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German banks are hoarding so many euros they need more vaults

bloomberg.com

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Re: German banks are hoarding so many euros they need more vaults

#21

Post by 1337biz »

hirsin wrote: post #14
njarboe wrote: post #2

This 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

Indeed it was. Even now the 200 Euro note is the best for laundering and transportation since it's the highest value bill in common circulation (per Fed employee)

Well, I am no expert but let me play the futurist here. After they killed the 200 Euro note it is going to be the 100 Euro note that is going to be used by those damn criminals!

It is in essence part of the same eradicating rights movement that is fighting against anonymity in the internet. "Hey look, there are some criminals benefiting from it so let's kill it."

Re: German banks are hoarding so many euros they need more vaults

#22

Post by hocuspocus »

cwperkins wrote: post #10
Despegar wrote: post #3

The 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…

> Europe is at their end of Monetary policy

I genuinely wonder why you believe that? Everything points to the status quo.

Re: German banks are hoarding so many euros they need more vaults

#23

Post by aazaa »

Despegar wrote: post #3

The 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.

> ... when the German Saver is who would benefit if they decided tomorrow to run deficits for the next 10 years.

The German Saver knows better than most that inflation destroys savings.

Inflation benefits debtors by allowing them to pay back their loans in depreciated currency. Germany isn't exactly a nation of debtors, although most of Europe is.

This is a looming political issue that's only just beginning.

Re: German banks are hoarding so many euros they need more vaults

#24

Post by denzil_correa »

Despegar wrote: post #3

The 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.

> They refuse to run fiscal deficits

Germany has a debt brake law (Schuldenbremse) that limits structural net borrowing to 0.35% of the GDP.

Re: German banks are hoarding so many euros they need more vaults

#25

Post by TheSoftwareGuy »

ginko wrote: post #8

Surely 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.

>Surely the banks have to declare how much cash they're holding. Couldn't they just be forced to pay negative interest on that?

Could they? With appropriate legislation/government action, of course.

>..or give the money to someone else for a while so they can do something with it.

You are talking about forcing them to invest the money. And what happens if that person cannot pay back what was lent to them? If there were any available investments that were safe enough, the banks would be tripping over each other to make that investment, believe me. Hoarding money costs the bank money. Investing it is not only free, but it turns their money into more money. If you were to force them to make unsafe investments, then that risk is essentially passed onto the people who deposited their money in that bank, in the form of potentially not being able to withdraw their money.

Re: German banks are hoarding so many euros they need more vaults

#26

Post by Despegar »

aazaa wrote: post #23
Despegar wrote: post #3

The 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.

> ... when the German Saver is who would benefit if they decided tomorrow to run deficits for the next 10 years. The German Saver knows better than most that inflation destroys savings. Inflation benefits debtors by allowing them to pay back their loans in depreciated currency. Germany isn't exactly a nation of debtors, although most of Europe is. This is a looming political issue that's only just beginning.

>The German Saver knows better than most that inflation destroys savings.

Yeah this is not the outcome Germany or the EU needs to worry about. It's experiencing Japanese deflation for 20 years.

>This is a looming political issue that's only just beginning.

Yes there's been plenty of hard money cranks that have said this for 10 years since the Great Financial Crisis in the US. Zero Hedge, gold bugs, hedge fund managers, etc have all been sounding the alarm about "money printing" and the deficit. There's no inflation in sight.

Re: German banks are hoarding so many euros they need more vaults

#27

Post by cwperkins »

Despegar wrote: post #20
cwperkins wrote: post #10

Earlier quoted context omitted.

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…

This is absurd in the context of Germany. They have a fetish with "fiscal responsibility". It'd be the natural inclination of every politician to cut back on deficits (and I imagine within a few years there'd be pressure to). Germany is a country with a broken military and infrastructure. They should spend money on that. They should cut taxes for workers. There's plenty of shit for Germany to spend money on, and it w…

I want to be clear that I think the Germans, Dutch and Swedes can afford to do more for the benefits of their own economies and of Europe’s. Germany needs to ween itself off of lignite coal and get better broadband infrastructure as well as contribute more to NATO.

On the other hand in a place like Argentina, I’m not sure what the exit strategy.

Re: German banks are hoarding so many euros they need more vaults

#28

Post by xenonite »

hirsin wrote: post #14
njarboe wrote: post #2

This 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

Indeed it was. Even now the 200 Euro note is the best for laundering and transportation since it's the highest value bill in common circulation (per Fed employee)

It seems the CHF 1000 note has the highest value among all.

Re: German banks are hoarding so many euros they need more vaults

#29

Post by [deleted] »

Despegar wrote: post #26
aazaa wrote: post #23

Earlier quoted context omitted.

> ... when the German Saver is who would benefit if they decided tomorrow to run deficits for the next 10 years. The German Saver knows better than most that inflation destroys savings. Inflation benefits debtors by allowing them to pay back their loans in depreciated currency. Germany isn't exactly a nation of debtors, although most of Europe is. This is a looming political issue that's only just beginning.

>The German Saver knows better than most that inflation destroys savings. Yeah this is not the outcome Germany or the EU needs to worry about. It's experiencing Japanese deflation for 20 years. >This is a looming political issue that's only just beginning. Yes there's been plenty of hard money cranks that have said this for 10 years since the Great Financial Crisis in the US. Zero Hedge, gold bugs, hedge fund manager…

[deleted]

Re: German banks are hoarding so many euros they need more vaults

#30

Post by cwperkins »

hocuspocus wrote: post #22
cwperkins wrote: post #10

Earlier quoted context omitted.

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…

> Europe is at their end of Monetary policy I genuinely wonder why you believe that? Everything points to the status quo.

The ECB is currently at a -0.5% deposit rate. The SNB is at -0.75%. Perhaps there is room to go down, but the banks are struggling and pushing back.
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