The Future of Everything

January 25, 2012

Paying for parking

Filed under: World Finance column — Tags: — David @ 9:15 am

Money that pays negative interest … just what the world needs? From World Finance.

When we deposit money in the bank, we usually expect to receive interest in return. But would it be better for the economy as a whole, if instead we had to pay to have our money looked after?

The cost of keeping money, known as demurrage, has been a feature of some currency systems since ancient times. In fact any currency based on commodities will have associated storage costs. For gold, there is the cost of protecting it; for wheat, there is loss due to spoilage.

Those expenses seem like a disadvantage. But just as parking fees make the allocation of parking spaces more efficient, so currency charges can make money more efficient.

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