Re:The War on Cash
by dragonwriter on Wednesday February 17, 2016 @12:11PM
(#11119334)
> A bank balance can lose nominal value with NIRP, but cash in-hand can't.
If by "nominal value" you mean "printed face value", then perhaps not (though there are plenty of time or environment-sensitive printing technologies that would allow that to change, even if there might be all kinds of good arguments against using them on currency.)
If, instead, by "nominal value" you mean "official exchange/redemption value in the units of account in which the cash is denominated", sure it can; in fact, cash that does that has been suggested and, IIRC, used in some cases -- this is done by making the nominal value (that is, the official value in current units of account) equal to the face value at the time of issue, but decreasing over time based on the duration between the issue date on the cash and the current date, so that cash held longer is worth less, even in nominal terms, as a tool to increase the velocity of money.
If by "nominal value" you mean "printed face value", then perhaps not (though there are plenty of time or environment-sensitive printing technologies that would allow that to change, even if there might be all kinds of good arguments against using them on currency.)
If, instead, by "nominal value" you mean "official exchange/redemption value in the units of account in which the cash is denominated", sure it can; in fact, cash that does that has been suggested and, IIRC, used in some cases -- this is done by making the nominal value (that is, the official value in current units of account) equal to the face value at the time of issue, but decreasing over time based on the duration between the issue date on the cash and the current date, so that cash held longer is worth less, even in nominal terms, as a tool to increase the velocity of money.