German banks are hoarding so many euros they need more vaults
1–10 of 327 posts
Re: German banks are hoarding so many euros they need more vaults
#2This problem has probably been exacerbated by the fact the the $500 euro note has not been issued since 27 April 2019[1]. I wonder if making storing euros in cash 2.5 times harder (500 versus 200 euro notes) was part of the reason the 500 euro was retired.
[Edit] The legal storing of cash. The stated reason was the criminal use of cash.
Re: German banks are hoarding so many euros they need more vaults
#3The crazy thing is that Germany is killing their own banks. They refuse to run fiscal deficits while at the same time they criticize the ECB for lowering rates and hurting the German Saver, when the German Saver is who would benefit if they decided tomorrow to run deficits for the next 10 years.
Re: German banks are hoarding so many euros they need more vaults
#4Negative interest rates are long time lethal to financial institutions such as banks and insurance companies. Hoarding printed paper is just a hilarious side effect, but the reality is that under negative rates the financial institutions are, at best, delaying their inevitable bankruptcy.
https://moneyandmarkets.com/jeffrey-gundlach-negative-intere...
Re: German banks are hoarding so many euros they need more vaults
#5This problem has probably been exacerbated by the fact the the $500 euro note has not been issued since 27 April 2019[1]. I wonder if making storing euros in cash 2.5 times harder (500 versus 200 euro notes) was part of the reason the 500 euro was retired. [Edit] The legal storing of cash. The stated reason was the criminal use of cash. [1] https://en.wikipedia.org/wiki/500_euro_note
500 euro was (and is) essentially not used for any day to day payments - i.e. the most important reason for having printed paper as money.
Re: German banks are hoarding so many euros they need more vaults
#6Additionally, the cash limit to anonymously buy gold is now 2.000 Euros (since Jan 2020).
https://news.bitcoin.com/germans-rush-to-buy-gold-as-draft-b...
You need a lot more space to store 10.000 € in cash than in gold.
Re: German banks are hoarding so many euros they need more vaults
#7There's also a long-standing rumor that the Germans have warehouses full of Deutschmark notes all printed up and ready to roll out, in the event of a currency Armageddon with the Euro.
Re: German banks are hoarding so many euros they need more vaults
#8Surely the banks have to declare how much cash they're holding. Couldn't they just be forced to pay negative interest on that?
..or give the money to someone else for a while so they can do something with it.
Re: German banks are hoarding so many euros they need more vaults
#9Additionally, the cash limit to anonymously buy gold is now 2.000 Euros (since Jan 2020). https://news.bitcoin.com/germans-rush-to-buy-gold-as-draft-b... You need a lot more space to store 10.000 € in cash than in gold.
why would banks care if it is anonymous?
Re: German banks are hoarding so many euros they need more vaults
#10The crazy thing is that Germany is killing their own banks. They refuse to run fiscal deficits while at the same time they criticize the ECB for lowering rates and hurting the German Saver, when the German Saver is who would benefit if they decided tomorrow to run deficits for the next 10 years.
Be careful what you wish for. I agree with Stieglitz that the Troika has historically not chosen the best path for crisis countries by implementing austerity. My fear with using Fiscal Policy and running deficits is that it is hard for a politician to win a campaign fighting for austerity if and when the debt binge becomes to great. From my own understanding, that is why monetary policy is strongly preferred because it’s easier to roll back but Europe is at their end of Monetary policy. I wish I understood MMT better, it’s something discussed in the circles of parliament and congress but I don’t think the average joe is aware.