Paper Currency Is The New Gold, is it growth-constraining and deflationary?

Paper Currency Is The New Gold

Well the new barbarous relic is physical cash.

Like gold, cash is physical money.

Like gold, cash is still fetishized.

And like gold, cash is a costly drain on the economy.

First, there’s the simple cost of handling cash .

If all central bank liabilities were electronic, paying a negative interest on reserves (basically charging a fee) would be trivial. But as long as central banks stand ready to convert electronic deposits to zero-interest paper currency in unlimited amounts, it suddenly becomes very hard to push interest rates below levels of, say, -0.25 to -0.50 %, certainly not on a sustained basis.

That’s growth-constraining and deflationary

http://www.businessinsider.com/cash-is-the-new-gold-2014-6?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29

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