I agree with you completely.

From a money standpoint there is no reason at all for lending the banker the money as they are paying virtually no interest on deposits. Why let someone else use your money when they don't even want to pay for it? There is still convenience factors such as bill paying and still some free checking around that might make it worthwhile. After all, checking is not really free at all. It costs the bank to operate these systems and the idea behind the free checking is to get the money deposited so they can use it. There are no free lunches and "free" checking is one of the ways we get paid for us allowing them to use our money. But other than those reasons, from a money standpoint there is no good reason to not go to a cash system while we are at zero percent interest. All the people in Cyprus right now that had taken that route would not be worrying about ATM's and not being able to get to their money or loosing part of it. When you have cash in hand it is yours. When you deposit it in the bank, it is the banks and you only have a demand claim to it.

But I do agree with you, that anyone with any significant amount of money might find it very dangerous to operate completely on a cash basis. The problem would come about if the wrong people found out you carried the cash. In all my nearly 60 years I have never been robbed or had money forcefully taken from me. And I have traveled extensively in Mexico as well as a number of other foreign countries as well as almost every state in the Union. But if the wrong element found out that a person carried large sums of cash regularly, it could be a bad thing. So I agree with your concerns, and I myself keep my money in the bank.

One other concern you did not mention, is the animosity our police state has taken towards large sums of cash. Travel through certain states and get stopped on the highway and you might be relieved of a cash stash and have to go to court to prove you did not get it illegally. Police have found that they get to keep the proceeds to buy neat cop cars, guns and cool cop stuff if they confiscate money on the grounds it must have been gotten illegally and those who did get it illegally are not going to fight it so as to stay out of jail. The cops don't bother with arresting the person for any crime, they just turn into criminals themselves so they can confiscate the money for the benefit of their job security. Kind of the same deal the big banks paying fines for criminal activity but no one going to jail. So a person that legitimately has cash could find himself in the position of being treated like a criminal and having to prove the money was earned in a legitimate matter.

The powers that be WANT us to keep our money in banks. They have much better control over us that way.

John