It’s not hard to guess the logical endpoint of this tremendous inversion of capitalism. That’s right — an end to even the possibility of savings. And the most logical way to end the possibility of savings is to eliminate cash currency.
Many observers worried about this turn of events can only voice their fears at the margins of respectable economic commentary. Unfashionable goldbugs lament the many signals that a “war on cash” is afoot: caps on bank withdrawals and mandatory reporting of large ones; anti-cash rhetoric from politicians who tie hard currency to crime, terrorism, and other go-to nightmares; and the discouragement of cash hoarding as a means to escape the cost of negative interest rates at European banks.
But here’s the thing: Even the big banks have become increasingly brazen in their anti-cash agenda. Citi’s Willem Buiter, for instance, put the matter plainly: Despite the disruptions and headaches involved, cash should be wiped out, and replaced with purely electronic funds. He’s hardly alone; star Harvard economist Ken Rogoff agrees, calling paper currency “unfit for a world of high crime and low inflation.”