Thread by @gladstein

1/ New @WSJ article laying out the statist case for Central Bank Digital Currencies and the war on cash:

“If people can’t hoard physical money, it becomes much easier to cut rates far below zero”

🧵 with key quotes👇

wsj.com/articles/digit…

2/ “If people can’t hoard physical money, it becomes much easier to cut interest rates far below zero; otherwise the zero rate on bank notes stuffed under the mattress looks attractive. And if interest rates can go far below 0, monetary policy is suddenly much more powerful”

🥶

3/ “Initially, CBDCs will almost certainly be designed to behave as much like ordinary bank notes as possible, to make their adoption easy and minimize disruption, while use of physical cash will be allowed to wither away. But... monetary caution is unlikely to last.”

🥶

4/ “Central banks are making lots of effort to make sure that CBDC isn’t seen as a possible monetary-policy instrument,” says Benoît Coeuré, head of the BIS innovation hub and a former ECB policy maker.

“My take is that that discussion will come only later”

🥶

5/ “If rates can be taken deeply negative it would shift the long-term outlook for interest rates and inflation. The ECB has a rate of -0.5%, the Bank of Japan -0.1% and the Swiss National Bank -0.75%. But none think they can go below -1%”

Emphasis on “none think”

6/ “The main limit is that deeply negative rates would encourage people to switch to bank notes to “earn” zero on their savings, instead of losing money.”

In other words, physical cash is a last defense against time theft in fiat land.

7/ “The monetary impact of removing, or reducing, this effective lower bound, as economists call it, is profound. Instead of turning to new + still unproven tools like the bond-buying of quantitative easing, central banks would be able to keep cutting rates when a crisis hit”

🥶

8/ “Resistance from the public would make policy makers cautious about such radical policies... But as Mr. Coeuré, who oversaw bond-buying while at the ECB, could tell you, what once seemed to be an impossibly extreme monetary policy can quickly become the norm.”

🥶

9/ The entire article is basically a discussion of how govts and central banks can/will reduce the financial freedom of citizens to prop up ever-devaluing state debt.

Thankfully, individuals worldwide have the option of peacefully protesting this and opting out into Bitcoin ✌️