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German banks are hoarding so many euros they need more vaults

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

#161

Post by ianlevesque »

reaperducer wrote: post #153
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

This problem has probably been exacerbated by the fact the the $500 euro note has not been issued since 27 April 2019 The United States used to print $100,000 notes. They were only available to banks for moving from bank to bank, I believe, and so were useful for reducing the number of notes that needed to be stored by banks, while keeping them out of the hands of criminals.

> They were only available to banks [...] while keeping them out of the hands of criminals.

So they were discontinued when they couldn't find any non-criminal bankers?

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

#162

Post by MrBuddyCasino »

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.

This kind of talk is irresponsible. Debt isn't free, you pay interest on it, you children might have to pay interest on it. Debt introduces systemic fragility. If the only way to grow your economy is rising public debt, something is fishy.

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

#163

Post by petschge »

kgwgk wrote: post #160
corford wrote: post #147

Earlier quoted context omitted.

What? You go to a car dealer, sign, pay and drive away.

Don’t you need to register the car in the DMV and get an insurance before you can drive away? That’s definitely the case in the parts of Europe I’m familiar with.

Getting insurance can be done online in about 5 minutes and the registration at the DMV equivalent is your problem (as the buyer) afterwards and can be done anytime in the next 2 weeks.

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

#164

Post by pergadad »

Fishysoup wrote: post #125
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.

Germany is obsessed with keeping the value of the Euro low to maximize their exports. That's one of the reasons they've been pushing austerity after the economic crisis, as keeping countries like Greece, Portugal etc. in a rut depreciates the currency (the other reason is a weird sense that countries in debt have committed some moral failing and should be punished). Their trade surplus has been a subject of intense c…

That's nonsense. The reason for low interest rates is so that Italy won't collapse. It's widely hated in Germany as bank accounts have basically zero interest nowadays.

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

#165

Post by toss1 »

samsonradu wrote: post #143
Despegar wrote: post #26

Earlier quoted context omitted.

>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…

Japanese deflation is brought up a lot. However it didn’t really strike me as a troubled economy when visiting - on the contrary, things looked quite well. Can someone elaborate on why deflation is so bad?

Deflation is bad because it is a self-reinforcing slowdown in the economy.

The money gets more valuable and the assets get cheaper. so the incentive in every micro-decision is to hoard money and not spend. Why spend when the same thing will get cheaper tomorrow/next week/month/year...?

So, the key factor of the Velocity of Money declines, and the entire economy either grinds or crashes to a (relative) halt.

My understanding is that deflation is also very hard to get out of. Requires massive liquidity injections, and doing that without creating a crisis of confidence by overshooting is tough.

For the current situation, my working conjecture (w/o running hard numbers/models) is that the Great Recession 11yrs ago destroyed so much wealth/value, and was so deflationary, that the central banks may never soon fill the hole with new liquidity. The evidence is that despite nearly continuous quantitative easing and other CB programs, over a decade later, we're still seeing this kind of phenomena - they just can't create & maintain even minimal inflation. Not sure what to do about it, but that's what I see...

(edit: typos)

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

#166

Post by aianus »

decentralised wrote: post #149
TremendousJudge wrote: post #13

Earlier quoted context omitted.

According to that same article, the reason for retiring the note was because the people who benefited the most from its existence are criminals, who need to do their business in cash -- the fewer notes, the easier for them. That includes storage, I guess. Still, I'm personally not in the eurozone, but in general terms for the end user high-denomination notes are not very useful unless you're gonna store them under yo…

I've been in the eurozone since it started.. only ever saw 500 euro bills being exchanged in casinos.

I exchanged cash in Canada before heading to EU for 10 weeks and the kiosk gave me all EUR500 notes and said it was all they had.

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

#167

Post by lixtra »

TremendousJudge wrote: post #13
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

According to that same article, the reason for retiring the note was because the people who benefited the most from its existence are criminals, who need to do their business in cash -- the fewer notes, the easier for them. That includes storage, I guess. Still, I'm personally not in the eurozone, but in general terms for the end user high-denomination notes are not very useful unless you're gonna store them under yo…

> Actually using them to buy things is a pain, since most businesses won't accept them.

For me it always went smoothly when buying something that exceeded the value of the high note. Your experience may differ if you buy a roll in the bakery.

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

#168

Post by kgwgk »

petschge wrote: post #163
kgwgk wrote: post #160

Earlier quoted context omitted.

Don’t you need to register the car in the DMV and get an insurance before you can drive away? That’s definitely the case in the parts of Europe I’m familiar with.

Getting insurance can be done online in about 5 minutes and the registration at the DMV equivalent is your problem (as the buyer) afterwards and can be done anytime in the next 2 weeks.

I can see that happening for second-hand cars but not for new cars that have to be issued new plates. But maybe things work differently in other countries. “Europe” is not really one place.

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

#169

Post by snovv_crash »

decentralised wrote: post #149
TremendousJudge wrote: post #13

Earlier quoted context omitted.

According to that same article, the reason for retiring the note was because the people who benefited the most from its existence are criminals, who need to do their business in cash -- the fewer notes, the easier for them. That includes storage, I guess. Still, I'm personally not in the eurozone, but in general terms for the end user high-denomination notes are not very useful unless you're gonna store them under yo…

I've been in the eurozone since it started.. only ever saw 500 euro bills being exchanged in casinos.

And yet across the border, I've been given a CHF1000 note cashing a deposit slip in a post office.

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

#170

Post by Symbiote »

virgilp wrote: post #131
detaro wrote: post #121

Earlier quoted context omitted.

Debit cards and credit cards are quite different things in most of Europe.

To be fair, in Romania I was refused too, ~5years ago. All cards have a percentage fee - when you spend tens of thousands on something, even a small percentage adds up. Thus the car dealers require a bank transfer, which is generally free of charge for both parties.

It looks like the change in 2015/2016 to reduce card fees, while enabling us to buy a single bottle of milk by card with a 0.2% fee for the merchant, has made things worse for people selling cars.

Instead of a small, fixed fee (e.g. £0.10) it's now also 0.2%.

https://www.am-online.com/opinion/2016/12/06/opinion-debit-c...

(The article does at least tell us that "many" customers pay for the full price of the car with a debit card.)

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