The Secret Fed Paper Calling For a “Carry Tax” On Cash
By Graham Summers
GoldSeek.com
Sunday, 17 May 2015
Many commentators have noted that mainstream economists are calling to do away with cash entirely.
It would be easy to scoff at these proposals as completely insane if the Fed hadn’t published a paper back in 1999 suggesting the implementation of a “carry tax” or taxing actual physical cash using an expiration date if depositors aren’t willing to spend the money.
The author of this lunacy is a visiting scholar with the ECB, the Fed, the IMF, and the Swiss National Bank. The fact that two of those groups have already imposed negative interest rates (ECB and SNB) should give warning that these sorts of ideas are actually taken very seriously by Central Banks.
The paper, written 16 years ago, suggested that if the Fed were to find that zero interest rates didn’t induce economic growth, it could try one of three things:
1) A carry tax (meaning tax the value of actual physical cash that is taken out of the system)
2) Buy assets (QE)
3) Money transfers (literally HAND OUT money through various vehicles)
Regarding #1, the idea here is that since it costs relatively little to store physical cash (the cost of buying a safe), the Fed should be permitted to “tax” physical cash to force cash holders to spend it (put it back into the banking system) or invest it.
The Rest…HERE
