Saturday, October 31, 2015

INSANE Sweden Pulling ATMs, Wants to Ban Cash

Joe Salerno reports:
The Swedish government abetted by its fractional-reserve banking system is moving relentlessly toward a completely cashless economy.  Swedish banks have begun removing ATMs even in remote rural areas, and according to Credit Suisse the rule of thumb in Scandinavia is “If you have to pay in cash, something is wrong.”  Since 2009 the average annual value of notes and coins in circulation in Sweden has fallen more than 20 percent from over 100 billion to 80 billion kronor.  What is driving this movement to destroy cash is the desire to unleash the Swedish central bank to drive the interest rate down even further into negative territory.  Currently, it stands at -0.35 percent, but the banks have not passed this along to their depositors, because depositors would simply withdraw their cash rather than leave it in banks and watch its amount shrink inexorably toward zero.   However, if cash were abolished and bank deposits were the only form of money, well then there would be no limit on negative interest rate policy as banks would be able to pass these negative interest rates onto their depositors without adverse consequences.  With everyone's wages, salaries, dividends etc, paid by direct deposit into his bank account, the only way to escape negative interest rates would be to spend, spend, spend.  This, of course, is precisely  what the Keynesian economists advising governments and running central banks are aiming at....a pro-cash resistance movement is beginning to coalesce and the head of a security industry lobbying group relates,  “I’ve heard of people keeping cash in their microwaves because banks won’t accept it.”

NOTE: As Walter Block has correctly pointed out a "negative" interest rate is really a tax.

From Dr. Block's paper Negative Interest Rate: Toward a Taxonomic Critique:

A basic principle of Austrian economics is that the originary rate of interest (the rate of discount of future goods compared to present, otherwise identical, goods) can never be negative. The reason for this arises not because capital is productive, nor out of man's psychology. Nevertheless, in spite of the foregoing, there are many benighted souls who insist upon the possibility of a negative rate of originary interest. They are continually discovering cases which "prove" their conclusion. The number of such examples has reached such proportions that it seems advisable to take account of them in a systematic way. Accordingly, this paper is devoted to classifying them in a manner that makes the most intuitive sense: in accordance with the economic errors which are necessarily committed in their very statements.


  1. I really do believe that the negative interest rates many government are wishing to impose, if enacted, will have a good chance of ushering in the unintended consequence of bringing back gold/silver/commodity based currency. I don't think most governments will have the foresight to ban traditional money oriented commodities(gold/silver for example) before installing negative interest rates-

    They'll have to do that AFTER the rush out of their currency becomes evident after time. We'll see if I'm right or not as more governments try these shenanigans. I've underestimated the stupidity of general populations before. Maybe everyone will just sit around with shrinking piles of cash(not that that isn't happening now via inflation, it'll just be more evident)

  2. Big Brother tightens the noose on Sweden.

  3. Looks like the much talked about collapse of Sweden is coming on strong.