Despite the constant use of credit / debit cards in our lives or the futuristic societies we see in works of science fiction, paper money will never become obsolete. So long as their is an economic system that requires the flow of monetary currency, their will always be a need for traditional physical money.

Its true that most people prefer to use plastic over paper. Its become too common to see people use credit to make big purchases or too weird to see the use of credit for something as mediocre like purchasing a cup of $1.75 coffee. But that doesn't mean cash could ever be phased out.

Physical money is used to support our credit value, electronic currency, or the monetary value on our debit cards. These numbers need to be backed by some source of legal tender. Simply relying on electronic currency and credit is just ridiculous as it will allow a rise in inflation due to failure of physical tender supporting it.

Their are uses for money that are not made possible with electronic currency. The purchase of simple needs could be still made with cash; like coffee, gum, cigarettes, or lunch just to name a few. Business also have a tendency to charge a processing fee when using debit or credit; using physical cash helps avoid the unnecessary fee.

Physical money shows that an individual has the wealth to support their purchase while credit / debit / electronic currency gives a chance that the person might have the wealth. failure to make the payment leaves an individual in unneeded debt and the business receiving an IOU.

Among the reasons we are suffering from this economic recession is because of the addictive dependency we have on credit purchases without the funds to reimbursed.

However the use of physical legal tender could be controlled since an individuals purchasing power is determined by how much money they actually have in their wallet. This has been the basis of a functioning economy since the existence of ancient civilization. Every great empire from Rome, Greece, Egypt to Persia had used legal tender to work its economy.

Economists have always supported the use of physical legal tender over the use of credit, including the Noble Prize winning economist Milton Friedman. He had argued that credit only brings in "excess money" undermines the value of a nations wealth.

Regardless of the norm with in peoples personal habits, the use of paper money will never become obsolete so long as we wish to have a strong economy were real wealth determines a persons net worth and not an IOU.

Learn more about this author, Soheil Rezaee.
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