Posted on 11/05/2015 11:23:26 AM PST by amorphous
As central planners the world over grapple with the effective "lower bound" that's imposed by the existence of physical banknotes, there’s been no shortage of calls for a ban on cash.
Put simply, if you eliminate physical currency, you also eliminate the idea of a floor for depo rates.
After all, if people can't withdraw paper money and stash it under the mattress, then interest rates can be as negative as the government wants them to be in order to "encourage" consumption. If, for instance, you’re being charged 10% for saving your money, then by God you will probably spend that money rather than see the bank collect a double-digit fee just for holding on to your paycheck.
In the absence of physical cash, there’s no way for depositors to avoid that rather unpalatable outcome unless the public starts buying hard assets like commodities with their debit cards. If you think that sounds far-fetched, just consider the fact that everyone from Citi's Willem Buiter to economist Ken Rogoff to the German Council Of Economic Experts' Peter Bofinger have now floated the idea.
"With today's technical possibilities, coins and notes are in fact an anachronism," Bofinger told Spiegel back in May.
Now, in what should be a wake up call to the world, Bank of Ireland has banned branch withdrawals of less than €700.
Seriously.
(Excerpt) Read more at zerohedge.com ...
On one side of here mouth, Janet is saying:
Fed's Yellen sees possible December rate rise, gradual hiking path
And on the other side:
Could negative rates be next on the Fed's policy menu?
I'm guessing it will the latter and they will try to outlaw the use of cash. The primary reason, there are many, is because compared to digital debt, the supply of cash is very limited.
Either way, it's not a bad idea to have some ready cash hidden away.
Big Brother loves a cashless society.
He knows everything you do.
I subscribed to the letter that Ron Paul is endorsing right now. I learned that around $250 billion in cash changes hands in America in a year. There is around $5 trillion that changes hands in the form of credit every year. The letters bottom line, if the credit market implodes, we are screwed. The govt. already wants to know about “suspicious” withdrawls....have some cash on hand, the ATM’s will run out of cash immediately.
Eay solution, make no deposits to BofI.
As usual, rely on Zero Hedge’s bloggers at your own risk. The bank said that you couldn’t use tellers to withdraw less than 700 Euros - you needed to use the ATMs. On the deposit side, if you if you want to deposit less than 3,000 or 15 checks, you have to use the ATM instead of a teller, as well.
This is what they have spun up into a ban on cash.
McDonalds apparently installed card swipes because people spent about 30% more when they didn’t count out the cash or face the oh, crap I only have $10 cash on me.
That could be the incentive to pushing people to swiping cards - they tend to spend more than if limited by cash on hand.
I think it is Chase bank that doesn’t allow cash payments for car payments or mortgages.
He's talking around $60 Trillion in debt but his cash figure matches yours. So if something happens to close the banks, shut down the internet, whatever, it will mean everything stops! There's nowhere near enough cash to continue doing business as we know it.
Ah! The good old mattress economic theory...it works for me!
Buy gold, silver, copper, and ammunition. Putting cash away that can lose its value overnight per government edict is silly.
Read “The Handmaiden’s Tale” to get a chilling picture of what happens when the plastic cards no longer “swipe”.
I ran into this at Wells Fargo many years ago. Was in line to deposit a check and buy some travelers checks for vacay. They had someone going up and down the line trying to get people to use the ATM. When she got to me I was pizzed from watching her trying to talk a bunch of old people out of line who clearly didn’t want to. When she got to me I told her to go get me a manager. When the manager came I told her......if you don’t want to do business with me that’s fine. I want all my accounts and safety deposit closed now. I want all cash because I am going to take it down the street to another bank that wants my business and open up a new account. I was calm but angry and she knew it. She didn’t even try to talk me out of it.
I’m investing heavily in precious metals...
...brass and lead
Y'all kin or something???
The beauty of this (for the restaurants) is that the consumer is encouraged to have the card re-load itself whenever the balance gets below a predetermined amount.
Let's say that Starbucks has ten million customers using this system and the average "re-load" point is $5. This means that Starbucks now has $50,000,000 in cash just sitting there on their customer's pre-paid accounts. Even if a 5% return, you are talking an income of $2,500,000 each year - all pure profit to Starbucks.
This represents cash that may never be used by the customer but Starbucks already has it on their books.
While I agree with you, some ready cash is also a good idea. It’s what everyone is used too.
Do not forget toilet paper! It’s as good as gold for trading in hard times.
I’ve noticed this as well. It’s like printing your own money just like the Fed.
Customers at Cyprus' biggest bank stung by 60% raid on savings
However, the last time I paid mine off, I got someone else to do it for me because I couldn't get away and they were going by the bank. They questioned them about it, but allowed the payment for me. So I guess it may also depend some on each branch allowing it or not.
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