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To: The British Government
Guarantee British savers and investors that cash will not be abolished
The Bank of England’s Chief Economist Andrew Haldane on 18th September 2015 raised the possibility that the Bank could abolish use of cash in Britain in order to allow the bank to impose negative interest rates on savers.
Therefore, we the undersigned, as concerned savers and investors of Great Britain, do call on Her Majesty’s British Government to:
Guarantee that cash will not be abolished from use in the UK.
Guarantee that negative interest rates will not be imposed undemocratically on British savers.
Establish a form of public consultation on the specific mandate and monetary policy limitations of the Bank of England.
Why is this important?
Negative official interest rates make it more likely that retail banks will pass on the negative rate to you. When they do, you’ll no longer earn interest on your savings. You’ll pay interest. And because you can’t take your cash out in the form of banknotes, you have a simple choice: spend your digital cash, or watch it whittle away bit by bit.
Do you see how negative interest rates and a cashless society could be seen as the ultimate tool of economic coercion? Changing the general rate of interest changes incentives. But for central bankers, merely changing incentives isn’t working. If you’re a central planner, you have to force action.
If you still possess your cash, you don’t have to do what other people want you to do with your money. With cash, you still have choices. You can plan for a rainy day and choose to take possession of some of your savings. If it’s still in your hands, the choice is yours.
But if there’s nothing to possess, no cash to put under the mattress or in the freezer, how much control do you have left? Not much, I’d say. And that’s precisely the idea.