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Comment by md_ | Hacker News Reader

Cash in the bank normally doesn't keep up. If it does, the orthodox view is that you risk a deflationary spiral.

Central banks want to incentivize investments.

This is a phenomenon of the last two decades. Before the fed started cutting rates after 9/11 (to support the country, the financial markets, the housing markets, etc.) both money market and savings accounts (you had to choose a good bank) usually gave positive inflation adjusted return.

Barely.

In real terms US bills have returned 0.4%/yr over the last 120+ years

Seems to me Treasury bills meaningfully outpace inflation, on average: https://www.bauer.uh.edu/rsusmel/other/lrret1.htm. But I was talking about cash accounts, which typically pay lower interest rates than T-bills or CDs (as noted on the above link).

In the late 1990s my savings account at the EmigrantDirect was paying about 7% with inflation around 3%.

This was not a term deposit, but a regular account, either itself with check-writing privileges or linked to a checking account with 1-3 day transfers. I think MMFs with check-writing paid similar interest, although not 100% sure as I never put my money there. Those were cash accounts as I could withdraw any amount, up to 100% of the account any time without any penalties.

Owning shares in the entities for which money for goods and services pass through is the way to keep up with inflation. If I buy things from Costco/Apple/Toyota/Novartis/etc, then they increase prices, then their share prices go up accordingly.

Anything else will fall short.

It's not what they want. It's the mechanics of their business.

They borrow short at base rates and lend long at a margin

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