Sweden closer to being the first cashless society with negative interest rates • Hacker News Board

Re: Sweden closer to being the first cashless society with negative interest rates

#21

Post by crimsonalucard » Thu, Oct 29, 2015, 8:47 AM UTC

toomuchtodo wrote: post #19

crimsonalucard wrote: post #9

This makes more sense economically. Physical products in general degrade in value over time. Cash by itself does not degrade in value over time. Using cash to represent products is a sort of mismatch. If the products' value degrades so should the value of the instrument representing said product. I don't know why they use negative savings interest rates when the government can provide the same service through QE or l…

QE causes asset bubbles. Negative interest rates promote (in theory) consumption over saving. Economically, these are uncharted waters.

It is uncharted waters, but in terms of symbolic representation of value, it is more accurate and thus may be more effective in practice. A dollar does not degrade in value the same way a physical product does, and thus a dollar is an inaccurate representation of the value of the product.

Inflation and deflation are side effects arising from this inaccurate representation. I will hold on to a dollar differently then I'd hold onto a physical product. Inaccurate representation therefore leads to unnatural behavior. Often the product a dollar represents can degrade to worthlessness while the dollar maintains value.

By making the dollar degrade explicitly , it forces people to treat a dollar as one would treat the majority of physical products in the real world: as an object that degrades with time.

Think about it. If my assets are represented by physical products with real value, what is inflation and deflation? The concepts becomes non-existent.

Re: Sweden closer to being the first cashless society with negative interest rates

#22

Post by geon » Thu, Oct 29, 2015, 9:05 AM UTC

x1798DE wrote: post #15

geon wrote: post #13

Earlier quoted context omitted.

> I know it's contrary to the literal meaning Also contrary to reality (source: me, being Swedish), and logic; A retailer will hardly refuse to accept cash (although buses do refuse cash to avoid the risk of robbery), while you might avoid buying if you need to handle cash.

That phrase is literally linked to an article called "Sweden: 'We don't accept cash'" ( https://www.credit-suisse.com/us/en/news-and-expertise/econo... ). It seems like what you are saying is that they are just making some sort of pun, but you can see why this would seem like it's about people being suspicious of cash.

At least 60 % of the "facts" in that article are made up.

Re: Sweden closer to being the first cashless society with negative interest rates

#23

Post by digitalengineer » Thu, Oct 29, 2015, 10:09 AM UTC

crimsonalucard wrote: post #9

This makes more sense economically. Physical products in general degrade in value over time. Cash by itself does not degrade in value over time. Using cash to represent products is a sort of mismatch. If the products' value degrades so should the value of the instrument representing said product. I don't know why they use negative savings interest rates when the government can provide the same service through QE or l…

> Cash doesn't degrade in value

Not YET. There are ideas floating around to let cash become less valuable. An ATM will print a datestamp and it will help degrade 'older' money… (Could not find the source, but it's not that complicated).

Re: Sweden closer to being the first cashless society with negative interest rates

#24

Post by digitalengineer » Thu, Oct 29, 2015, 10:10 AM UTC

wodenokoto wrote: post #2

Well, they can (hopefully) still buy foreign currency and Gold coins, such as Krugerrands.

Executive Order 6102: "forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States".