Not that I’m a proponent of the existence of government-issued bonds, but Japan’s new finance minister has a new proposal that is seemingly incredulous.
Stating yesterday, “It is worth considering no-interest-bearing bonds.”
Why? Because, “Japan’s households have around 1400 trillion yen ($15.2 trillion) in financial assets, half in savings and cash. Some lawmakers are seeking to unlock those savings and raise money to fund stimulus programs to spur the economy after gross domestic product fell at an annual 12.7 percent pace last quarter, the fastest since 1974.”
Out of curiosity, why do interest rates exist at all? What does time-preference mean? Will the phenomena of “risk” and “inflation” cease to exist during this time frame?
Think anyone would fall for it?
See also: The Japanese just didn’t try hard enough