STAFF NEWS & ANALYSIS

Bloomberg: Abolish Cash to Create a Freer Market

By Daily Bell Staff – September 03, 2016

Want a Free Market? Abolish Cash … If you believe that government meddling in financial markets was responsible for the last recession and the lackluster recovery, you might be right. But probably not in the way you think.  – Bloomberg

Some Bloomberg editorials are stranger than others. This one is especially strange because it argues that banning cash will create a stronger, freer market.

How does a government ban on certain items make anything freer? We don’t understand.

Here’s Bloomberg’s logic:

Two government mechanisms prevent real interest rates from getting too negative. The first is cash: As long as people can hold currency, which loses its value only at the rate of inflation, they won’t buy safe assets that yield even less.

The second is