6 ms·

Sweden closer to being the first cashless society with negative interest rates

10 points by ogezi 11y ago

wodenokoto 11y ago
Well, they can (hopefully) still buy foreign currency and Gold coins, such as Krugerrands.
- digitalengineer 11y ago
  Executive Order 6102: "forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States".
draw_down 11y ago
> Credit Suisse says the rule of thumb in Scandinavia is: "If you have to pay in cash, something is wrong." I hope people don't start talking like this in the US. Something about that statement is very disturbing.
- geon 11y ago
  How? You are not forced to pay electronically. You just have an option to cash. The only time I use cash would be if I buy something from the swedish equivalent of craigslist, or in a farmers market. And even there it would be common to use Swish/Square.
  - x1798DE 11y ago
    I read that statement more as, "If you refuse to pay electronically" than "if you have no electronic means of payment." I know it's contrary to the literal meaning, but it feels like the unstated assumption is that you would only pay in cash if you must, not out of a general preference for privacy.
    - geon 11y ago
      > I know it's contrary to the literal meaning Also contrary to reality (source: me, being Swedish), and logic; A retailer will hardly refuse to accept cash (although buses do refuse cash to avoid the risk of robbery), while you might avoid buying if you need to handle cash.
      - x1798DE 11y ago
        That phrase is literally linked to an article called "Sweden: 'We don't accept cash'" (https://www.credit-suisse.com/us/en/news-and-expertise/economy/articles/news-and-expertise/2015/03/en/sweden-we-dont-accept-cash.html https://www.credit-suisse.com/us/en/news-and-expertise/econo...). It seems like what you are saying is that they are just making some sort of pun, but you can see why this would seem like it's about people being suspicious of cash.
        geon 11y ago
        At least 60 % of the "facts" in that article are made up.
  - draw_down 11y ago
    How it's phrased, sounds like people who sell things or services must have it as an option. But also, what's wrong with cash? Why is it a problem if you have to use it?
f3llowtraveler 11y ago
Bitcoin.
- tolle 11y ago
  Is honestly more of a hassle for the average consumer then existing solutions.
- maxander 11y ago
  The suggestion that Bitcoin would act as a replacement for government bonds in any foreseeable future would reduce most economists to tears of laughter. The interest rate tweaks being discussed here are negligible compared to the market rate fluctuations of Bitcoin on a typical week.
yAnonymous 11y ago
So in a cashless society, what happens when you cancel your bank account?
geon 11y ago
Extremely sensationalized headline. The only source for the microwave thing is hearsay from some policeman.
- deleted 11y ago
  [deleted]
crimsonalucard 11y ago
This makes more sense economically. Physical products in general degrade in value over time. Cash by itself does not degrade in value over time. Using cash to represent products is a sort of mismatch. If the products' value degrades so should the value of the instrument representing said product. I don't know why they use negative savings interest rates when the government can provide the same service through QE or lowering loan interest rates.
- cyrus9020 11y ago
  Cash can "degrade", it's called inflation.
  - crimsonalucard 11y ago
    That's different from value degradation. Additionally if you read further you'd see that I addressed inflation. Interest for loans and QE are all methods the government uses to inflate cash.
- toomuchtodo 11y ago
  QE causes asset bubbles. Negative interest rates promote (in theory) consumption over saving. Economically, these are uncharted waters.
  - crimsonalucard 11y ago
    It is uncharted waters, but in terms of symbolic representation of value, it is more accurate and thus may be more effective in practice. A dollar does not degrade in value the same way a physical product does, and thus a dollar is an inaccurate representation of the value of the product. Inflation and deflation are side effects arising from this inaccurate representation. I will hold on to a dollar differently then I'd hold onto a physical product. Inaccurate representation therefore leads to unnatural behavior. Often the product a dollar represents can degrade to worthlessness while the dollar maintains value. By making the dollar degrade explicitly , it forces people to treat a dollar as one would treat the majority of physical products in the real world: as an object that degrades with time. Think about it. If my assets are represented by physical products with real value, what is inflation and deflation? The concepts becomes non-existent.
HappyFunGuy 11y ago
It is a national security issue to have cash available for use during a time of war, or general internet failure, or natural disaster. Tying your national security to the health of the internet is unwise.
gizi 11y ago
It will not work. If there is a need for fiat cash in the economy, they will start using euros or dollars instead of Swedish crowns (SEK). Injecting foreign cash back into the cashless SEK economy amounts to selling these foreign banknotes at any, available exchange point. They cannot reasonably ban these transactions, because foreigners bring these foreign bank notes along with them when they visit Sweden. If they insist on addressing that issue anyway, they will end up introducing Venezuela-style, self-defeating, absurdistan regulations that will make the situation only worse. They will be up against a growing number of people trading against them, in order to defeat such regulations, and to make money in the process of doing so. As always, it will be full of opportunities to thoroughly bleed them while making a killing. So, a Swedish economy without SEK bank notes is possible, but not necessarily one without cash. If that is the situation that materializes, they will have made the situation worse for them (foreign cash) instead of better (Swedish cash). You cannot outsmart economic fundamentals, because there will always be lots of money in punishing off such attempts.

