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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 paper titled “Breaking Through the Zero Lower Bound” which starts out quite boldly:
“There has been much discussion about eliminating the “zero lower bound” by eliminating paper currency.”
The zero lower bound, of course, is referring to central banks’ ability to take interest rates below zero. Appendix I (pg. 38) of this paper is titled “Potential steps in the transition from paper currency standard to digital currency”.
Negative rates are already in use in some countries today. The Bank of Japan (BoJ) instituted negative interest rates in January 2016, and since then Germany and several other European countries have followed suit. Recently, the Bank of England (BoE) instructed banks in the UK to prepare for implementation of negative rates from an accounting perspective.
The Federal Reserve (the Fed) actually has a fairly limited toolset with which to influence the US economy today…