Once upon a time there was a world where borrowers paid lenders, markets were allowed to fall, while debasing the currency was a punishable offence. Come to think of that, this was our world not that long ago – before the rise of the central banking system. These days we have negative interest rates, the Greenspan put and QE to infinity.
Most of those things would not have been possible without the intellectual legacy of John Maynard Keynes. He died in 1946, but his ideas – such as euthanasia of a rentier – live on. Let us be honest: in a world where stock markets have left fundamentals behind and fixed income instruments have a negative yield, it is not a huge leap to reach a conclusion that storing cash is actually a least bad choice.
Of course, the powers that be can not have that: after all, a person whose wealth is beyond their control is a potential subversive. Solution? Ban cash.
Yes, you read it correctly. In what can only be described a through-the-looking-glass moment, more and more economists are calling for a ban on cash. Their rationale? Twofold: it will help fight terrorism (“the innocent have nothing to fear” – now where have we heard that before) and it will make the central bank monetary policy more efficient:
- Kenneth Rogoff chimes in – his mastery in Excel apparently forgotten
- as does a representative of TBTF
- and we can not forget Europe: at least this one is honest, as he declares that the only reason is to remove the hindrance to central bank policy. I mean, they are calling all the shots anyway, so why bother pretending?
This absurd trend seems to be spreading. Interesting times lie ahead.