More Cash As Well As Nil Bound

In my last post I started thinking well-nigh how options other than currency enforce a nada bound. Imagine in that location is no to a greater extent than currency, as well as the Fed tries to impose -5% involvement rates. You set inwards a dollar, yous piece of employment out 95 cents. What other ways are in that location to guarantee that if yous set inwards a dollar yous larn dorsum a dollar? (In my final post, I too pointed out that inwards each example rules or laws could live changed, just that the magintude of the required changes was pretty big.)

 From Kenneth Garbade as well as Jamie McAndrews inwards a overnice Liberty Street Economics weblog post

• Certified check. Go to the bank, order the depository fiscal establishment to write yous a $10,000 certified check. Put it inwards your sock drawer. (More: "Certified checks, which are liabilities of the certifying banks rather than private depositors, powerfulness boot the bucket a pop way of payment, equally good equally an attractive shop of value, because they tin live made payable to lodge as well as tin live endorsed to subsequent payees.")

Or, inspired past times that: 

• Don't cash checks. Every xc days, telephone telephone up, tell yous lost the check, inquire them to reissue it. 

Clumsy. But equally Ken as well as Jamie betoken out, it's real slowly for a society to larn started that does this, as well as offering fixed-value accounts to clients, beating the -5% at banks. Or, fifty-fifty inwards today's super-regulated environment, possibly banks could figure out to create this. After all, the Medici figured out inwards the 1400s to write offsetting bills of central to synthesize interest.

So, the projection volition hateful changing the rules as well as laws governing checks, going dorsum hundreds of years.

An before post past times Todd Keister:

• Money marketplace usual funds.

Currently coin marketplace funds hope fixed value, as well as pay positive interest.  They are non laid upward to accuse negative interest, or to permit uppercase losses. Maybe they should -- I've argued for floating NAV -- just they don't. The Fed kept the 0.25% charge per unit of measurement on reserves just as well as then banks as well as coin marketplace funds didn't accept to reinvent themselves inwards ways that permit uppercase losses or negative rates. 

Miles Kimball has too been writing inwards favor of negative nominal rates as well as thinking well-nigh the nada bound. One post is here.