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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

#91

Post by jldugger »

blazespin wrote: post #90
jldugger wrote: post #86

Earlier quoted context omitted.

What an absurd position. First off, risk isn't the goal, reward is. Risk is just the price of increasing rewards. But we shouldn't mistake the two, or valorize risk itself. Any high risk business not taking risk mitigations available to it is a poor one. And any investor who isn't using low risk, uncorrelated assets to juice their returns is missing out! Secondly. Bonds are not assets that "do nothing for no one;" th…

Not true. The government sells bonds to suck money out of the economy, and buys them back to add more. How the fed operates. Inflation is like ante at a poker game. Without the ante, everybody would just keep folding until they get the nuts and there would be no action.

> The government sells bonds

Well, it's how the FOMC operates. There's plenty of state and local bonds issued that match the model. But if you want to play the #notallbonds card, be my guest.

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

#92

Post by Bombthecat »

jfengel wrote: post #58
OscarCunningham wrote: post #43

Can someone explain to me why central banks find it so hard to create inflation? It seems to me that the difficult direction should be convincing people that your currency is worth something. Making your currency lose value should be easy, shouldn't it? If Google wanted to tank their share price they would have no problems.

Usually, fear. People hoard cash when they're afraid of a crash. When a crash happens, money becomes more valuable, so they can buy things more cheaply. People who anticipate a crash risk provoking one by removing money from the supply. So central banks try to counter that: "Your money will be worth less in the future, so spend it now. Or make an investment that will produce returns greater than the rate of inflation…

My tip is 5 to 6 years.

But who knows?

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

#93

Post by Despegar »

growlist wrote: post #77
Despegar wrote: post #59

Earlier quoted context omitted.

And I really hate the moralizing as if the national economy needs to be run like a household budget.

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

This extremely poor misunderstanding of macroeconomics is likely to lead to the outcome you're supposedly trying to avoid.

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

#94

Post by jfengel »

Bombthecat wrote: post #92
jfengel wrote: post #58

Earlier quoted context omitted.

Usually, fear. People hoard cash when they're afraid of a crash. When a crash happens, money becomes more valuable, so they can buy things more cheaply. People who anticipate a crash risk provoking one by removing money from the supply. So central banks try to counter that: "Your money will be worth less in the future, so spend it now. Or make an investment that will produce returns greater than the rate of inflation…

My tip is 5 to 6 years. But who knows?

That's what I said... ten years ago. So we all know what my opinion is worth.

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

#95

Post by vkou »

njarboe wrote: post #85
SilasX wrote: post #45

Earlier quoted context omitted.

Heh, yep, like to joke that $100 feels like a lot of money whenever you try to spend a $100 bill. I can barely fathom what it's like trying to pass a 500 EUR note.

If you spend time in casinos, $100 notes flow around like water.

Casinos are also a hotbed of money laundering.

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

#96

Post by hirsin »

xenonite wrote: post #28
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)

It seems the CHF 1000 note has the highest value among all.

Good luck using one though in Brazil or Vietnam - they're illiquid relative to euros or dollars and therefore harder to launder.

"widely used currencies" can be read as "usd, eur, jpy, cny, gbp, cad", although chf is up there it seems.

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

#97

Post by Symbiote »

timlin wrote: post #82
idiocratic wrote: post #47

Earlier quoted context omitted.

In many countries in Europe you can't use cash for large sums. We generally use bank transfers to buy cars.

I'm genuinely curious. Do you need to go to a physical bank location to do this? How do you buy a car in the evening or a Saturday afternoon, when a bank is closed?

In the UK, and probably most places in Europe, with a debit card.

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

#98

Post by tiku »

MrRadar wrote: post #34
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.

Why couldn't you use a cashier's check?

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

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

#99

Post by marcoseliziario »

timlin wrote: post #82
idiocratic wrote: post #47

Earlier quoted context omitted.

In many countries in Europe you can't use cash for large sums. We generally use bank transfers to buy cars.

I'm genuinely curious. Do you need to go to a physical bank location to do this? How do you buy a car in the evening or a Saturday afternoon, when a bank is closed?

The same thing here in Brasil since 2002. The only difference that there is an artificial restriction that online transfer between banks outside of banking hours will only clear when the banks open again. Other than that most transfer between banks clear in seconds and can be made from your phone. This artificial restriction is probably going to be lifted this year. And of course, if seller and buyer have accounts in the same bank, there's no business hours requirement, it will clear in seconds not matter what the time of the day. Also, depending on the american bank, I usually am able to cash wire transfers coming from the US in the same day, if the american bank sent the wire during brazilian business hours. Everytime I deal with the American banking system I get appaled by its primitiveness. ACH is basically how banking technology worked on the early 90's in Brasil.

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

#100

Post by 40acres »

OscarCunningham wrote: post #43

Can someone explain to me why central banks find it so hard to create inflation? It seems to me that the difficult direction should be convincing people that your currency is worth something. Making your currency lose value should be easy, shouldn't it? If Google wanted to tank their share price they would have no problems.

Because central banks don't direct how the money is spent. The central bank puts money into the system but it's up to fiscal policy makers to determine flows -- in the US laws lead to inflation in asset prices.
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