Maybe I missed something in that article, but I see two really glairing problems with this idea, other than the fact that it is so irresponsible and cruel.
1) This would depress sales, not increase them. The closer and closer to the “hat picking date” more and more stores would demand credit/check/or debt payments and not cash. Hell a few weeks before they wouldnt accept cash at all. But consumers would be DEMANDING to pay in cash, cause they would want to get rid of it. Sales would plumet, or prices skyrocket by 10% plus. Vending machines would all suddenly be “out of service”. Those terrible ‘pay day loan’ places would be screwed as no one would want cash (maybe a fringe benifit???)
It would fall terribly hard on the poorest people, who use cash because they are terrible credit risks and dont have enough money for legit bank accounts. How would kids/teens get payed or pay for stuff? There is a bill now to outlaw them having a credit card in the Senate. So they wouldnt be able to avoid the financial losses as we would, and believe it or not they spend alot of money. (movies, clothes, junk food, etc) It would be crazyness.
2) To avoid the above crazyness, most people would just deposit most of their cash money in the banks. I could deposit $100 the day before the devaluation, the bank would loose $10 per deposit overall, but would still owe me $100 the day after. It would wipe out the banks capital ratio’s, atleast the ones linked to hard cash in their vaults. And arnt we spending trillions to shore up the banks already? So maybe the banks only loose a few billion, how many people think they can withstand that kinda loss in 1 day?
I just dont see how this is a good idea at all, unless you put your time interval for evalation to end like a month before all hell broke loose.
