Once bonds yield 0% in a deflationary environment why would anyone hold on to bonds vs. cash? So QE means the government buys it's own bonds and that's about i

Once bonds yield 0% in a deflationary environment why would anyone hold on to bonds vs. cash? So QE means the government buys it's own bonds and that's about it. I'm talking about the long term rates, not the inter-day rates. Japan has sort of been in this situation and I think they even tried giving money to people and that didn't spur inflation/consumption. The salary loss aversion I'm talking about is taking a 10% pay cut in a deflationary environment vs. not getting a raise in a zero inflation environment or getting a raise smaller than inflation in an inflationary environment. The pay cut is going to feel much worse. That's loss aversion. From my exposure to behavioral economics through Dan Arieli I'd say the real loss of $1 is going to feel a lot worse than the nominal loss of $1 eroded by inflation. The latter feels like nothing which is why governments can use inflation as a tool so effectively. The imagery of high inflation is of people rushing with their bags of money to spend it before it becomes worthless... I've lived through some periods of high inflation and when interest rates were at over 10% I don't recall people rushing to invest, they rush to spend...