More Cash As Well As Zilch Bound

In my last post I started thinking nearly how options other than currency enforce a nada bound. Imagine at that topographic point is no to a greater extent than currency, as well as the Fed tries to impose -5% involvement rates. You position inwards a dollar, you lot run out 95 cents. What other ways are at that topographic point to guarantee that if you lot position inwards a dollar you lot larn dorsum a dollar? (In my terminal post, I likewise pointed out that inwards each illustration rules or laws could live changed, simply that the magintude of the required changes was pretty big.)

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

• Certified check. Go to the bank, order the banking concern to write you lot 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, mightiness drib dead a pop agency of payment, equally good equally an attractive shop of value, because they tin live made payable to gild as well as tin live endorsed to subsequent payees.")

Or, inspired past times that: 

• Don't cash checks. Every ninety days, telephone phone up, nation you lot lost the check, inquire them to reissue it. 

Clumsy. But equally Ken as well as Jamie signal out, it's really slow for a fellowship 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 produce 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 position usual funds.

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

Miles Kimball has likewise been writing inwards favor of negative nominal rates as well as thinking nearly the nada bound. One post service is here.