Cash-Banning Harvard Professor Slams "Ignorant" Negative-Rate-Naysayers

Tyler Durden's picture

Not satisified with demands for banning cash in America, Harvard economics professor Ken Rogoff has lashed out at critics of negative interest rates, calling them "ignorant" in their analysis of the unprecedented measures.

As a reminder of Rogoff's recent proclamations, according to the esteemed ivory tower academic, paper currency lies at the heart of some of today’s most intractable public-finance and monetary problems. As Rogoff explains in The Wall Street Journal, getting rid of most of it - that is, moving to a society where cash is used less frequently and mainly for small transactions - could be a big help.

Rogoff's begins by stating factoids as facts...

There is little debate among law-enforcement agencies that paper currency, especially large notes such as the U.S. $100 bill, facilitates crime: racketeering, extortion, money laundering, drug and human trafficking, the corruption of public officials, not to mention terrorism. There are substitutes for cash—cryptocurrencies, uncut diamonds, gold coins, prepaid cards—but for many kinds of criminal transactions, cash is still king. It delivers absolute anonymity, portability, liquidity and near-universal acceptance. It is no accident that whenever there is a big-time drug bust, the authorities typically find wads of cash.

 

Cash is also deeply implicated in tax evasion, which costs the federal government some $500 billion a year in revenue. According to the Internal Revenue Service, a lot of the action is concentrated in small cash-intensive businesses, where it is difficult to verify sales and the self-reporting of income. By contrast, businesses that take payments mostly by check, bank card or electronic transfer know that it is much easier for tax authorities to catch them dissembling. Though the data are much thinner for state and local governments, they too surely lose big-time from tax evasion, perhaps as much as $200 billion a year.

 

Cash also lies at the core of the illegal immigration problem in the U.S. If American employers couldn’t so easily pay illegal workers off the books in cash, the lure of jobs would abate, and the flow of illegal immigrants would shrink drastically. Needless to say, phasing out most cash would be a far more humane and sensible way of discouraging illegal immigration than constructing a giant wall.

So to clarify - Cash (and Donald Trump) are at the center of all of America's and the world's ills and therefore - as a PhD who knows best - we must destroy it (for your own good).

And now, as Bloomberg reports, anyone who questions this, or the imposition of negative interest rates (or a tax on cash) by central banks is "ignorant."

It’s impossible to analyze the effects of the “early experiment” with negative rates because central banks were left to themselves amid a global fiscal retrenchment, Rogoff, a professor at Harvard University, said Wednesday in an interview after speaking at the Skagen Funds annual conference in Oslo.

 

“I find a lot of what is written by representatives of the financial sector, they’re very hostile to negative rates, to be kind of ignorant,” he said ahead of a tour of Scandinavia, where sub-zero rates first saw the light of day. “They’re talking about their short-term profits, and their short-term interest, but it’s a long-run policy if you do the homework, if you lay the groundwork, it would certainly work very well.”

Those questioning the efficacy of the policy got more rhetorical ammunition this week when a report showed inflation in Denmark, where rates have been negative for almost half a decade, was the lowest in 63 years in 2016.

 

According to Rogoff, it’s impossible to draw any conclusions because the efforts to restore growth and inflation have been one-sided.

But done “correctly” it can restore “complete control over inflation expectations,” he said.

Of course, if you do not agree with this 'elite' Davos-Man, then you probably don't deserve to vote either.

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GGuy's picture
GGuy (not verified) Jan 12, 2017 4:09 PM

jew?

GGuy's picture
GGuy (not verified) GGuy Jan 12, 2017 4:11 PM

JES!!!

 

 

Now how did I know?

GGuy's picture
GGuy (not verified) GGuy Jan 12, 2017 4:13 PM

btw, Negative rates are the JOO WORLD ORDER'S way to destroy all pension funds.

Ignatius's picture

Classic blaming of the hammer:  one can either use it to build a house or knock in a head. 

Rogoff only sees it as a weapon, and dares call the rest of us "ignorant."

The "crisis" is and always has been the wayward aspects of human nature.

What a total banker tool and asshat.

AllTimeWhys's picture

All i read is "This benefits me and that's all that matters" these elitist fucks can go choke on a million dicks

Amaroosta's picture

((((((Harvard))) (((Professor))))))

MagicHandPuppet's picture

This douche has not yet met hostile.  Someday, I expect he will.

wee-weed up's picture

Arrogant holier than thou Ivory Tower prick.

froze25's picture

I am starting to think that Ivy League graduates are enemies of the people to a degree.

