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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

#231

Post by lallysingh »

Frost1x wrote: post #191
jimmaswell wrote: post #186

Earlier quoted context omitted.

Cash will continue to be #1 for Craigslist/yard sale-type transactions for a long time I'd say.

Would you accept a $1000 or even $500 note from a craigslist transaction? I'm usually pretty hesitant to accept anything over a $20 or even deal in cash for small exchanges. I wouldn't even consider $500 unless I had a way to strongly guarentee the bill I'm looking at isn't fake. It would take a bit of time and research before I felt confident enough at identifying these bills to accept them in a trade. I'd have to d…

Probably 5 minutes on YouTube and a special pen from Amazon

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

#232

Post by rabuse »

iambateman wrote: post #225

This may be a stupid question...but is there a paper dollar corresponding to every dollar I have in my bank account? I always assumed that some of the currency issued by governments was exclusively digital.

The accounting is tied to the Federal Reserve by mere bookkeeping for the bulk of it. If the banks are short on cash, they have the fed just print it for them.

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

#233

Post by rabuse »

companyhen wrote: post #146
marriedWpt wrote: post #16

Earlier quoted context omitted.

This makes sense to me, but I don't see democratic countries able to stop themselves before it's too late. What comes after? This exact problem is why I liked Bitcoin a few years ago. Although with the scaling issues, it seems less useful than I expected.

Do you think raising the block size would create more issues? Although it seems BTC is committed to layer 2 scaling solutions.

Raising the block size creates numerous issues, especially for nodes running on consumer systems with limited storage (which is most), and the network starts to become more centralized. We don't want the majority of nodes becoming SPV clients/pruned nodes, due to full blockchain storage costs.

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

#234

Post by imtringued »

blazespin wrote: post #41
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.

Savers are bad for the economy at large though because they don't invest in high risk businesses, but rather in low risk assets (RE, bonds, etc) that do nothing for no one. They're like scrooge mcduck swimming in their pile of gold.

>that do nothing for no one

I'm not sure you understand these assets if you think they do nothing. If you want to rent an apartment then someone has to build and own it first. If you want to borrow money for your business then someone has to save money and put it aside so it becomes available to you. Your comparison to scrooge mcduck doesn't make sense because you're assuming that the money will never be used. If your goal is to save 20000€ over 7 years to buy a car without financing then you would be incredibly foolish to put that money into a risky asset. If the stock market crashes the same year you wanted to buy your car the you will need to obtain liquidity by borrowing money from a bank (remember those stupid scrooge mcducks swimming in their pile of gold? now you're begging them to give you money) and getting the car loan you wanted to avoid with the hope that in 3 years the value of your asset recovers and you can finally sell it to pay off the loan.

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

#235

Post by dalyons »

jimmaswell wrote: post #186
Frost1x wrote: post #185

Earlier quoted context omitted.

I'm trying to think of places that would want to accept $500 to $1000 notes when many places won't even accept a $50 or $100 and consider them "large bills." While I agree with your premise that inflation makes $500-1,000 notes practical from the standpoint of modern expenses, businesses I interact with tend to prefer a third party to verify payment (CC merchant, cashiers check, etc.). Cash is dying and although I lo…

Cash will continue to be #1 for Craigslist/yard sale-type transactions for a long time I'd say.

Eh last few times I’ve done this I used venmo, works great with strangers too

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

#236

Post by evanpw »

jdc wrote: post #230
iambateman wrote: post #225

This may be a stupid question...but is there a paper dollar corresponding to every dollar I have in my bank account? I always assumed that some of the currency issued by governments was exclusively digital.

Most banks are required to keep 10% of the deposits https://www.investopedia.com/terms/f/fractionalreservebankin...

Electronically, in an account at the Federal Reserve

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

#237

Post by iambateman »

rabuse wrote: post #232
iambateman wrote: post #225

This may be a stupid question...but is there a paper dollar corresponding to every dollar I have in my bank account? I always assumed that some of the currency issued by governments was exclusively digital.

The accounting is tied to the Federal Reserve by mere bookkeeping for the bulk of it. If the banks are short on cash, they have the fed just print it for them.

This is what I imagined and would seem to prevent the vault-size problem.

Interesting.

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

#238

Post by hirsin »

1337biz wrote: post #21
hirsin wrote: post #14

Earlier quoted context omitted.

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."

There are valid reasons to have anonymity on the internet - plenty of them. It's really hard for me to grok the intrinsic value and human right of carrying a 200 note instead of two hundreds. If I'm gift giving, maybe, but frankly I can't stand getting hundreds as gifts, they're a pain to spend and just cause more work for me.

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

#239

Post by Spooky23 »

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.

Not really. The big notes were only for interbank settlement, and usually represented gold or silver.

Once electronic settlement became common, these bills became obsolete.

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

#240

Post by Spooky23 »

reaperducer wrote: post #196
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.

The US also had lower denomination bills like the $500 and $1000 until 1969. They were not in much use then I seem to remember in that era they were useful for some people. My mother worked for a bank in Manhattan and on paydays she would take her check downstairs and cash it, come home with the money in her bra, and then deposit it in our local bank. Why she didn't just deposit her check, I can't say. Maybe she didn…

Banks were a lot harder to deal with. They closed at 3 and were shuttered for the weekend.
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