Leading German Keynesian Economist Calls For Cash Ban

Tyler Durden's picture

It’s official: the world has gone central-planner crazy. 

Monetary policy, whether in the form of “conventional” methods such as the micromanagement of policy rates or so-called “unconventional” measures such as QE, has proven utterly ineffective when it comes to both “smoothing out” the business cycle and reigniting economic growth in the wake of severe downturns. If anything, recent history has shown the exact opposite to be true. That is, the Fed helped to engineer the housing bubble and has now succeeded in inflating a similar bubble in stocks and fixed income. Meanwhile, the Japanese experience with QE has plunged the country into what we have affectionately dubbed “The Kuroda Zone”, wherein the BoJ has cornered both the stock and bond markets while failing to promote wage growth or meaningfully raise inflation expectations. In China, the PBoC has taken to cutting policy rates at the first sign of weakness in the stock market, helping to sustain what will perhaps go down in history as the second coming of the tulip bulb mania, while the ECB has taken the insane step of adopting a trillion euro bond buying program while simultaneously demanding fiscal discipline, meaning the central bank’s bond monetization efforts are set against a backdrop of meager supply.

In sum, the collective actions of the world’s most influential central banks have done wonders when it comes to inflating asset bubbles but have done very little to revive robust economic growth. In fact, far from smoothing out the business cycle and resuscitating DM demand, post-crisis monetary policy has actually had the exact opposite effect: it has set the stage for an even more spectacular collapse while simultaneously creating a worldwide deflationary supply glut.

At this stage, a sane person might be tempted to call it a day on the monetary experiments, especially considering that at this point, the limits have been reached. That is, there are literally no more assets to buy and rates have hit the effective lower bound where rational actors will eschew bank deposits in favor of the mattress. But not so fast, say folks like Citi’s Willem Buiter and economist Ken Rogoff: the world could always ban cash because if you eliminate physical currency and force people to use a debit card linked to a government controlled bank account for all transactions, you can effectively centrally plan everything. Consumers not spending? No problem. Just tax their excess account balance. Economy overheating? Again, no problem. Raise the interest paid on account holdings to encourage people to stop spending. So with Citi, Harvard, and Denmark all onboard, we bring you the latest call for a cashless society, this time from German economist and member of the German Council Of Economic Experts Peter Bofinger.

Via Spiegel (Google translated):

Coins and bills are obsolete and only reduce the influence of central banks. This position represents the economy Peter Bofinger. The federal government should stand up for the abolition of cash, he calls in the mirror…


The economy Peter Bofinger campaigns for the abolition of cash. "With today's technical possibilities coins and notes are in fact an anachronism," Bofinger told SPIEGEL.


If these away, the markets for undeclared work and drugs could be dried out. In addition, it would have the central banks easier to enforce its monetary policy.The teaching in Würzburg economics professor called on the federal government to promote at the international level for the abolition of cash. "That would certainly be a good topic for the agenda of the G-7 summit in Elmau," he said. (Click here to read the full interview in the new mirror .)


Even the former US Treasury Secretary Larry Summers and economist pleaded for an end to the already cash . Likewise, the US economist Kenneth Rogoff . He also argued that the interest rates of central banks have less clout when banks or consumer credit rather than hoard cash.


Critics warn, however , such debates would only distract from the real problems of the current monetary policy.

Yes, the “real problems” with current monetary policy. Like the fact that by design it can't possibly work (but it can and will push stocks to unprecedented highs). Paging Mr. Weidmann, your countrymen are going Keynesian crazy.

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Counterpunch's picture
Counterpunch (not verified) May 16, 2015 1:18 PM

sure electronic money, electronic voting...actual slavery.

Waylon Bits's picture
Waylon Bits (not verified) Counterpunch May 16, 2015 1:21 PM

And the public should in turn respond, "central bankers, economists and corporate fascists are obsolete!"

cheech_wizard's picture

Shhh. Be vewy vewy quiet, I'm hunting banksters...

Waylon Bits's picture
Waylon Bits (not verified) cheech_wizard May 16, 2015 1:27 PM

This should be seen for the act of desperation it really is (looking at the percentage of physical cash in circulation to global supply).  These guys are the masters of unintended consequences and this will be their greatest hit yet!

