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🔥Jim made me do a thread, let's call it Keynesian Economics in 6 words: Savings is harmful to the economy.
In the beginning...
2016:
Deutsche Bank predicted cash won’t exist in 10 years.
Norway’s biggest bank called for the country to stop using cash.
Bank of Japan decided to impose negative interest rates in Japan for the first time ever.
European Central Bank announced it would phase out the €500 note. These notes represent around 30% of the physical euro notes in circulation..
India banned use of Rs 500 and 1,000 banknotes. PPL were stuck with high denomination bills must accept as little as Rs 700 in usable currency for every Rs 1000 of banned currency = 88% of the monetary value of the currency in circ, which completed 97% of consumer transactions
Central banks in Eu have little left to fight next recession as for them it quickly approaches. Depositors don’t like paying bank to deposit cash. Withdrawals reduce bank funding, forcing banks to sell bonds = pushes interest up, not what the Central banks want.
This pushes interest up, contrary to the plans of the central bank.
(noting that bank runs and interest rate pressure are the reasons why President Roosevelt outlawed gold in 1933. In the 1930s, gold was the escape route, so it was confiscated)
This takes out the persons ability to protect savings from confiscation through monetary inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold.
If cash exists, there’s no way of preventing depositors from taking their money out of the bank and parking it where the erosive effects of negative interest rates can’t reach it.
By forcing ppl/biz to convert their paper into bank deposits = they can be coerced to spend that money rather than save it because those deposits will carry the considerable costs of negative interest rates.

/end

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