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The anti-cash animus in Sweden

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All that wonderful seeming social democracy exhibited by certain of the nations in Europe, Sweden notable among them, can come along with a frightening degree of social control. Gold-plated chains are still chains.

And the degree of anti-cash animus now exhibited by the government of Sweden is an outstanding example of the clinking of such chains.

  Jim Edwards for Business Insider reports:

I'll say no more.

Comments

  1. Christopher,

    I had not previously encountered the term "negative interest rate." Logically, it must mean that the lender pays the borrower instead of vice versa. If interest rates are negative, then it still might pay to lend your money to a bank for safe keeping.

    But the link you provide states, "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."

    How does "a cashless society" come into this? It seems to be a concept that is separate from negative interest rates. And, does "let the bank take it" mean "let the bank hold it until you spend it? If so, why "take," which is usually used to mean "keep"?

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  2. A negative interest rate applies not just to lenders and borrowers as usually understood, but to banks and depositors. (Depositors = lenders.) You can have a savings account, but it doesn't accumulate money -- in fact you're paying the bank for the privilege of letting them hold on to your money. So you are letting the bank "take" your savings, even though only by relatively small increments.

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  3. Thanks. That answers my "take" question. But why can't the depositor withdraw his money in cash?

    And a new question: If you google "negative interest rates," you'll see that Janet Yellen promises them. What's going on in the United States? You mentioned only Sweden.

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  4. That's the whole point of the disappearance of cash-dispensing ATMs from some regions in Sweden and other govt inspired move toward a cashless society. If you COULD withdraw cash, you'd be able to serve as you own bank, with an interest rate of 0. But the goal of the social experiment is a society in which they only way to get money out of a bank account is to do something else wit it: transfer it to another bank, or buy something. Anybody who wants to save will have to use their krona to buy another currency, euros or dollars or whatever, and keep them in bank accounts in other countries. OR ... buy valuable things, that could be used for re-sale in the future, and that may even appreciate in value in the meantime, getting one's self back to an approximation of positive interest rates.

    The idea is that hoarding is a bad thing, that an economy is stimulated as people buy and invest rather than putting money 'aside for a rainy day,' so the latter should be impeded. In part, the idea is also that people with cash (and savings) are probably up to no good.

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