Ignatius's picture

The desperation displayed is right up there with Cameron's  "Conspiracy theorists are more dangerous than ISIS."

Counterpunch's picture
Counterpunch (not verified) Ignatius May 16, 2015 1:34 PM

he is literally a Rothschild agent.

0b1knob's picture

< When cash is illegal, only CRIMINALS will have cash.

< They can have my cash when the pry it out of my COLD DEAD HANDS.

dogbreath's picture

I see one small problem.  Before this can occur they will have to legalize weed heroin cocaine and whatever else to allow drug dealers to transact electronicly.  Maybe thats what bitcoin is for??

HowdyDoody's picture

An honest statement? "Cash undermines the influence of central banks" and that is bad?

PT's picture

... and that is why you chickens MUST allow us foxes to guard the hen house! ... for the small sum of only three eggs per day ...

Lookit all these holes in the chicken coop!!!  You MUST allow us to get more foxes to guard all these holes in the chicken coop!  And now half the chickens have gone missing!!!  Due to the lack of chickens, those of you remaining will HAVE TO pay us SIX eggs per day so that we may continue to guard the hen house!!!


Pairadimes's picture

When all money is controlled by the central banks, then monetary policy is - you guessed it - whatever they say it is.

Billy the Poet's picture

Wasn't Bofinger a Bond flick?

Perseus son of Zeus's picture

Banning cash worldwide? CH1 must be in an orgasmic day long spasm.

Anyway, how the fuck you going do that? And when the people say FUCK YOU!, what you going to do? Call the FBI douches in to investigate?

There will be a tangible valuable trinket used for trade. I don't give a shit what you .gov crackheads think.

Save_America1st's picture

Hmmmmm....I've noticed that all these banksters and "economists" popping up lately calling for the ban on cash and coins aren't experiencing the typical bankster nail-gun treatment or other such "suicide" methods.


Ya think they all finally got the message????


Pool Shark's picture



"...And he causes all, the small and the great, and the rich and the poor, and the free men and the slaves, to be given a [chip] on their right hand or on their forehead, and he provides that no one will be able to buy or to sell, except the one who has the [chip], either the name of the [bank] or the number of his [account]."

willwork4food's picture

Funny how so many of John's prophesies have come to fruition.

MonetaryApostate's picture

Digital Banking / No Cash will lead to digital financial terrorism, if you can't see it coming, you're clearly ignorant of history...

They will exact exuberent fees for EVERY TRANSACTION....  

(They will have their hand in EVERY Cookie Jar)

Owe taxes or have a judgment against you?  (What bank account?)

A real shit storm is brewing folks, you better wake up fast...


old naughty's picture

"...all these banksters and "economists" popping up lately calling for the ban on cash and coins aren't experiencing the typical bankster nail-gun treatment or other such "suicide" methods.

Ya think they all finally got the message????"

Guess they finally got it,

with anti-aircraft guns; train wreck; and tsunami+EQ...

Will aliens come next?

DutchR's picture

No plastic for my Tampons


Yeah baby


 A nice footmassage wil do ;)

G.O.O.D's picture

Funny how so many of John's prophesies have come to fruition.


If it is so fvkin funny, why the fvk am I not laffin?

shovelhead's picture

Billy the Bum in my neighborhood has had a pretty good record too.

He's hard to understand though because he has no teeth and he screams.

DutchR's picture

Eh you're dyslexic.....

ThirteenthFloor's picture

Next thing they'll take the mattress too. And the moron millions do not see the danger in this.

random999's picture

I see one small problem.  Before this can occur they will have to legalize weed heroin cocaine and whatever else to allow drug dealers to transact electronicly.  Maybe thats what bitcoin is for??

Thats how they will illegalize my gold.

dogbreath's picture

you have gold?  fool  

0b1knob's picture

I once had some gold.   I lost it all in an unfortunate boating accident.

CH1's picture

The problem with stackers is that they never USE their stacks. Ever.

quasimodo's picture

I call bullshit. I remember at least a half dozen times I read a post of someone who had the need arise to cash in some metals for this or that. And not using your stack is a bad thing?

Pool Shark's picture



The Precious?

"It should have been brought back to the Citadel to be kept safe. Hidden. Dark and deep in the vaults, not to be used. Unless at the uttermost end of need."

MonetaryApostate's picture

The problem with preppers is, they are preparing for something they can by no means avoid...