10 points by ogezi 11y ago

wodenokoto 11y ago

Well, they can (hopefully) still buy foreign currency and Gold coins, such as Krugerrands.

digitalengineer 11y ago
Executive Order 6102: "forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States".

draw_down 11y ago

> Credit Suisse says the rule of thumb in Scandinavia is: "If you have to pay in cash, something is wrong." I hope people don't start talking like this in the US. Something about that statement is very disturbing.

geon 11y ago
How? You are not forced to pay electronically. You just have an option to cash. The only time I use cash would be if I buy something from the swedish equivalent of craigslist, or in a farmers market. And even there it would be common to use Swish/Square.
- x1798DE 11y ago
  I read that statement more as, "If you refuse to pay electronically" than "if you have no electronic means of payment." I know it's contrary to the literal meaning, but it feels like the unstated assumption is that you would only pay in cash if you must, not out of a general preference for privacy.
  - geon 11y ago
    > I know it's contrary to the literal meaning Also contrary to reality (source: me, being Swedish), and logic; A retailer will hardly refuse to accept cash (although buses do refuse cash to avoid the risk of robbery), while you might avoid buying if you need to handle cash.
    - x1798DE 11y ago
      That phrase is literally linked to an article called "Sweden: 'We don't accept cash'" (https://www.credit-suisse.com/us/en/news-and-expertise/economy/articles/news-and-expertise/2015/03/en/sweden-we-dont-accept-cash.html https://www.credit-suisse.com/us/en/news-and-expertise/econo...). It seems like what you are saying is that they are just making some sort of pun, but you can see why this would seem like it's about people being suspicious of cash.
      - geon 11y ago
        At least 60 % of the "facts" in that article are made up.
- draw_down 11y ago
  How it's phrased, sounds like people who sell things or services must have it as an option. But also, what's wrong with cash? Why is it a problem if you have to use it?

f3llowtraveler 11y ago

Bitcoin.

tolle 11y ago
Is honestly more of a hassle for the average consumer then existing solutions.
maxander 11y ago
The suggestion that Bitcoin would act as a replacement for government bonds in any foreseeable future would reduce most economists to tears of laughter. The interest rate tweaks being discussed here are negligible compared to the market rate fluctuations of Bitcoin on a typical week.

yAnonymous 11y ago

So in a cashless society, what happens when you cancel your bank account?

geon 11y ago

Extremely sensationalized headline. The only source for the microwave thing is hearsay from some policeman.

deleted 11y ago
[deleted]

crimsonalucard 11y ago

This makes more sense economically. Physical products in general degrade in value over time. Cash by itself does not degrade in value over time. Using cash to represent products is a sort of mismatch. If the products' value degrades so should the value of the instrument representing said product. I don't know why they use negative savings interest rates when the government can provide the same service through QE or lowering loan interest rates.

cyrus9020 11y ago
Cash can "degrade", it's called inflation.
- crimsonalucard 11y ago
  That's different from value degradation. Additionally if you read further you'd see that I addressed inflation. Interest for loans and QE are all methods the government uses to inflate cash.
toomuchtodo 11y ago
QE causes asset bubbles. Negative interest rates promote (in theory) consumption over saving. Economically, these are uncharted waters.
- crimsonalucard 11y ago
  It is uncharted waters, but in terms of symbolic representation of value, it is more accurate and thus may be more effective in practice. A dollar does not degrade in value the same way a physical product does, and thus a dollar is an inaccurate representation of the value of the product. Inflation and deflation are side effects arising from this inaccurate representation. I will hold on to a dollar differently then I'd hold onto a physical product. Inaccurate representation therefore leads to unnatural behavior. Often the product a dollar represents can degrade to worthlessness while the dollar maintains value. By making the dollar degrade explicitly , it forces people to treat a dollar as one would treat the majority of physical products in the real world: as an object that degrades with time. Think about it. If my assets are represented by physical products with real value, what is inflation and deflation? The concepts becomes non-existent.

HappyFunGuy 11y ago

It is a national security issue to have cash available for use during a time of war, or general internet failure, or natural disaster. Tying your national security to the health of the internet is unwise.

gizi 11y ago

It will not work. If there is a need for fiat cash in the economy, they will start using euros or dollars instead of Swedish crowns (SEK). Injecting foreign cash back into the cashless SEK economy amounts to selling these foreign banknotes at any, available exchange point. They cannot reasonably ban these transactions, because foreigners bring these foreign bank notes along with them when they visit Sweden. If they insist on addressing that issue anyway, they will end up introducing Venezuela-style, self-defeating, absurdistan regulations that will make the situation only worse. They will be up against a growing number of people trading against them, in order to defeat such regulations, and to make money in the process of doing so. As always, it will be full of opportunities to thoroughly bleed them while making a killing. So, a Swedish economy without SEK bank notes is possible, but not necessarily one without cash. If that is the situation that materializes, they will have made the situation worse for them (foreign cash) instead of better (Swedish cash). You cannot outsmart economic fundamentals, because there will always be lots of money in punishing off such attempts.