Negative Interest Rates and the War on Cash (1)
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Irving Underhill City Bank-Farmers Trust Building, William & Beaver streets, NYC 1931 It’s been a while, but Nicole Foss is back at the
[See the full post at: Negative Interest Rates and the War on Cash (1)]The subject of Negative Interest Rates came up in a family conversation, and the resident teenager immediately pointed out the absurdity: “You won’t have to repay a loan; the loan will repay itself.”
A while back, I checked the fine print for buying US Treasury securities (like T-bills), and it clearly stipulates that you could get back less than you put in (i.e., a negative rate of return), depending on the auction results. “Safe haven” my foot.
Negative interest rates seems to be a classical case of over control. Modernity has brought society a facade of control. Control of the people, control of commerce, control of nature. Yet we are seeing the reality of that pretense of control. Breaking historical relationships, as in risk and interest, has not been to the benefit of humanity. Central banking control of interest rates, in furtherance of their ‘control’ of the business cycle, has broken a central control cycle of capital. We are starting to see to the fruits of natural control as well. Growth, as the guiding principal for a finite world, has it’s limits
Very interesting; even here in S.E. Asia where 90+% of transactions are in cash; there is a push to eliminate cash. Not going to happen anytime soon though and Asians trust cash and love gold. Credit requires infrastructure which is minimal here. In Thailand credit cards have been a disaster for a good many Thais who bought the concept; their income was just too low and their understanding of credit/debt non-existent.
I’m curious as to why most westerners eschew gold as a store of value. I do not recall a discussion here on this subject, which I find fascinating and important.
I think most people think in terms of gold bars rather than coins of the realm; which are far cheaper and fungible.And then there are the markets; ASEAN, China, Thai SET, NYSE, and Japanese markets.
All crap, all the time.
The “financials” are a mythical beast often identified as a Unicorn; LOL, aptly identified and anybody believing these fabrications deserves their just rewards = zero.
The scavengers have rich pickings; but only for the scavengers…The central planners clearly have no idea what they are doing – other than making things up as they go along. All the financial trickery and monetary machinations of the last 8 years are sowing the seebds of the next crisis. The longer this continues, the worse the eventual denouement will be.
All the while confidence is being slowly eroded. Pensions are being decimated. Savings rendered worthless, even pointless. The disconnects and the dissonance are growing more deafening by the day.
I believe this issue with credit (no longer capital) is inextricably linked to the problems with energy that Nicole has written about previously, and when the environmental degradation and resource depletion really begin to kick in in earnest, then it will be game over.
I think its also worth noting that the Japanese people and their culture are simply content with minimal consumption. There has long been an understanding of elegance through simplicity and minimalism. Smaller is better, waste is shameful and less is more. Perhaps they simply didn’t fit into the model of usury that the collaborative and cannibalistic global financiers bestowed upon their nation.
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