Killdo's picture

I was thinking the same recently about these so called Democrats - they are the reason this country is so fucked up. Instead of being a proper oposition and keeping psychopatic lying puppet presidents in check, they are likea bunch of zombies, easy to bribe and use as a violent stupid army of idiots to sabotage democracy and enforce fraud. 

in my expereince ugly feminists and gays (especially the fake ones with gender identity disorders) are the most rabid, power-thirsty and Hitlery-loving

Stuck on Zero's picture

There are few times since the creation of the Fed that the US has not had a negative interest rate. Just subtract the rate of return from the real inflation rate and what do you get?

GreatUncle's picture

Yep but the problem is really the size of the debt to the size of the real economy. (the magnitude of what you say)

Real economy is not big enough to support the debt.

It is very simple, an economy expanded big enough can support a larger level of debt.

Can't say that, the globalists won't allow it, rather choose WW3 to make it add up.

BennyBoy's picture

 

ROGOFF'S THEORY:
No Cash = No Crime

Another Harvard asshole.

BennyBoy's picture

 

After you Rogoff: How about we ban cash for Harvard Professors? And put a negative rate on their cash holdings, say 100%?

Kayman's picture

How about a special tax on bankers and economists.  A negative value policy tax of some kind. They contribute nothing to the economy, marginalize hard-working citizens, and then call them ingnorant when they'd like a market interest return on their savings.

Rogoff provides nothing but pseudo-intellectual cover for the disgusting banker theft. And yeah, I've read his books.

Withdrawn Sanction's picture

So when people dont behave as the high priests (rabbiis?) of Harvard prefer, the priest become petulant and insulting.

BTW, Dr Rogoff, we've had negative real rates for some time esp at the short end of the yield curve and we've had no improvement.  Do you really think doubling down on a failed policy will improve your results?

REAL rates drive investment and savings behavior and it ought to be obvious to even over-educated know-it-alls like Dr. Rogoff that their policy prescription has failed.  It has failed not because people (INCLUDING bankers) are fleeing into cash (they are), but because the negative rates encourage such behavior.  Their actions, in short, are an effect of failed policy not its cause. 

But it's even more insidious than that.  Negative interest rates turn traditional discounting calculus on its head in so doing, corrupt the decisions of investors and entrepreneurs.  Their only rational defense when facing such perversions of monetary policy is to withhold investment.  WE WILL NEVER IMPROVE ECONOMICALLY UNTIL THIS DISASTROUS POLICY OF NEGATIVE REAL RATES IS REVERSED.  

Meat Hammer's picture

I'm cool with banning cash by ending the Fed. I wonder what Harvard boy thinks of that idea?

NurseRatched's picture

How about we cap the Harvard endowment at $5 billion and use the rest to repair bridges and roads and stuff?

BeanusCountus's picture

Right with you. Hey Rogoff, I have a theory too. My theory is you are an asshole that thinks too much and that anyone who disagrees is ignorant.

GreatUncle's picture

200%, for every year they work they are 2 fucking years in debt sounds better.

MEFOBILLS's picture

ROGOFF'S THEORY:
No Cash = No Crime

Another Harvard asshole

 

Here is a fact for our esteemed economists who know nothing, or are disengenuous...playing us for dupes.

  Debt Free money can jump from transaction to transaction will little friction.  This money type does not take for its existence.  It does not come into being at interest, and hence is low cost.  Further, this type of money can go on to become savings.  Since it is not under drain pressure, then the PEOPLE can pool their savings to start business.  OOOPS - that means bypassing (((credit emitting))) banks.

The transaction component of the economy actually needs this money type, not bank credit.  Bank credit should only channel toward productivity means.

And now we get to the real problem.  Our friends want to continue to own the money power.  IT IS NOT YOURS tribesters.  It belongs to the public - the people.   You have usurped where you don't belong... and hence are a parasite.

So, what if there is some crime, there will always be crime.  A free people need their own money, not your bank credit.

THOUSANDS OF YEARS  of coin history have taught us, at least those of us that bother to learn it, how floating money is of a great benefit to civilization.

Making the entire money supply bank credit, created upon hypothecation and at interest, is a disaster.  This type of money is high friction and demands from the future - it takes a tithe for its existence, and this tithe is transferred pyramid style to the 1%.

It is not negative interest rates on bank credit that is the issue.  It is the fact that you have harnessed the world with a disappearing money type, introduced at interest, and have made debt slaves of the population.

Exogenous money issued debt free by the Treasury will pay off debts.  I will say it again.  Exogenous treasury money (meaning issued outside of banking system) will pay off debts.  It really is that simple. 

