| You cannot sensibly target M2 directly. You can target M0, but not M2. The interest rate is an indirect control on M2. (This actually also applies in bitcoin! It's just that because bitcoin credit markets are extremely poorly developed the M2 is both much closer to the M0 and much harder to measure. There are also several completely uncontrolled dollar-flavoured tokens circulating on exchanges such as Tether.) Why can't you control M2? Because issuance of credit is decentralized. The hard money people would like to split out deposit-keeping (which would inevitably have to charge, not pay interest) and lending out (which would have to be limited to the amount of equity available, as it is to e.g. VC funds). This would make business credit, consumer credit, and mortgages much more expensive. > designed to penalise anyone who tries to preserve wealth in actual cash These people are a tiny minority of outliers and trying to force up the cost of credit, on which the real economy runs, to benefit them is pointless. (also, the Japanese system rewarded cash holders! Bank depositors got paid nothing: https://moneykit.net/en/guide/yen/ "As of 20, 3, 2024, the interest on Yen savings account is 0.001%. Interest will be taxed at 20.315%") |