Links for 21st June 2009

Fresh from the clogged tubes of teh intarwubs…

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

    "Without physical cash, a central bank can set rates exactly where it likes, runs the argument. Mr Jerram said: “At the heart of the problem of achieving negative nominal interest rates is the idea that physical currency is an anonymous bearer bond with a nominal interest rate of zero.” While a central bank can impose positive or negative rates on non-physical assets, transmitting those rates to physical currency is a huge challenge. By permanently removing cash from a system, he added, policymakers are robbed of the excuse that zero is the lowest that nominal rates can go as a deflation-fighting tool."

    Tagged with: japaneconomicscurrencycashdeflationfinancebanking

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