Enough of your jew con games. It is sickening

Quote from Henry Ford, who was also onto your con :

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

 

 

Meat Hammer's picture

Excellent post, MEFO. Thank you.

BeanusCountus's picture

I agree, to a point. Just me, but I was taught that the formation of investable capital (necessary for a sustainable growth economy) begins with an equilibrium of savings and interest rates that reflect the true rate of inflation plus a risk premium. Seems all the variables difficult to put a number on these days due to manipulation of things like Rogoff proposes. Interest is not intrinsically "bad" if the rate reflects what an investor needs to take the specific risk. Unfortunate, but these economists screw up every variable by not letting bad risks go broke. They pick and choose, distorting the process where capital should flow. Boneheads like Rogoff disavow this process as productive, choosing instead to artificially impose "what they think" should be done to stimulate the economy as a whole. They want people to SPEND money to support the institutions that exist. That's the opposite of encouraging people to SAVE money and become investors to better themselves. Dont spend money and PAY Interest, save money and EARN interest. Impossible when this Rogoff guy wants to charge you for saving money.

slightlyskeptical's picture

"Exogenous money issued debt free by the Treasury will pay off debts"

This is the answer for sure. The problem is keeping it in check to prevent run away inflation while also funding an economy that will shrink tremendously as all the leverage gets taken out. And how do you eliminate greed, which ends up ruining every system? I don't think you can, but you can bring it all back home with a draconian estate tax. No limits and no taxes while you are alive but you pay much of it back when you die. 

slightlyskeptical's picture

"Exogenous money issued debt free by the Treasury will pay off debts"

This is the answer for sure. The problem is keeping it in check to prevent run away inflation while also funding an economy that will shrink tremendously as all the leverage gets taken out. And how do you eliminate greed, which ends up ruining every system? I don't think you can, but you can bring it all back home with a draconian estate tax. No limits and no taxes while you are alive but you pay much of it back when you die. 

MEFOBILLS's picture

The problem is keeping it in check to prevent run away inflation while also funding an economy that will shrink tremendously as all the leverage gets taken out. 

 

There are ways to prevent inflation.  A three party MEFOBILL, similar to what Schacht did in Nazi germany, can pay off or reduce mortgage debts.  In effect, the principle is reduced, and no new money enters the money supply.  This then unburdens the future. In this case, the debt free money extinguishes when it enters the ledger.  People can then save and invest in future.  The mortgage debts were run up with fraud, so they need to be unwound.

Greed problem is exacerbated in a banker credit money system, as there are counterparties on all debts.  Joe owes Maria, who owes Frank who owes the bank.  Once the bank loans stop getting paid, then the system goes into collapse.  The bank stops making loans.  Existing credit as money is always called to the ledger for destruction, so a credit economy is a sawtooth, with rapid collapse into depression/recession.

In a floating money "sovereign system", then any failures in the chain of payments, does not cause a dominoe.  People have positive money in their possession, so any single failure is usually isolated to one party.

You don't need leverage to fund an economy.  Canada had a sovereign money system from 38 to 74, and did very well with low debt levels.

Eliminating greed is done using rent taxes, which are codified in Classical Economics.  So, fiscal policy is important.

Also, a debt/credit contract can be examined - like they did in Venice, such that the relation between creditor and debtor is non usurious.  Debt/Credit contract should be examined at the moment it is brought into existence.  (A debt credit contract ina a sovereign system uses existing money, not new bank credit.  You borrow from others, or are yourself a creditor.)

There are ways out of the current dilema facing humanity.  The problems are not insurmountable.

Our "friends" telling their lies are not helpful.

www.sovereignmoney.eu

Jacksons Ghost's picture

Close;  No Cash=No economic Freedom.   That is their angle.

East Indian's picture

no life = no crime either.

 

nuke the world. 

/s

Miffed Microbiologist's picture

Notice his complaints against cash are based on his perception of illegal activity. This is a false premise because if cash were eliminated, it hardly follows illegal activities would cease. Therefore, the argument is specious and smacks at an attempt for social engineering vs a reduction in crime.

Banksters are all criminals. I find it amusing they are pretending they are concerned about other criminals unless they hope to eliminate competition.

Miffed

Kayman's picture

Eliminating cash means the Bankers and Government have the monopoly on Theft. It is all about eliminating the competition.

americhinaman's picture

I got a PhD at a non-Ivy League school across the river from Harvard... much stronger school :)

But regardless of talking my book, I would just note that not all academics think or act as elitist as this guy.  Only the ones who love blabbing to the media are like this.  95% of academics are reasonable and open to debate, as we should be.