Stackers are simply squirrling away for a rainy day & I'm pretty sure we have a major shitstorm brewing..

The only thing is, you may have to contend with gov. confiscation or metals falling out in value....

Solutions aren't going to be found playing the chicken, get innovating, and starting thinking folks, fast!

Citxmech's picture

"The problem with preppers is, they are preparing for something they can by no means avoid..."

And your point is?  That's exactly why preppers prep.  

Ever read any Aesop?:  

Neither the ant nor the grasshopper can avoid the comming Winter - so the ant preps, storing food, while the grasshopper fiddles.  Who does better when Winter comes again?

stacking12321's picture

how is that a problem?

and, more importantly, for WHOM is it a problem?

if you have a neighbor who has a fire insurance policy on his house, would you say it's a problem that he never uses his fire insurance?

i expect to sell / barter what i have stacked, when the time is right; might be 5 or 10 years, i'm not in a hurry.

Kirk2NCC1701's picture

"The problem with stackers..."

Sounds very similar to Load & Rackers.

Tarzan's picture

Exactly what a banker says about our retirement savings, as if SAVING for a rainy day is a bad thing.

"Economist calls for cash ban"
Because proabition worked so well....

It is THE one unmistakable sign the end is at hand, Bring it Bitchez!!!

shovelhead's picture


He still doesn't get it.

DutchR's picture

After this house burns




MontgomeryScott's picture

I had one of these, one time.


Sharks with lazer beams attached to their frickin' heads decided to attack my boat, but fortunately I had stocked up at Home Depot with a good supply of nails-on-a-rail for the ol' Pascoe.

Those cocksucking CIA motherfuckers have an unfortunate tendency to learn from their mistakes.

NOW, 'unfortunate plane crashes' are more apropo to them.

GoldSilverBitcoinBug's picture

I predict more boating accident in the future.

cnmcdee's picture

The reality is all world currencies will soon be financial prisons of wealth.  If people are going to succeed then their systems must be bypassed and made irrelevent in a method that noone can ever stop independent of the internet.  Once we have figured that out it is time to demonetize everything. 

Citxmech's picture

"Coins and bills are obsolete and only reduce the influence of central banks."

And this is a bad thing?  HFS - the lunitics are running the asylum.

JustUsChickensHere's picture

I predict many computer disasters too .... all the crypto holdings are vulnerable to that and no one ever has a backup  /s

One World Mafia's picture

They'll make more in taxes by going digital, and they can track political dissidents and steal from accounts via backdoors.  Besides street drugs are being replaced by prescriptions.

Supernova Born's picture

What number on the trolling chart are off topic discussions of religion?

DutchR's picture

Paging Mr Carrington, paging Mr Carrington


Eh, bribes do usually come in cash, no

Trucker Glock's picture

Bribes will be paid in blow and hookers which will be bought with threat of violence.  They'll get around the no-cash thing.  The true elite don't need hookers.  They have sex slaves who's missing person report went missing.

MontgomeryScott's picture


BILLIONS AND BILLIONS OF YEARS (FIAT CURRENCY NUMBERS, WHATEVER) AGO, the Universe came into being (spontaneously). Mankind's Science has proven that evolution is the only plausible counter to 'religion'. REASON is BEYOND 'Intelligent Creation'. The laws of physics and mechanics CAN be broken (for a reference, see the official story of the events of 9/11/2001). All things are interrelated, but no things can be defined. Words and ideas and concepts do NOT have any meanings. The fact that PMSNBC only holds a literal 25,000 'demographic' isn't important.

When i arise in the morning, I brush my teeth, religiously.

TEACH the MASSES, I pray, regarding your definition of 'RELIGION'.

It's YOUR turn now, to show the 'confidence game'.

Quus Ant's picture

Great comment, Mntgmrysctt.

Fire and Brimeystone.

Waylon Bits's picture
Waylon Bits (not verified) Counterpunch May 16, 2015 2:03 PM

This is some of the greatest news a metals or cryptocurrency investor could hope to hear.  Kits to determine 10K, 14K, etc purity are cheap and easy.  Valcambi bars, scales, installing a Bitcoin application on a smart phone... maybe takes the underworld a few months to catch up?  Just get ready to go from undesirable investor to outright criminal, anti-government terrorist very soon...