And you thought we were a bunch of crankypants for warning of negative interest rates and a cashless society last year. I can’t wait to speak to Tim Price about the editorial from Bloomberg published over the weekend (“Bring on the cashless future”). Don’t read it if you have high blood pressure.
But do read this excerpt:
For much of the past decade, central banks in the rich world have been hampered by what economists call the zero lower bound, or the inability to impose significantly negative interest rates. Persistent low demand and high unemployment may sometimes require interest rates to be pushed below zero – but why keep money in a deposit whose value keeps shrinking when you can hold cash instead? With rates near zero, that conundrum has led policy makers to novel and unpredictable methods of stimulating the economy, such as large-scale bond-buying.
A digital legal tender could resolve this problem. Suppose the central bank charged the banks that deal with it a fee for accepting paper currency. In that way, it could set an exchange rate between electronic and paper money – and by raising the fee, it would cause paper money to depreciate against the electronic standard.
This would eliminate the incentive to hold cash rather than digital money, allowing the central bank to push the interest rate below zero and thereby boost consumption and investment. It would be a big step toward doing without cash altogether.
It doesn’t matter that it’s your paper money depreciating in relation to the “digital legal tender”. And it doesn’t really matter if you would have to pay a “fee” in order to hold and use cash. And it doesn’t really matter that you may be at a point in your life where you want to husband your savings, reduce consumption and live with a bit of thrift.
None of what you want matters
Are you starting to get that? Cash gets in the way of central bankers and policy makers getting what they want. As I mentioned in my Facebook video on Friday: “Nummus Delenda Est!” Cash must be destroyed.
Tim started The London Investment Alert to bring this message to British savers and investors. It’s also why he wrote The War on Cash. It’s an evolving story. And frankly, there is a high degree of scepticism among the British public that the financial authorities are systematically trying to reduce your financial freedom of action. The London Investment Alert is about countering the official view and mainstream media with better information and better intelligence about what is happening… and what could happen.
It’s about learning more, and building your vocabulary and skills as an investor
Charlie Morris, as investment director of The Fleet Street Letter, keeps an eye on Westminster politics. But the vast majority of his time is spent watching capital markets for movements in asset classes (stocks, bonds, currencies, and commodities) and then getting you into the right investment at the right time. It’s what Charlie did for 17 years at HSBC running the Absolute Returns Fund.
The Price Report is an extension of Tim’s Austrian (economics) worldview, coupled with his grounding in Benjamin Graham’s value investing. Tim manages money for a living. But unless you have money you want him to manage directly, the only way you can see what he’s telling his clients is to read The Price Report. It includes his current asset allocation strategy and his stock selections (usually deep value, but always a thoughtful mix with low-risk returns in mind).
If you’re new to Capital and Conflict, I thought those explanations might help. Most of the investment ideas I write about come from the editors whose research I publish. I’m happy to give it (and my time) away here because one of our goals is to be a source of alternative information for you. But of course, we also sell the research (with stock recommendations and commentary) in the form of newsletters.
If that’s what you’re looking for, it helps to know how the publications are different. Really, they’re as different as the men and women who write them. That’s the great thing about being an independent publisher. You’re not beholden to “a house view”. You find smart, articulate and experienced people who believe they have something important to say about money and investments, and you get the word out.
Category: Central Banks