Economist Says Time To Abolish Cash

Citi Economist Says It Might Be Time to Abolish Cash

The world's central banks have a problem.
When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut — they can bring interest rates to zero, but reducing them further below that is fraught with problems, the biggest of which is cash in the economy.
In a new piece, Citi's Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates.
Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction?
Cash therefore gives people an easy and effective way of avoiding negative nominal rates.

 My view:

One needs to read the whole article in Bloomberg to appreciated how utterly barking mad the world of economics and central banks has become.

We must remember that the idea proposed in the article is not the ramblings of someone in a lunatic asylum, but of an educated person whose articles are frequently published.

Central Bankers and their associates in the field of economics have lost touch with reality with the idea of punishing holders of cash (cash is essentially a zero coupon government bond) because they choose not to spend it.

This point is where the totalitarian rears its ugly head.  The message is essentially this - if you do not spend money when we tell you to, we will gradually steal it from you by charging you to keep in the the bank.

Our government taskmasters have lost all common sense and the public has still not realized how serious the ever expanding intrusion of government control over their lives has reached.  Individual liberty is under threat in a way that even the old Soviet central control system could not achieve.

Reason and personal liberty are being sacrificed on the altar of total control and domination.