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A Cashless Society
Are You Ready for Real-Time Inflation?
The Fed’s next move is to take money directly out of your wallet
It’s been said that inflation is a “hidden tax”, as an increase in the circulating money supply causes the value of our currency to drop. Consumers dislike inflation when it causes grocery prices to increase, but this same force also has the ability to increase asset prices such as homes and investments, just as we’re seeing today.
Human beings strive for efficiency, and combined with technology, the result is deflationary. However because the debts of nations are significant, central banks such as the Fed seek inflation — as it causes the future payback value of governmental debts to decrease. As civilization is entering a time of exponentially increasing technological innovation, the tools of the Fed have lost much of their power to trigger inflation.
Typically low interest rates stimulate borrowing and aid in inflation, but this is no longer working as the US interest rate has been low, even zero, for quite some time now. But the Fed has another trick up its sleeve: negative interest rates.
Negative interest rates at the central bank level are not a new idea. In October 2015, the International Monetary Fund (IMF) published a working…
