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I would argue that the reason is simply that physically holding cash has a negative interest rate since you have to pay for a place to keep it, people to protect it, and accept the risk that it gets damaged, lost, or stolen.

This applies whether you are a person with a wallet/mattress, or a bank with a high security vault.

Yes, and due to inflation.

>and due to inflation.

That happens regardless of the interest rate and affects both cash and bond/treasuries.

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