by Philippe Gastonne, The Daily Bell:
[Citigroup Chief Economist Willem] Buiter’s solution to cash’s ability to allow people to avoid negative deposit rates is to abolish cash altogether. – Bloomberg Business, April 10, 2015
Fractional reserve bankers love money. They don’t love cash, in part because it reduces their ability to pyramid loan on top of loan and create new money from which they can extract interest. They have always had to tolerate its existence. Now, with the growing prevalence of negative interest rates, they see a possible solution.
The Bloomberg article explains the thought process. Central banks think they can boost the economy by reducing interest rates. This weapon loses effectiveness when rates drop below zero, as is now the case in parts of Europe.
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