Posted on 10/28/2015 8:18:40 AM PDT by SeekAndFind
Sweden is shaping up to be the first country to plunge its citizens into a fascinating — and terrifying — economic experiment: negative interest rates in a cashless society.
The Swedish central bank, the Sveriges Riksbank, on Wednesday held its benchmark interest rate at -0.35%, the level it has been at since July.
Though retail banks have yet to pass that negative rate on to Swedish consumers, they face increased pressure to do so as long as the rates remain where they are. That's a problem, because Sweden is the closest country on the planet to becoming an all-electronic cashless society.
Remember, Sweden is the place where, if you use too much cash, banks call the police because they think you might be a terrorist or a criminal. Swedish banks have started removing cash ATMs from rural areas, annoying old people and farmers. Credit Suisse says the rule of thumb in Scandinavia is: "If you have to pay in cash, something is wrong."
If banks charge customers negative interest rates in a cashless society, those customers are not able to withdraw their money as cash to shield it under their putative mattresses. Consumers' only choice in such a scenario is to spend it or let the bank take it. (The theory is that by forcing people to spend cash rather than save it, you can spur economic growth.)
Rather than going further into negative territory — a move that carries political risks the more negative it becomes — the Riksbank chose instead to do another round of quantitative easing (a forced bond-buying program that flushes more cash from the central bank into the economy).
(Excerpt) Read more at businessinsider.com ...
I am so glad my life expectancy is now short enough that I won’t have to live under this (islamonazi) dictatorship much longer. They’ve destroyed America and most of Europe and the principles of Liberty we once enjoyed — and they’re making it worse for us all by the day. To hell with it all.
So do they pay the invading towelheads electronically? With money taken electronically from Swedes who work at honest jobs?
Once the interest rate on bank accounts goes negative, there is nothing to stop them from “raising” the negative rate. Slow confiscation of savings becomes rapid confiscation of savings.
Debtors rewarded and savers punished.
Q: How long will a society last with that system?
A: Until the money runs out.
There. I fixed it.
” (The theory is that by forcing people to spend cash rather than save it, you can spur economic growth.) “
That’s an interesting thought.
The Japanese over-save, too.
Maybe that’s the key to lifting their economy.
Economics in One LessonThere are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: “In the long run we are all dead.” And such shallow wisecracks pass as devastating epigrams and the ripest wisdom. . .
From this aspect, therefore, the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
Who is your favorite conservative author, sparklite2?
And more: “Nine-tenths of the economic fallacies that are working such dreadful harm in the world today are the result of ignoring this lesson.”
No, they're not just a wealth tax.
They are a disincentive to saving. The capital used to invest in new production (aka economic growth) comes from saving.
This policy (long dreamed of by Keynesians) will result in more economic activity and less investment. Economic decline.
My favorite conservative author(s) might be PJ O’Rourke or Tom Clancy. My favorite authors of any stripe might be Sinclair Lewis and Franz Kafka. What are yours?
That is the whole purpose, to reduce incentives to save and increase them to spend, to consume.
Obviously the saving-spending ratio is way out of balance in EU.
Those EU citizens are hiding their $$$.
That is why they are going cashless.
Cash in EU is like guns here, a threat to the powers.
A cashless country would be the ultimate dystopian nightmare. I would either try to overthrow it or flee it.
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