
The desert dollar industry (2021) - ivank
http://jpkoning.blogspot.com/2015/12/the-desert-dollar-industry.html
======
cperciva
Can we get a (2021) tag on this? I mean, sure, it was written a couple weeks
ago, but it's written from the viewpoint of a hypothetical future, and it's
confusing if you miss the date at the top.

~~~
rm445
If someone doesn't recognise it as fiction in the third paragraph - a decade
of deflation and hyper-deflation? - they're unlikely to be able to take much
away from the article anyway.

(And that's before the end of the paragraph, which talks about negative
interest rates since 2019).

~~~
alistairSH
On first reading that statement, I just assumed the author was some sort of
right-wing lunatic.

------
scotch_drinker
While it sounds like fantasy, there is a strong movement at many levels to get
rid of cash entirely in the name of safety and security. I'm not sure about
burying cash in the desert versus harder assets but when they start charging
the consumer to keep cash in an account, people will find other stores of
value.

[http://willembuiter.com/ELB.pdf](http://willembuiter.com/ELB.pdf)

~~~
pzxc
Try selling something on Craigslist without requiring cash-up-front as payment
and tell me how safe and secure it is. Fake money orders and cashier's checks
are a lot easier to manufacture than fake cash.

~~~
scotch_drinker
In a future world of no cash, Craigslist will probably be black market
underground bartering more than it will be about the sale of items. Probably
isn't high on the priority list of people like William Buiter who would like
to see cash outlawed. Hard to collect tax on people selling on Craigslist.

------
phkahler
One problem is that they're trying to use a single parameter (interest rates)
to control many things. First it was inflation, then they added economic
growth, employment, and now there is competition/interaction with other
economies. You can't control all those things independently by pulling one
lever. There used to be other levers, but tariffs (which were another know)
have been disallowed in the name of free trade (that's actually fixing the
lever in a certain position). War is off the table with first world countries
(we've gotten too good at it). So what levers are left?

~~~
lkrubner
Are you living in the USA? Most people would think that fiscal policy is on
the list. I do understand the perspective in the USA: paralysis in Congress
means that fiscal policy is off the table. And in countries like Greece,
fiscal policy is now limited by the deals that Greece can work out with its
creditors. But in most countries, fiscal policy is the biggest lever. Look at
Japan. Look at China. They engaged in huge investment schemes. Or, on the
opposite side, look at France, or Sweden, or Spain.

~~~
Spooky23
US fiscal policy, depending on how you define that, is mostly executed by the
Federal Reserve, which is a quasi governmental entity not directly managed by
congress.

~~~
lkrubner
You are thinking of monetary policy. Fiscal policy is when Congress passes a
spending bill and the President signs it into law.

------
yellowstuff
European central banks are looking into moving to electronic cash that can be
programmed to gradually lose value. This could solve the problem of cash
hoarding at negative interest rates.

~~~
grp
A similar system is already available at the Wir bank [1].

For a short analysis, see [2].

[0] [http://wir.ch/](http://wir.ch/) (Their website is _not_ available in
english)

[1]
[https://en.wikipedia.org/wiki/WIR_Bank](https://en.wikipedia.org/wiki/WIR_Bank)

[2] [https://www.quora.com/How-does-the-WIR-Bank-
work](https://www.quora.com/How-does-the-WIR-Bank-work)

------
lkrubner
If the Treasury were to fill old bottles with banknotes, bury them at suitable
depths in disused coalmines which are then filled up to the surface with town
rubbish, and leave it to private enterprise on well-tried principles of
laissez-faire to dig the notes up again… the note-bearing territory), there
need be no more unemployment and, with the help of the repercussions, the real
income of the community, and its capital wealth also, would probably become a
good deal greater than it actually is. It would, indeed, be more sensible to
build houses and the like; but if there are political and practical
difficulties in the way of this, the above would be better than nothing.

from:

[http://ebooks.adelaide.edu.au/k/keynes/john_maynard/k44g/cha...](http://ebooks.adelaide.edu.au/k/keynes/john_maynard/k44g/chapter10.html)

~~~
ehnto
That sounds wholy unproductive to society though. It achieves the goal, but
only at a cost to the opportunity for those people doing something more
productive. Like building houses, as you have mentioned.

------
whack
I know this is supposed to be fictional, but whenever someone writes a
"fiction" like this, it's always intended as a _" this is what can really
happen if you aren't careful"_ kind of fiction. Which is why I have to take
issue with the following premise of the entire article:

 _" central bankers around the world simultaneously increased their inflation
targets from 2% to 4% and fully re-loaded their quantitative easing programs.
To their embarrassment, consumer prices only continued to decline"_

To quote an economist that I heard: _In the history of civilization, there has
never been a case of a central bank operating using fiat currency that has
tried to create inflation and failed._

If the government of any country wanted to create inflation, it's extremely
simple to do so. Just print $10,000 for every citizen in the country and hand
it out to them as a christmas gift. If $10,000 isn't enough to do the trick,
try a hundred grand. Or a million. At some point, the economy will be swimming
in so much cheap money, and a roughly fixed amount of real goods, that the
price of each good is bound to increase. Weimar Germany is a classic example
of this. The entire premise of this "fiction" is so flawed, that it can only
be described as fantasy.

------
Fjolsvith
Maybe you all missed what jumped out at me!

"As of July 2020, any member of the public caught holding more than $1000 in
bills risks having their stash confiscated, with corporations and financial
institutions facing cash limits of their own."

Edit: Or perhaps the article is a work of fiction?

------
Plough_Jogger
Not strictly related or necessarily unbiased, but Ray Dalio (Bridgwater)
provides a concise explanation of the levers that control the economy:
[https://www.youtube.com/watch?v=PHe0bXAIuk0](https://www.youtube.com/watch?v=PHe0bXAIuk0)

------
jqm
My understanding is that April Fools started as a way to make fun of people
who still celebrated New Year at the end of March. So maybe the timing of the
article is appropriate. It got me.

------
Spooky23
I don't think that anyone soon this would bury paper. If you want to hoard
value, gold, silver and copper are far more effective.

------
sandworm101
lol >>> smugglers have been diverting their hoardes across the border into
Mexico or Canada.

Yup. With a literal bucket full of cash, the safest place in the world is an
international boarder crossing.

~~~
goodcanadian
Well, it depends. Canada and Mexico may not give a damn about the hypothetical
U.S. currency export limits.

~~~
sandworm101
They do re their own rules on importing cash. Canada has a similar 10,000$
limit on unreported cash, a number which trips up many an american tourist.
With today's exchange rate, that's only 7-8000$ US. Normally they end up
filling out some forms and paying a penalty, but someone caught crossing
illegally with a pile of cash won't be keeping it.

~~~
goodcanadian
Yes, I'm well aware of that, but the article talks about some hypothetical
future. It may be that the limits get increased. It may be that they won't
care if you bring in cash far in excess of those limits as long as you declare
it. Et cetera, et cetera, et cetera. The point is that there is no reason to
believe Canada or Mexico will necessarily stop you from moving the cash even
if the US doesn't want you to.

