The First Steps to Ending Currency
While I don’t want to sound like a broken record, it is becoming increasingly clear that the Federal Reserve, other central banks and governments around the world are laying the foundation for a negative interest rate environment that will more than likely be imposed during the next recession. Governments are involved because they play a very key role in any movement toward negative interest rates since it is obvious that if consumers are paying for the “privilege” of holding funds in a bank, many will simply convert at least some of their savings to cash, an issue that could prove to be problematic since the whole point of negative interest rates is to get consumers to spend more. Obviously, the only way to beat consumers at this game is to put an end to cash, one way or another.
A recent item by former Treasury Secretary under Bill Clinton, former Chief Economist for the World Bank and current Harvard University Professor, Lawrence Summers, in the Washington Post acts as a bit of a trial balloon for the impending “cashless society” by noting that “It’s time to kill the $100 bill”. In the item, Lawrence Summers cites his reasons for the abolishment of the 500 euro note, including the oft-cited “fact” that the criminal and terrorist spheres operate using high denomination currency. He points out that the 500 euro note is known as the “Bin Laden” and that the fact that $1 million in $100 notes weighs only 22 pounds compared to 110 pounds (filling four briefcases) if a $20 bill was the highest denomination note as shown on this figure:
Here is the closing paragraph of his item:
“Even better than unilateral measures in Europe would be a global agreement to stop issuing notes worth more than say $50 or $100.
…click on the above link to read the rest of the article…