AllTimeWhys's picture

This guy is further proof that a high-end degree doesn't = intelligent. 

 

Fuck i don't even know if the word 'intelligent' has a solid definition anymore, not with fuckwads like this holding their noses up with their degrees dangling from it and claiming we should all listen because they are 'smart'

Creative_Destruct's picture

 "high-end degree doesn't = intelligent."

Clearly one of Taleb's IYI crowd.

Killdo's picture

I studied at the Imperial college (2 years ago was the 2nd besst in the world) - and didn't really learn many useful things at all. I spoke to many of my friends from IC and othe rpalces like London School of Economics, Harvard etc - and we all agreed it was pretty much a waste of time. Although it was cheap - all I paid was about 500$ and I got grants too

New_Meat's picture

IYI -- Intelligent Yet Idiotic

Got The Wrong No's picture

I've become very proud of my deplorable ignorance as of late. 

inhibi's picture

"There is little debate among law-enforcement agencies that paper currency, especially large notes such as the U.S. $100 bill, facilitates crime"

 

Let me get this straight: the 2007/8 bubble, caused by BANKS/FED, which destroyed families, homes, and the wealth of massive portion of America's middle class, is somehow way less dangerous than some a**hat selling $300 worth of cocaine on a sidewalk in Compton? This idiot cant be serious. The entirety of protests across the world in the last 5 years had nothing to do with cash, and everything to do with POLITICAL/CORPORATE CORRUPTION, caused by hyperconsolidation, lobbyism, and overseas LLCs. Where the FUCK is cash in all this? NOWHERE.

 

TruthBeforeAll's picture

And who would it be throwing around these 100's to hookers, drug dealers, and politicians? Oh yeah, the same people telling those of us who resist their "Permission" based currency that we are the problem.

So It Goes's picture

One of the few things I retained from my college education:

"The definition of an intellectual is one who has lost control of his brain".

NAV's picture

Richard Hofstadter in his book Anti-Intellectualism in American Life recalls that "the American mind was shaped in the mold of early modern Protestantism." In those earlier days, stress was on a general belief in the importance of eduation, and no stress at all on the need for an intellectual elite. But since that time there has been a great change in America caused by development of an "intellectual class" that is in rebellion against the American way of life.

As Hofstadter puts it:

"Perhaps the most decisive testimony of the changed situation of twentieth-century intellectuals is that after 1890 it became possible for the first time to speak of intellectuals as a class."

Says Hofstadter:

"After about 1890...American writers and othr intellectuals became a more cohesive class than they had been, became restless with the constraints of gentility and conservatism, and took up arms against American society."

Most adhered to the intellectual radicalism of Marx, Darwin and Freud. Dominating administrations from Woodrow Wilson to Obama, historian David L. Hoggan summarizes the result: "Darwin destroyed the faith of American intellectuals in Christianity. Marx destroyed the faith of American intellectuals in America's institutions. Freud demoslished the personal ethics based on the Christian tradition in favor of his own personal system of values."

Now intellectual Ken Rogoff advocates destruction of Americans' financial freedom by banning cash, "designing and proposing methods by which the state can control people more aggressively and efficiently... further extending central bank money control" over the people.

38BWD22's picture

 

 

Perhaps Mr. Rogoff would put his personal monetary information where his mouth & pen are...

POST how much money you have and where you have it!

That is more-or-less what future hackers would do...

 

Creative_Destruct's picture

"it’s a long-run policy if you do the homework, if you lay the groundwork, it would certainly work very well.”

So this arrogant Ass-Hat KNOWS with certainty what the long run effects of doing this would be in a complex economic system no one can predict.

Way to expose your own IGNORANCE, jack-ass.

Vatican_cameo's picture

 

"Those who can, do and those who can't, Teach. (and those who can't teach, teach Gym).

If this clown is so smart, why isn't he "Making a Fortune" in the Private Sector?

asteroids's picture

Long Term Capital Management. Smarty pants professors tried gaming the system and almost crashed it. That's why professors no longer run big money.

Got The Wrong No's picture

Snowflakes melt in the private sector. 

shovelhead's picture

Why, I'm certain that he pays for the privilege of banking his stash in a negative interest rate acct.

Isn't that what any smart Harvard Professor guy would do?

Losing money proves you're not dealing drugs...or something, I guess.

Oh, and another plus is the govt. can just help themselves to their taxes without all that silly filing.

Winning.

Pinto Currency's picture

Something from nothing is what got us into this place.
Time for some reality.