In response to an FT debate between Ken Rogoff and Clemens Fuest on 15th May 2016, entitled ‘Should we get rid of the €500 note?’
“The dirty little secret of advanced-country central banks is that the vast bulk of all currency is held in very large denomination notes that are overwhelmingly used by those engaged in tax evasion and crime of all sorts” – Professor Kenneth Rogoff
No, Professor Rogoff , that'll be your little secret. I suggest you file it with the daily anguish about drug dealing that the ECB has struggled with for the past 17 years - the anguish that was such a well-kept secret that even they didn't know they were suffering from it.
What is not such a secret is that the ECB's 'problem' with cash has become a priority since zero interest rates have proven themselves to be inadequate for their machinations; since it became apparent that in order to prop up the EU's zombie banks and insolvent governments, negative rates are necessary. Further - that after a certain point, which you are not clear about, a ban on cash would be terribly convenient - to prevent people from taking their money out of the clutches of governmental thieves, as they are doing in Japan - which is experiencing a bull market in the sale of household safes.
The other thing that is increasingly not such a well kept secret is that you and your colleagues in Academia Central don't really know what you're doing, and that you've been experimenting with monetary fantasies since the day that Ben Bernanke looked in the mirror and thought he saw Milton Friedman. A growing number of people are also waking up to another little ruse - that if pretending to understand the economy is necessary to keep the confidence trick going, then you will happily do so ad infinitum…along with fellow ‘useful fools’ such as Professors Summers and Krugman. In the world outside politics, for politicians is what you are, this is called ‘lying’. But whatever you call it, it is increasingly clear that you are prepared to do it until the world collapses around your ears. Don’t worry – not too long to wait now.