DAVID WOLMAN I remember somewhere you said, Robert, that a lot of this economic activity is about flying under the radar of government. My thinking on that right away is, 'Well yes — except that most of it is conducted with the currency issued by the government.' So, in that sense, are the actors in the shadow markets of the world given a leg up by sovereign currencies in physical form versus electronic form? Or are they eager to see new, alternative ways to transact, whether it's with alternative currencies or whether it's trading in airtime minutes — which you write a bunch about, and which I touched on some in my book? I think you're absolutely right, this issue of commerce conducted under the radar and unreported, that will persist whether or not we finally put cash in the grave. But I find much more tantalizing the question of who might be helped once we put cash in the grave. It may be that the poor and the innovators who are involved in these shadow markets could do really well if they're, for example, moving faster to mobile payments than necessarily having to store and secure a little lockbox of their earnings there at the umbrella market.
It almost reminds me of these clowns who say get the federal government off my Medicare, in that they're not totally separate from the government in that they are using the government-issued currency. It's quite at a distance, it's true — they're not reporting, they're not paying taxes — but they're still —
RN They're patronizing the sovereign currency, exactly.
DW Exactly. And they all depend on it. I don't say that in a kill-the-Fed conspiracy theorist sense of it, but it's thought-provoking at least.
RN You brought up something interesting, which I actually didn't think about for the future. One of the biggest problems that the transnational merchants who are involved in the informal economy face is dealing with the devilish exchange rates, and the way in which a falling dollar and rising yuan can kill trade in a third country that's using the dollar and yuan to convert its sovereign currency into dollars, and then convert dollars into yuan to buy things from China and ship them back home. If there were something that kept its value and could be universally exchanged, such as mobile-phone credit or frequent-flier miles or something like that, that would definitely benefit the folks in the underground because they are definitely looking for ways they don't lose out on exchange rates.
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