"The Swiss National Bank confirms that hoarding cash to circumvent negative interest rates is not welcome. The National Bank has been recommending that banks with cash demands [...] act restrictively."
"The monetary policy of the last few years has been hampered by the supposed existence of the 'zero lower bound' at which (it is assumed) everyone would opt for physical cash instead of bank deposits and bonds [...]"But if investors simply cannot obtain large amounts of physical cash because banks won't issue it to them, the slightly-below-zero lower bound cannot bind. In which case negative rates could be very negative indeed and no one would be able to do much about it."
- It is hard for them to control, track and tax.
- It is fast becoming irrelevant as new technologies make electronic transactions easier. (Think Apple's new iPay mobile payments system.)
- As long as you can hold cash, you can escape the feds' fantasyland. If you can stay in cash, they can't enforce negative interest rates. You can just take your cash and hold on to it – paying nothing for the privilege.