Is Cash Still King?

ATM

The sign outside a local diner reads “No Credit Cards! Cash Only!” "Cash is king" goes the old saw and that doesn’t include cryptocurrencies like Bitcoin. These signs should also read no derivatives, no credit default swaps, no collateralized debt obligations. You can’t pay for your hamburger deluxe with an option even if it’s for Berkshire Hathaway. You might tell the owner of the Apollo or the Dionysius to stop being a Cassandra and get with the program, but there’s something to be said for hard unleveraged cash. Does anyone still have any traveler’s checks left from the days when you bought them at American Express. Would they be considered cash? The answer is yes twenty years ago, but it’s unclear what traveler’s checks are still good today. If they were issued by Washington Mutual, one of the major banks that became insolvent in the sup-prime mortgage crisis, you’re probably out of luck. One caveat, cash may be king, but no diner wants your small change. Some people stick all their pennies dimes and nickels in plastic bags. If the turkey, bacon club sandwich with fries comes to $10.75 even a 24-hour diner is going to complain when they have to count up 1075 pennies and no one really wants singles or for that matter $100s. Cash is king if you’re paying with $5s, $10s and $20s. It would be interesting to see how Warren Buffett, the sage of Omaha, pays for his grilled cheese.

Read Francis Levy's "Book Notes," Largehearted Boy