STAFF NEWS & ANALYSIS
Bloomberg: Abolish Cash to Create a Freer Market
By Daily Bell Staff – September 03, 2016
Want a Free Market? Abolish Cash … If you believe that government meddling in financial markets was responsible for the last recession and the lackluster recovery, you might be right. But probably not in the way you think. – Bloomberg
Some Bloomberg editorials are stranger than others. This one is especially strange because it argues that banning cash will create a stronger, freer market.
How does a government ban on certain items make anything freer? We don’t understand.
Here’s Bloomberg’s logic:
Two government mechanisms prevent real interest rates from getting too negative. The first is cash: As long as people can hold currency, which loses its value only at the rate of inflation, they won’t buy safe assets that yield even less.
The second is