At the most recent meeting of the Federal Open Market Committee (FOMC), which decides US interest rates, one unnamed member said that they expected negative policy rates at the end of this year and next.
But can policymakers keep at this forever? Even if turns out that the lower bound was not negative, economists still believe that one exists.
Attempts to estimate the unknown vary, but the fees charged by credit companies give some indication as to how strongly we prefer to use cash. These can be as low as minus 3pc according to Barclays, indicating that central bankers have much more room to slash rates.
Pension funds might be among the first to abandon banks if things get too painful, because of what in effect can look like a tax on holding money.
One solution is to give savers nowhere else to go. This idea was floated by the Bank of England’s chief economist in recent weeks, who made the case that sub-zero rates will be needed in the near future.
Andy Haldane, a member of the Monetary Policy Committee (MPC), the UK’s equivalent of the FOMC suggested that to achieve properly negative rates, the abolition of cash itself might be necessary.
This is one reason why negative rates have been used in Nordic economies, where societies are already close to cashless. Even sellers of Sweden’s version of the Big Issue magazine - Situation Stockholm - are able to accept payment via debit or credit card.
For the immediate future, the British obsession with cash appears to be intensifying. The Bank of England has said that demand for banknotes and coins outstrips total spending in the economy.
Some of like to hoard it for peace of mind, while many of us hold it for day to day transactions. And much of it is held abroad, often in bureaux de change.I've never taken the eschatological view of history seriously, but this should just fuel the paranoia about Mark of the Beast. Of course, in the absence of cash, people will buy and sell with precious metals: gold, silver, and lead.