Negative interest rates and what it means
May 2nd, 2016 at 10:53:32 AM permalink | |
Evenbob Member since: Oct 24, 2012 Threads: 146 Posts: 25013 |
My grandparents had no money except coins until they left the farm in 1945. They had no need for money except to buy coffee, sugar, and cloth to make clothes. Right now I'm wearing a ring my grandfather made out of a silver dollar in 1910. Melted it and poured it in a mold. I've had it on for 50 years this year. If you take a risk, you may lose. If you never take a risk, you will always lose. |
May 2nd, 2016 at 8:08:54 PM permalink | |
Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 |
They have these inflation calculators that say $1 in 1930 would be worth $14 today, but I don't think that captures the true differences in cash. According to records, the total value of banknotes circulating pre WWII was Federal Reserve United States Notes 1928 $1.626 billion $298 million 1940 $5.163 billion $248 million So the total of those high denomination $500, $1000, $5000, $10000 banknotes from the 1928, 1934, and 1934A series was $5.57 billion. A considerable sum compared to the total amount of cash in circulation. But in 1930 the total population was 122,775,046, so you are talking about less than $20 per person. Since NYC, Philadelphia, Chicago and Detroit must have needed a fair amount of cash to function that basically leaves not much more than coins for rural America. So even though inflation factors are 14:1 the tiny amount of cash indicates that most people made no cash transactions during an ordinary day. Federal Reserve Notes in circulation jumped from $6.68 billion to $22.87 billion from end of 1941 to end of 1945 when the wartime economy kicked in and the federal government went into massive deficit spending. |
May 2nd, 2016 at 11:21:18 PM permalink | |
Evenbob Member since: Oct 24, 2012 Threads: 146 Posts: 25013 |
In 1959 there was a Tony Randall movie called The Mating Game. He plays an IRS agent who audits a farm family, but they have no income. They're self sufficient and barter for what they can't produce. It was a way of life that was gone, but it hadn't been gone long enough that the audience couldn't relate to it. A funny movie with a to die for Debbie Reynolds. If you take a risk, you may lose. If you never take a risk, you will always lose. |
May 3rd, 2016 at 12:05:00 AM permalink | |
Fleastiff Member since: Oct 27, 2012 Threads: 62 Posts: 7831 | Barter was a way of life since there was so little "cash money" in circulation in rural areas. Tobacco was often sold for cash but otherwise what little was bought was bartered. Consider the Amish buggy.... repaired dozens of times, but acquired only once. One white house speechwriter found himself slapped with a one hundred percent IRS lien, so he learned to weld and to live by barter. |
May 3rd, 2016 at 2:41:02 AM permalink | |
AZDuffman Member since: Oct 24, 2012 Threads: 135 Posts: 18265 |
What you have to remember about these large notes is what they were used for. Most people never saw them, but they were needed for large, legit transactions between corporations and the banks that they used. When I worked at Chase, one branch still had a $10,000 bill in the vault. Because Chase was on it, they took it to the corporate office. The branch manager said he was very glad to be rid of it because they had to balance it monthly for years and years. The President is a fink. |
May 4th, 2016 at 2:43:18 PM permalink | |
AZDuffman Member since: Oct 24, 2012 Threads: 135 Posts: 18265 | War on cash continues as E$500 note to be discontinued. The President is a fink. |
May 5th, 2016 at 4:28:38 AM permalink | |
odiousgambit Member since: Oct 28, 2012 Threads: 154 Posts: 5132 | nope, but this works http://www.nytimes.com/2016/05/05/business/international/ecb-to-remove-500-bill-the-bin-laden-bank-note-criminals.html?_r=0]War%20on%20cash%20continues%20as%20E$500%20note%20to%20be%20discontinued not sure why it doesn't hyperlink authorities cite convenience to criminals, but are mum on forcing transaction transparency to tax officials I'm Still Standing, Yeah, Yeah, Yeah [it's an old guy chant for me] |
May 5th, 2016 at 6:51:27 AM permalink | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 |
The Euro Area has a fairly high percentage of cash to GDP ratio. Not nearly as high as Asia, but high compared to the USA. The USA is 7.74%, but that is broken up into 5.85% for the $100 bills, and 1.89% for all other banknote denominations and coins. Eurozone is 10.31%, but that is broken up into 2.99% for the 500 Euro bills, and 7.32% for all other banknote denominations and coins. Even without tax enforcement considerations, governments don't like to see people keeping too much wealth in cash, as it doesn't circulate.
Since the end of 2014 Sweden keeps dropping it's cash supply and is now around 1.5% . IMHO they will stop at around 1%. To go much lower will severely impact some of the very old, the rural people, and the children too young to legally use some of the phone apps. |
May 5th, 2016 at 10:33:42 AM permalink | |
DRich Member since: Oct 24, 2012 Threads: 51 Posts: 4977 | I don't know how commonly used 100 pound notes are in the U.K. but when I picked up some Pounds from my bank today the biggest they had was 50 Pound notes. At my age a Life In Prison sentence is not much of a detrrent. |
May 5th, 2016 at 1:25:23 PM permalink | |
TheCesspit Member since: Oct 24, 2012 Threads: 23 Posts: 1929 |
I'm not sure I've ever seen a 100 pound note. Oh, this is why: £100 notes, in white, appeared in 1725 and continued to be issued until 1943. They ceased to be legal tender in 1945.(wikipedia) Fifties are not universally accepted, some people don't like taking them. There were two types of people who used fifties: builders and bookmakers. Most other people would pay in stacks of 20's. I always try to get twenties when I go over there. It is said that your life flashes before your eyes just before you die.... it's called Life |