Sweden closer to being the first cashless society with negative interest rates | Hacker News Reader

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

businessinsider.com

10 pointsogezi22 comments

> 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.

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.

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.

> 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.

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/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.

At least 60 % of the "facts" in that article are made up.

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?

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.

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.

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.

Cash can "degrade", it's called inflation.

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.

QE causes asset bubbles. Negative interest rates promote (in theory) consumption over saving.

Economically, these are uncharted waters.

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.

> Cash doesn't degrade in value

Not YET. There are ideas floating around to let cash become less valuable. An ATM will print a datestamp and it will help degrade 'older' money… (Could not find the source, but it's not that complicated).

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

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

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

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

Bitcoin.

Is honestly more of a hassle for the average consumer then existing solutions.

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.

Reply on news.ycombinator.com