I can just imagine what people might think in Sweden if you had a few gold coins lying around. Clearly you must be some kind of drug dealer, terrorist, enemy of the state type.
We wrote earlier this year about the effort by some to rid the US economy of cash. Now they’re really trying to do it in Sweden.
A cashless society is “good” for central banks and central governments. For free people however it is a horrible idea.
Who would have ever thought that having some dollar bills in your wallet would become a political statement?
(From The Business Insider)
If banks charge customers negative rates of interest in a cashless society, those customers are not able to withdraw their money as cash to shield it, under their putative mattresses. Consumers’ only choice in such a scenario is to spend it or let the bank take it. (The theory is that by forcing people to spend cash rather than save it, you can spur economic growth.)
Rather than going further into negative territory — a move that carries political risks the more negative it becomes — the Riksbank chose instead to do another round of quantitative easing (a forced bond buying program that flushes more central bank cash into the economy).
But the pressure for negative interest rates to drive cash out of bank deposits and into the economy is building…
…And yesterday, Italy sold a two-year bond at an interest rate of -0.023%, which means investors have to pay to lend Italy money rather than receive interest on their loans. (Why would you buy such a bond? Well, if you believe that you’ll get even worse terms in the future from other creditors — hello, Sweden! — then suddenly -0.023% starts to look pretty good.)
The central banks are becoming more desperate. Another warning for us.