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RummyBoy · 10-27-2015, 09:57 AM

Have any of you heard about this? Im surprised its not bigger news lately. There's a lot of buzz going on about the US Fed considering to:

(1) Making Interest Rates negative (ie below zero).

Switzerland, Denmark and Sweden already doing it or were having negative rates before. So you lose money if you leave your cash in the bank. What's the point you might ask? Well basically the fed can't raise rates unless inflation hits target and we obviously now have deflation and the economy is falling off a cliff all of a sudden. By making rates negative they want to force people to help stimulate the economy by forcing people to buy goods, buy stocks, buy property etc, etc and make investments and drive inflation. It's also helpful as inflation means prices go up and government can tax gains on these things - you cannot tax deflation.

Result? Well if you have $100,000 in the bank and rates are -1% it means you have $99,000 at the end of the year but if inflation is 2% you've lost another $2000 in purchasing power so net loss is $3000 USD. End of the year you have $97,000.

The Fed's next move? Negative interest rates?commentary

(2) Totally banning the use of cash.

So why ban cash? They have to do this in order to stop people emptying their bank accounts and keeping the money in the form of cash. So the two things have to come together - scary thing is that we're being prepared for this in the media and some countries are already moving in this direction.

Citi Economist Says It Might Be Time to Abolish Cash - Bloomberg Business

Ban cash, end boom and bust - Telegraph

Abolish cash? You?d be losing a crucial part of free society - Telegraph

They've been talking about this in the US, UK and Europe and I think it would be a first time for most countries.

10-27-2015, 09:57 AM
RummyBoy Confirmed User Join Date: Dec 2009 Posts: 2,157	US Fed Plans Negative Rates & Ban On Cash Have any of you heard about this? Im surprised its not bigger news lately. There's a lot of buzz going on about the US Fed considering to: (1) Making Interest Rates negative (ie below zero). Switzerland, Denmark and Sweden already doing it or were having negative rates before. So you lose money if you leave your cash in the bank. What's the point you might ask? Well basically the fed can't raise rates unless inflation hits target and we obviously now have deflation and the economy is falling off a cliff all of a sudden. By making rates negative they want to force people to help stimulate the economy by forcing people to buy goods, buy stocks, buy property etc, etc and make investments and drive inflation. It's also helpful as inflation means prices go up and government can tax gains on these things - you cannot tax deflation. Result? Well if you have $100,000 in the bank and rates are -1% it means you have $99,000 at the end of the year but if inflation is 2% you've lost another $2000 in purchasing power so net loss is $3000 USD. End of the year you have $97,000. The Fed's next move? Negative interest rates?commentary (2) Totally banning the use of cash. So why ban cash? They have to do this in order to stop people emptying their bank accounts and keeping the money in the form of cash. So the two things have to come together - scary thing is that we're being prepared for this in the media and some countries are already moving in this direction. Citi Economist Says It Might Be Time to Abolish Cash - Bloomberg Business Ban cash, end boom and bust - Telegraph Abolish cash? You?d be losing a crucial part of free society - Telegraph They've been talking about this in the US, UK and Europe and I think it would be a first time for most countries.