Before I get into the importance of zero at the end of this article, I have to talk about Miles Kimball. Miles Kimball has a really sneaky way of destroying cash. The economics professor at University of Michigan has called for paper money to be valued at a discount to digital money. Of course, that will drive paper money out of existence, as people will do as many transactions as they can digitally, as unwitting pawns in the central banks’ movement towards totalitarianism.
Miles is somewhat important in economic and central banking circles. He has written many articles on Quartz, and couches his quest for a digital money standard in moral terms. He says this debasing of physical cash will create honest money, and be a moral way to do things. It just proves that you cannot trust an economist with morality. Miles made this astonishing statement:
What the opponents of primacy for electronic money fail to realize is that making electronic money the economic yardstick is the key to eliminating inflation and finally having honest money.The European Central Bank, the Fed, and even the Bank of Japan increasingly talk about an inflation rate like 2% as their long-run target. Why have a 2% long-run target for inflation rather than zero—no inflation at all? Most things are better with inflation at zero than at 2%. The most important benefit of zero inflation is that anything but zero inflation is inherently confusing and deceptive for anyone but the handful of true masters at mentally correcting for inflation. Eliminating inflation is first and foremost a victory for understanding, and a victory for truth.
His seemingly strong argument is, that you could eliminate inflation if you devalued cash along with negative interest rate , or even more than digital money. But surely, your paper or coins in cash would feel an immediate inflationary shock. And what about the moral need for cash. Poor people and travelers need cash. Why should their cash be worth less than your digital money, as it becomes a regressive tax on the poor?
