To fight deflation, abolish cash. Could Japan make reality of ‘science fiction’?

halight

http://business.timesonline.co.uk/tol/business/economics/article6531299.ece



Dont Think it will ever happen but an intresting idea?

Jonbvn

halight wrote: »

http://business.timesonline.co.uk/tol/business/economics/article6531299.ece

Dont Think it will ever happen but an intresting idea?

Having lived in Japan, I was initially surprised how most personal financial transactions were done using cash. Credit is just not part of Japanese culture.

purch

the concept that a nominal rate of zero — as Japan has now lived with for much of the past decade — may be too high. In Japan’s case, the theory would suggest that nominal rates of -4 per cent might be closer to what is required to rescue the economy from another deflationary spiral :eek:

That'll cheer up dopester !!!

dopester

purch wrote: »

That'll cheer up dopester !!!

Whoaa.. I floated this idea on my own thinking back in early March.
http://forums.moneysavingexpert.com/showpost.html?p=19

It would have to be carried out near simultaneously in major economies, but I'd like to see a ban of paper money, and no more printing of paper money.

All notes already in issuance can still be spent for 12 months or exchanged for electronic banking credit.

That way all transactions in the economy would have to be carried out electronically like with credit cards, debit cards, BACs, Direct Debit ect, for all investments and deposits, purchases and payments.

Cash hoards would have to be returned back into the system to have any possible productive use. If need be, credits just sat in deposit if that is what the saver wants, or there to be spent, or invested - all done by electronic format.

It has benefits for governments for sure in fighting deflation from my point-of-view.

I'd only like to see it, if the credit you got in exchange was more secure than shaky promises and security of credit money is today.

dopester

The reason I thought it would have to be carried out simultaneously in major economies.... is because otherwise, say it was the pound only to be scrapped and all going electronic... perhaps there would be risk of a major flight from sterling in to other currencies, like the yen and the dollar.... causing the pound to nosedive.

It might not be as much of an issue with the yen alone... although there might be fear that with such a major change of no paper money.. it could give authorities too much power if they chose to exercise it.*

If you have option of using cash... you can withdraw some and you can't be tracked and followed, you have choices, not every penny you have accounted for in the system by any authority.

* "Power has always sought the readiest road to wealth, by attacking those who were in possession of it."

In a way though it would be kind of funny... all the scaremongering people have done about sending the printing presses on to super-fast speeds - despite there being a limit when it hurts economies a lot more than deflation - but they end up switching the printing presses off, closing them down, to gather dust and cobwebs.

A time-travel short story I read last week had the guy, having gone back a touch over a 1000 years, earnestly explaining the paper in his leather folding wallet was money and they rolled around laughing.

michaels

I think we should close and delete this thread immediately - imagine how much drool their would be in the 'nulabour stasi' HQ at the thought of knowing in real time every transaction made...

dopester wrote: »

Whoaa.. I floated this idea on my own thinking back in early March.
http://forums.moneysavingexpert.com/showpost.html?p=19



It has benefits for governments for sure in fighting deflation from my point-of-view.

I'd only like to see it, if the credit you got in exchange was more secure than shaky promises and security of credit money is today.

System

I think we should start off small, and abolish copper coins, my wallet is bulging with worthless shrapnel at the mo.

JonnyBravo

dopester wrote: »

A time-travel short story I read last week had the guy, having gone back a touch over a 1000 years, earnestly explaining the paper in his leather folding wallet was money and they rolled around laughing.

Rolling around laughing??

I'd have thougt they'd have been busy amusing themselves by burning him for witchcraft. Or did they get a lot of time travellers back then?

:rolleyes:

lostinrates

Joeskeppi wrote: »

I think we should start off small, and abolish copper coins, my wallet is bulging with worthless shrapnel at the mo.

DH banked a three figure number of coppers recently: I was horrified. However, I went round the world on 20p coins.

purch

explaining the paper in his leather folding wallet was money and they rolled around laughing.

The same thing happens to me every time I see a 50 Euro note !!! :eek:

tomterm8

halight wrote: »

http://business.timesonline.co.uk/tol/business/economics/article6531299.ece



Dont Think it will ever happen but an intresting idea?

I hope it never happens. Cash is a great way to avoid Mr Evil Taxman.