"Scrap Cash Altogether, Says BoE Chief Economist"

[Deleted]

Scrap cash altogether, says Bank of England’s chief economist

http://www.ft.com/cms/s/0/7967908e-5...06ccb37f2.html

For many, the idea of abandoning a system that has been with us for centuries in favour of a government-backed digital currency will seem a step too far. But Andy Haldane, the radical thinker at the BoE, argues that such a move would give the bank new flexibility in the event of another downturn.

The speech reflects policymakers’ nervousness that they lack reliable tools to boost spending. Other economists have also argued that cash restricts central banks’ ability to stimulate a depressed economy.

The Swiss and Swedish central banks have succeeded in setting negative interest rates. But most policymakers still believe in an “effective” lower band not far below zero. Some central bankers argue that if the lower band were removed, they would be better equipped to confront a slowdown.

Mr Haldane said he felt that the world was slipping into a “third phase” of the economic crisis that started in 2008, and that there could be a need to cut interest rates from their current historic low of 0.5 per cent, “to support UK growth and return inflation to target”.

He proposed a world without cash. “This would preserve the social convention of a state-issued unit of account and medium of exchange, albeit with currency now held in digital rather than physical wallets,” he said.

[Independent voter]

If you go to Silicon Valley a lot of people use their smartphones to pay for stuff, Apple Pay etc. I don't feel that my phone is secure enough to run something like Apple Pay. I don't use cash much any more, but I still use credit cards.

Mostly what I use cash for is paying non-techies for services like cutting brush or hauling trash away.

[Emageht Tsoluoy]

As soon as they hire competent monkeys to build the secure servers that control the funds, instead of the "goodenuff 4 gummint wurk" jackalopes that built every government website that has ever existed in the history of ever, this may be an attractive option.

Also; only if the CIA and the rest of the alphabet soup-patrol are incapable of fucking with it.

So basically never gonna happen in my lifetime.

[Girrag]

So Putin could control all of my money. No, thanks.

[Deleted]

how is a Chief Economist Bind on Equip?

[Girrag]

Scrap cash altogether, says Bank of England’s chief economist
The speech reflects policymakers’ nervousness that they lack reliable tools to boost spending. Other economists have also argued that cash restricts central banks’ ability to stimulate a depressed economy.

And that part is pretty simple. Just make something that I really need. No, I don't need a new smartphone each year.

[I Push Buttons]

Can you like quote the specifics of his plan?

The site you linked is behind a paywall and won't even let you look at the article without making an account...

Would they like issue everyone a debit account at the same time they issue them a social security number?

[Glaziola]

And that part is pretty simple. Just make something that I really need. No, I don't need a new smartphone each year.

Imagine you can only pay with your smartphone and you cant update your paying app because of out of date operating system lol. You are screwed.
Terrible idea.

[Deleted]

With cash comes corruption, so yeah. Get rid of it, the sooner the better. Or at the very least limit it, so you can only use it for very small purchases (<50€/$).

[Ghostpanther]

I see one major issue with this concept. What happens if you have a situation like in Greece recently? Or a corrupt government who for whatever reasons wants to limit how much you can spend or what you can spend it on. Then in a lot of cases people would revert back to trading goods. Give me some water and I will give you a dozen eggs. Not saying it is a totally bad thing, it would have it's advantages.

[Deleted]

I honestly see this happen in my lifetime but I'm not looking forward to it at all.

[Cosmic Janitor]

I'm against everything that gives the government more power to silence dissidents, so no.

[Karrotlord]

Cool, but what if a Quarian steals my credit chit?

[Reeve]

I wouldn't mind doing away with paper/coin currency.

[klogaroth]

Pretty much every legit transaction you make touches a bank account anyway, and bank accounts haven't been backed by physical currency for a long, long time.

More or less the only time you need to use physical currency is if the technology to allow a digital transaction isn't there yet, or if you are deliberately trying to keep something off books.

Or if you're in one of those places that charge you to use your card........ I dislike those.

[Deleted]

I see one major issue with this concept. What happens if you have a situation like in Greece recently? Or a corrupt government who for whatever reasons wants to limit how much you can spend or what you can spend it on. Then in a lot of cases people would revert back to trading goods. Give me some water and I will give you a dozen eggs. Not saying it is a totally bad thing, it would have it's advantages.

Part of the advantage of no cash is the ability to set negative interest rates.

That means incomprehensibly cheap borrowing, which should mean you can't have debt refinancing crises like Greece.

[SL1200]

Would kill the black market. They don't want to do that even if they say they do. Will never happen.

[mvaliz]

Would kill the black market. They don't want to do that even if they say they do. Will never happen.

Nothing ever kills the Black Market. If this happened they'd a) find ways to launder E-Currency, or b) Barter for direct goods/services instead.

[enragedgorilla]

If you go to Silicon Valley a lot of people use their smartphones to pay for stuff, Apple Pay etc. I don't feel that my phone is secure enough to run something like Apple Pay. I don't use cash much any more, but I still use credit cards.

Mostly what I use cash for is paying non-techies for services like cutting brush or hauling trash away.

I am with you to a point, however Your phone can be hacked to get to the info needed to raid your bank account....alas so can your CC/Debit cards .I would argue that currently it is easier to hack a CC than it is a pass protected "secured" cellphone.
Not much , but still.

Having said that, I still have never used my linked phone to make a purchase (yet), but knowing it is there just in case is nice.I t is kind of like having a back up copy of your cc on hand.

i think we will keep cash in some form for a long time to come , it will just become less and less common to see it in larger purchases , it will be for things under the $10 ish mark , anything over that you would use your cc/debit/applepay etc.

Until the power grid gets attacked and you can't use your phone...then again you wouldn't be able to get to your money in the bank either so....it would just be a case of Your boned instantly with your phone OR wait in line at a bank and then be boned.

[Stormdash]

Have your only measure of currency by a number in a computer that's entirely at the control of the state? What could go wrong?