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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

#311

Post by raxxorrax »

AWildC182 wrote: post #142
yorwba wrote: post #73

Earlier quoted context omitted.

> It's experiencing Japanese deflation for 20 years. GDP per capita (PPP) in Japan has more than doubled over the past 30 years. https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat... Slow growth is only a problem if you rely on investing to generate your income. Otherwise, even no growth at all is fine.

Have there been any major issues with declining QOL in Japan? It might be a cultural barrier but aside from the deflation stories making the rounds, I don't hear much about them suffering because of it.

They probably don't and economic analysts are probably just bad or lying.

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

#312

Post by raxxorrax »

toss1 wrote: post #165
samsonradu wrote: post #143

Earlier quoted context omitted.

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 unders…

But this is all conjecture from economic theories that might or might not be true.

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

#313

Post by raxxorrax »

yokaze wrote: post #101
growlist wrote: post #77

Earlier quoted context omitted.

I think the moralizing is useful if it means future generations aren't going to pay the price for today's profligacy.

Instead future generations are going to pay for today's economic ideology

Creating debt is taking money from the future. There are some discrepancies between running a business and a national economy, but I think the results are still pretty unknown.

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

#314

Post by CapricornNoble »

VBprogrammer wrote: post #36
njarboe wrote: post #31

Earlier quoted context omitted.

True. But it is nice to have large bills when buying something that costs a lot, like a used car. I recently did that in the US and if I had some $500 or $1000 bill things would have went a bit smoother at that nervous time in the transaction when you are handing over to a person a big chunk of money.

You tend to run into the problem that forging large notes has a much greater return on investment. People get nervous about accepting them. In the UK this definitely kicks in around the £50 mark.

I love how Japan is a cash economy. It's normal to walk around with 2-5 $100-equivalent bills (the 10,000 Yen note) as pocket change for a week or so.

Paid $22,000 in Y10,000 notes for a private event once. The staff didn't even bat an eye.

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

#316

Post by smabie »

AmericanChopper wrote: post #187
Analemma_ wrote: post #74

Earlier quoted context omitted.

Inflation isn't just about money supply (no matter what certain people on the internet tell you), it's about money velocity. If the central bank prints a hundred billion dollars but it immediately gets stashed in vaults or under people's beds or in international tax havens, it might as well not exist and there's no inflation. The "pushing rope" metaphor for inability to create inflation is a good one.

I think liquidity might have been the word you were looking for, but your example was not an increase in money supply. Creating money and storing it in a bank account increases supply. Creating money and adding it to a banks reserves increases supply. Withdrawing cash and permanently storing it somewhere decreases supply. Increasing reserve requirements decreases supply. If the amount held in reserve goes up because…

Most economists look at the velocity and supply in order to calculate inflation for their models. If you want combine them into supply and demand, fine. But seperating the concepts is valuable. Moreover the velocity and liquidity of money are seperate concepts.

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

#317

Post by pujjad »

Wildgoose wrote: post #303
pujjad wrote: post #288

Earlier quoted context omitted.

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!

Yep I get that, but the artist playing at our charity festival have complaint every time about having to deal with cheques both I (treasurer) and the other finance officer have to sign. Why is it that in the 21st century we can't have a digital online two-signature policy yet have to sign a paper which signatures one easily can forge. That's backwards. We got cryptocurrencies but no way to implement a digital two-signature policy? Odd.

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

#318

Post by corford »

ryanlol wrote: post #178
corford wrote: post #147

Earlier quoted context omitted.

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

The “pay” part really depends on the value of the car and if you have a big pile of cash handy. Recently instant SEPA transfers have made this easier, but not available between all banks.

Prior to SEPA becoming prevalent, I've witnessed it done with an id and credit check together with a decent sized deposit via debit/credit card (~€10K). Balance wired using SWIFT or TARGET2 within 72 hours of driving away. You have to swallow the card processing fees though.

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

#319

Post by toss1 »

chii wrote: post #188
toss1 wrote: post #165

Earlier quoted context omitted.

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 unders…

Deflationary problems seems to me a overblown issue, and the cure may be worse than the disease. Inflation prevents low income earners from saving, but they aren't in a position to take risk and invest. Therefore, it causes their networth to drop in relation to the wealthy (who can take risks to keep up by investing). Inflation also keep wages down, as it's easier to pay the same wage , and any increase must be above…

Of course transient deflation can be a good thing. Adn deflation as we are now accustomed in the tech industry is a very good thing - it is caused by an increase in the quality/supply of available goods, rather than a decrease in the money supply.

However a deflationary spiral of declining money supply (usually created by destruction of value), where labor utilization & wages decline makes things much harder for ordinary people.

That said, I'd like to note the the above answer was to a question about what is bad about deflation. The good thing about deflation may be that it tends to be followed by increasing growth, possibly in no small part because central banks try to do something about it.

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

#320

Post by bilekas »

barrkel wrote: post #60
bilekas wrote: post #35

Earlier quoted context omitted.

I really hate this idea that everyone needs to just constantly be spending. It's useful but there is nothing wrong with having a slow stable fincal conscious ecconomy.

Do you object to people being employed, being productive, and creating value? Because the way you get that is by spending on it.

This is a really dangerous fallacy.. If you genuinely believe this then you don't even have the economic high-ground.

But a small high level lesson is clearly due, just in-case you attract people who aren't sure.

I can only comment democratic government, so: The government is not responsible for your individual job, your employer is, a government is responsible to make sure you have access to a job, or the ability to create one. After 1 of those requirements has been passed, you pay tax to ensure others can do the same.

Another responsibility of the government is to ensure that the pensions are looked after, probably one of the biggest these days thanks to 'boomers', but they are none the less responsible for it. Thats why the retirement age is decided by government.

Another one they need to look after, trade options, within Europe we're quite lucky, we have a free trade and have all round standards of what we can trade.

Another is infrastructure, if I want to trade a lot, I need infrastructure, if I have a lot of savings; for the people, I will invest in that, thus contributing to all the above.

So: Your question is a joke I guess, mainly because you don't back anything up by your claims.

If you think all you said, lay it out, lets discuss, maybe I'm wrong.

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