Can nothing save us?

How do you know things have got really, really bad? Because we have got to zero

Zero is the low beneath which there is no more low. It is nada. Naught. The absence of a thing. Zero: a losing score blanked! shut out!. A depleted bank account. Less than the bare minimum. Zero: the big fat loser.

Zero is the rate the Federal Reserve says it will now start charging or actually, not charging commercial banks for very short-term loans. To be precise, the new target rate is between 0 and 0.25 per cent. The government is in essence saying: you can have our money if you8217;ll just give it back later, no strings or interest attached. So the Fed has now compelled the financial world or what8217;s left of it to confront 8230; nothing.

The idea of zero seems caveman simple. Humans have understood nothingness since they first gazed upon an empty larder, though the mathematical notation of 8220;zero8221; took a few millenniums of civilisation to come into its own. Zero has a complicated history, and a murky one.

8220;The first problem to come along is deciding exactly what one means by 8216;zero8217; or, for that matter, 8216;0,8217; 8220; wrote noted mathematician Bill Casselman, of the University of British Columbia, in a recent issue of the American Mathematical Society8217;s newsletter. 8220;Is it a number in the mathematical sense8212;that is to say, the cardinality of the empty set? The length of a point? The result of subtracting 1 from 1?8221;

The Babylonians in what is now Iraq apparently got there first, putting a symbol for zero in their cuneiform tablets around 2000 B.C. The zero symbol became a way to distinguish similar-looking but greatly differing quantities, such as 686 and 6086. Others8212;the Mayans in Central America, the Indians8212;came up with a similar concept later, apparently independently of one another. Western Europeans were among the last to embrace the big 0; the idea wasn8217;t widespread until around the 12th century.

As digits go, zero acts in kinds of spooky ways. Nothing subtracted from something leaves the exact same something. But anything multiplied by zero leaves zero. Zero can be divided by any number but it can8217;t divide into anything.

Above all, zero is necessary. Without zero, all the complicated math you tried to avoid in school wouldn8217;t be possible. Nor would bookkeeping and commerce, physics and chemistry and much of modern science, including the language of computers8212;written as 18217;s and 08217;s.

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Which brings us around to the Fed8217;s approach to zero. The Fed is making it not just cheap for banks to borrow, but rather free. The strategy is to hose down America8217;s sclerotic financial system with so much cash that banks, in turn, will start making loans themselves. In this, the Fed8217;s rate-vaporising action is like a variation on the ancient joke about a failing business: how do they do it if they lose money on every sale? Volume!

The unprecedented move triggers a set of questions that force us to confront the void: can nothing save us? Is nothing good? Have we been held back for too long by something that, once removed, will make things a whole lot better?

Investors have already had a taste of nothing. Treasury bills have been driven so low these days that they are yielding zero. But zero looks good when you consider the alternatives. It sure beats going negative.