{"id":7536,"date":"2015-04-24T06:47:08","date_gmt":"2015-04-24T11:47:08","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7536"},"modified":"2015-04-24T06:47:08","modified_gmt":"2015-04-24T11:47:08","slug":"largest-bank-in-america-joins-war-on-cash","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7536","title":{"rendered":"Largest Bank In America Joins War On Cash"},"content":{"rendered":"

Largest Bank In America Joins War On Cash<\/a><\/h3>\n

The war on cash is escalating.<\/strong><\/em>\u00a0Just a week ago,\u00a0the infamous Willem Buiter, along with Ken Rogoff, voiced their support for a restriction (or ban altogether) on the use of cash<\/a>\u00a0(something that was already been implemented in Louisiana in 2011 for used goods<\/em><\/a>). Today, as Mises’ Jo Salerno reports, the war has acquired a powerful new ally in Chase, the largest bank in the U.S., which has enacted a policy\u00a0restricting the use of cash in selected markets<\/strong>;\u00a0bans cash payments for credit cards, mortgages, and auto loans; and disallows the storage of “any cash or coins” in safe deposit boxes.<\/strong><\/p>\n

Buiter defended his “controversial” call for a ban on cash, as\u00a0Bloomberg reports<\/a>:<\/p>\n

\u201cThe world\u2019s central banks have a problem. When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy.\u00a0But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut \u2014 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.<\/em><\/strong><\/p>\n

In a\u00a0new piece, Citi\u2019s 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.\u00a0According 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?\u00a0<\/em><\/strong>Cash therefore gives people an easy and effective way of avoiding negative nominal rates. Buiter\u2019s note suggests three ways to address this problem:<\/p>\n

    \n
  1. Abolish currency.<\/em><\/strong><\/li>\n
  2. Tax currency.<\/em><\/strong><\/li>\n
  3. Remove the fixed exchange rate between currency and central bank reserves\/deposits.<\/em><\/strong><\/li>\n<\/ol>\n<\/blockquote>\n

    …click on the above link to read the rest of the article…<\/p>\n

    \u00a0<\/i><\/b><\/p><\/blockquote>\n

     <\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Largest Bank In America Joins War On Cash The war on cash is escalating.\u00a0Just a week ago,\u00a0the infamous Willem Buiter, along with Ken Rogoff, voiced their support for a restriction (or ban altogether) on the use of cash\u00a0(something that was already been implemented in Louisiana in 2011 for used goods). Today, as Mises’ Jo Salerno […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1035,4928,951,4790,4927,4789],"class_list":["post-7536","post","type-post","status-publish","format-standard","hentry","category-economics","tag-cash","tag-chase-bank","tag-currency","tag-ken-rogoff","tag-war-on-cash","tag-willem-buiter"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7536","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7536"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7536\/revisions"}],"predecessor-version":[{"id":7537,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7536\/revisions\/7537"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7536"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7536"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7536"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}