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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

#301

Post by lpcn112 »

wolfgke wrote: post #198
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…

> 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. This is what they want the citizens to believe.

In 2016 India did the infamous demonetization claiming that the ₹500 notes were used in hoarding black money and funding terrorism.

It ended up massively shocking the unorganised economy, and the nation is still recovering from it. The main reasons the government stated while doing it are still going on. The entire exercise didn't solve any problems.

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

#302

Post by Mirioron »

tinus_hn wrote: post #176
Mirioron wrote: post #128

Earlier quoted context omitted.

Don't they run all the notes through the checker?

No, that takes way too much time. If you check using a UV light you’ll notice most simple forgeries but I guess most people just don’t expect small bills to be forged.

Does it? Every time somebody pays in cash in a store here they run each bill through a machine that, I'm pretty sure, checks the authenticity of the bill.

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

#303

Post by Wildgoose »

pujjad wrote: post #288
tiku wrote: post #98

Earlier quoted context omitted.

We don't really use checks in Europe, at least not in the Netherlands..

But in the UK we do. You can set up a bank accounts which requires two signatures, then only cheque payments are possible. Very quiant, annoying and backwards.

I am the Treasurer of a Charity we set up to keep our local Library open. We need two signatures on our cheques - but not to be "annoying" or "backwards". It's simple security to stop a rogue actor emptying our bank account!

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

#304

Post by 1337biz »

jotm wrote: post #80

Why in the world does Germany not have a decent VC/investment industry? Seems like some companies and people are loaded with cash but they'd rather keep it in a bank than risk it on a new startup. You're not going to get many innovative startups doing that...

Historic risk aversion. The two wars, the DDR, the Eurozone.

Germans have experienced over and over again that they can't count on the government to make good decisions for their money. I know quite a few who try to keep their bank balance always around a zero and invest the money they have in other forms of storage they feel more ownership about (i.e. real estate).

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

#305

Post by QuesnayJr »

conanbatt wrote: post #216
QuesnayJr wrote: post #215

Earlier quoted context omitted.

Running deficits is not the same as inflation. There's no place for Germans to save, and its because the German government won't borrow. A sensible policy would be for the German government to borrow and invest heavily in infrastructure. Instead Germany has opted for policies that will cause it to teeter on the edge of recession for decades.

> A sensible policy would be for the German government to borrow and invest heavily in infrastructure. Or reduce taxation and make everyone but government richer.

That would also work.

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

#306

Post by QuesnayJr »

dx034 wrote: post #284
QuesnayJr wrote: post #215

Earlier quoted context omitted.

Running deficits is not the same as inflation. There's no place for Germans to save, and its because the German government won't borrow. A sensible policy would be for the German government to borrow and invest heavily in infrastructure. Instead Germany has opted for policies that will cause it to teeter on the edge of recession for decades.

There are places for Germans to save but they really dislike investments or any type of risk. Sure, Germany could borrow more and issue bonds but I doubt this would change yields for those bonds so much that investing in them is worth it for retail investors. The demand by institutional investors (insurances, pension funds) easily outweigh retail demand. Also, how would Germany invest in infrastructure if order books…

Germans have three choices -- either they invest in risky assets, they increase deficit spending to increase the supply of safe assets, or they accept permanently low interest rates and hoard euros.

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

#307

Post by luckylion »

throwawaylolx wrote: post #298
luckylion wrote: post #286

Earlier quoted context omitted.

Again, it's taxes vs private money. And "the whole deal" really was about a politically unified Europe, the "purely economic union" wasn't a thing anymore when the east expansion happened. That certainly was parts of it, but let's not create alternative history. Besides, "lost and won" is terribly weird when you just look at money flows but exclude goods. Hey, sell me your $30k car for $1000, you'll be the winner, be…

>Again, it's taxes vs private money. That's the entire point of the article, the author is not "confusing" them: >The talks cannot just be about public money, and should not become a brawl between "net contributors" and "net beneficiaries."

> That's the entire point of the article, the author is not "confusing" them

I very much believe they are intentionally confusing them because it makes their point. In a "that's basically the same, don't look too hard, just listen to these huge numbers" kind of way.

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

#308

Post by Gustomaximus »

marriedWpt wrote: post #18
Gustomaximus wrote: post #15

Earlier quoted context omitted.

Very generally, my gripe with MMT is maybe it could work if well run. I'm not convinced but let's say it's possible. Next step, can we trust politicions to run the program effectively? I suspect they would always try to squeeze more out than practical that would lead to issues... And that's if it would work in the first place. I'd like to see some countries try it and prove/disprove, just not mine first.

Hasn't Japan already gone through the course?

What course? Would you say they are running MMT, or just closer to than other countries. They have embraced increased holdings for ~6 years. Def the petri-dish but still seems early days.

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

#309

Post by toper-centage »

veselin wrote: post #199
njarboe wrote: post #180

Earlier quoted context omitted.

The US also had lower denomination bills like the $500 and $1000 until 1969. They were not in much use then but I think that they could have useful legal uses today considering all of the inflation that happened since 1969. The $500 now would be about like $75 in the 1960's.

Switzerland is probably the exception, but 200CHF bills are accepted without problems at most places (1 CHF is roughly 1 USD). There are also the less frequently used 1000CHF bills. I don't remember problems buying stuff with them s well, e.g. at supermarkets, once I bough stuff from IKEA with one such bill.

1chf is about 1 euro but things cost 5 times more in Switzerland than in the surrounding countries.

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

#310

Post by raxxorrax »

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…

The Japan is failing meme is astonishing. It might have some slight demographic problems, but the solution of increasing the workforce without limits is more a failure of economic analysts than the economy of Japan.

Many countries would kill to have these problems, which might just be completely irrelevant. The numbers from Japan look pretty good.

Deflation isn't inherently good, inflation isn't inherently good. Most popular economic indicators are probably trash.

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