said they are always overdrawn and a big chunk of their income each month went to pay off credit cards so they don't have £300 cash to draw out without hefty bank charges.
I tried to explain they should just pay £300 less off the creidt card each month, use that to be available in their overdraft to draw as cash and 1/2 their grocery bills. After several explanations they couldn't grasp the concept of this so I just left it.
Last i checked at Xmas they are now 1 years salary in debt on credit cards. Some people just can't shake the spend on CC and pay off as much of the CC bill each month ethos even as the debt's build and build.