It's basically impossible to do any financial transactions in Switzerland as an American. Even something as mundane as opening a bank account to receive your salary is extremely complicated as most banks refuse to do business with Americans. A lot of Americans there renounced their citizenship because of this.
That's due to American regulations. If any American has an account at your bank, they can audit your whole bank. So now there are banks that will never take an American customer, and banks that specialize in Americans.
Their money is being used to make investments and they're getting paid interest for it. If their deposit was above the amount insured by the FDIC then they knew it could all be lost if the bank collapsed. I wouldn't call lending more than 250k to a bank "cautious" (that's what you do when you "deposit" your money in a bank), they could have bought Treasury bonds instead. But maybe they were smart and had guessed that…
It kinda depends on scale doesn't it? For an individual 250k in cash seems like a lot (although can easily happen just before or just after a large purchase.) For even a "small" business though it's quite small. We're small ( In this context 250k is tiny, and wouldn't cover our day to day balance.
I guess you'll have to wait for The Narrow Bank to become operational. In the meantime the best you can do is lend your money to an institution that is too big to fail.
here is my take: interest rates are already where they used to be in 2008, that would imply that people have a hard time paying back their mortgages. Trouble with housing would imply that real trouble is somewhere around the corner.
The fact that they publish this in the first place, is worrying, to say the least. It's also quite true - the banking crisis won't be a repeat of 2008. But, unlike 2008 which was fairly limited to (arguably huge) banking and residential mortgage sectors, this crisis will hit hard everywhere - valuations are still insane, the % of zombie companies is off the charts, inflation is everywhere, FED and governments have mu…
I am curious, but with all the national debt in western economies, will higher inflation help service that debt going forwards? I mean, prices rarely ever come back down... Combined with higher tax incomes, seems like a kinda win-win for the governments? Or is this a follow on from recent currency wars, if that is appropriate phrasing? I dont know much about world finance, at least not enough to have sold CS in time. I never imagined such a long standing institution, in such a conservative country could have fallen. That will teach me to avoid the news! (apart from this site of course!)
The yuan has capital controls. You can't move money freely in and out of China even (especially) if you're a Chinese national. Absolute non-starter for any kind of reserve currency idea.
For now . China has been actively working on making the yuan a world reserve currency [1], including relaxing the controls if it is adventageous. [1] https://finance.yahoo.com/news/putin-strengthening-yuan-role...
That would require a wholesale change in the way the Chinese government wields it power.
Money flees China now despite the capital controls.
Even the Chinese would rather keep their money in Singapore, Switzerland or the US than at home.
I'm not sure how you reconcile acknowledging the reality of companies not being able to make payroll for two weeks and also calling it a "canard" in back to back sentences. A "fake canard" would be a double negative by the way ;) If you reread the thread and the context of what I was responding to it was the OP stating "It's not clear anyone would have lost anything at all ..." Perhaps you are well-off but losing a p…
> Perhaps you are well-off but losing a pay check for couple of weeks has real consequences for lots of people. They're arguing that companies could already make payroll just fine with access to half their balance. A 100% guarantee was not necessary.
If your payroll plus all other outgoing expenses was greater than $250K then no you would not be able to "make payroll just fine." This is simple math. Arguing against basic math is absurd.
The yuan may be the competition we should fear. Since we disconnected Russia from our financial systems, Russia is willing to do business with our biggest rival, China, in their currency.
Well, what do you expect? The US over the past several decades has effectively crippled economies for its own interests by cutting off USD access. When you do this to a non-trivial number of countries they get around it by trading among themselves and dumping the USD for their own currencies. There are many countries including India, Japan, Korea, China, Russia, etc who are opening up bilateral or trilateral agreemen…
Im not sure you understand what reserve currency means.
When Korea buys something from Japan, they don’t have to pay in USD. They can use whatever currency they want.
I would argue the perceived haphazardness is an advantage. The more centrally planned the economy, the more likely an incompetent government takes power and mucks it up. Part of America’s genius is the (fairly) restricted powers and decentralized nature of responsibility.
Is this why the US financial system blows up so regularly?
Asian financial crisis? Euro crisis? It’s not unique to the US.