Something economists thought was impossible is happening in Europe

[Togo]

Um... people have been predicting negative interest rates for a while. We've had technically negative interest before, albeit briefly. The threat of negative rates is why there is more QE set to take place, despite German objections.

 

[Jimmy Higgins]

It's not doing nothing that's better, it's holding cash. Some people just don't have a mattress big enough to hold $100 million I guess.

But why not hold the money in the safest German or Swiss bank account? Are people really fearful that the most solid German or Swiss banks will fail?

Where the heck were you in the spring/summer/fall of 2008? Almost every major American bank / investment bank failed.

If there's, let's say, a deflation rate of -1.9% and you can buy bonds with a negative interest rate of -1.2% then you've saved 0.7% of your purchasing power.

No, you haven't.

$100 in cash after a year: $100
$100 with negative 2% interest after a year: $98

This is the case no matter what happens to prices in the meantime. $100 buys more goods than $98.

The key word there is "cash". Very rich people and massive institutions don't have large amounts of cash laying around.

 

[dismal]

The key word there is "cash". Very rich people and massive institutions don't have large amounts of cash laying around.

In theory you could have those pallets of $100 bills lying about but you'd have to incur costs to assemble and defend them. Most large institutions aren't really set up to do this so they would take a little interest rate ding before trying.

The government does not make it easy. They used to make much larger denominations back when money was actually worth something. A $100,000 bill from the 1930s is equivalent to about a $1.8 million bill or so today.

Plus they have this nasty habit of confiscating large amounts of cash when they find it.

 

[Nice Squirrel]

The government does not make it easy. They used to make much larger denominations back when money was actually worth something. A $100,000 bill from the 1930s is equivalent to about a $1.8 million bill or so today.

I want you to fully source this, because I do know the answer and want to watch the squirm fest.

 

[dismal]

The government does not make it easy. They used to make much larger denominations back when money was actually worth something. A $100,000 bill from the 1930s is equivalent to about a $1.8 million bill or so today.

I want you to fully source this, because I do know the answer and want to watch the squirm fest.

Fully source what? That the government does not print $1.8 million dollar bills today?

 

[Nice Squirrel]

I want you to fully source this, because I do know the answer and want to watch the squirm fest.

Fully source what? That the government does not print $1.8 million dollar bills today?

Please post the price of the last $100,00 bill sold and provide your source.

 

[dismal]

Fully source what? That the government does not print $1.8 million dollar bills today?

Please post the price of the last $100,00 bill sold and provide your source.

The $1.8 million is the current value of $100,000 based on the change in CPI (aka inflation) since 1934.

Source:

http://www.usinflationcalculator.com/

 

[Nice Squirrel]

Please post the price of the last $100,00 bill sold and provide your source.

The $1.8 million is the current value of $100,000 based on the change in CPI (aka inflation) since 1934.

Source:

http://www.usinflationcalculator.com/

You were talking about large denomination printed currency prices. Now you are talking about a weird deflationary spiral that never occurred. That the $100,000 bill today could buy $1.8 million in goods and services today.

Had enough?

 

[dismal]

The $1.8 million is the current value of $100,000 based on the change in CPI (aka inflation) since 1934.

Source:

http://www.usinflationcalculator.com/

You were talking about large denomination printed currency prices. Now you are talking about a weird deflationary spiral that never occurred. That the $100,000 bill today could buy $1.8 million in goods and services today.

Had enough?

WTF?

I said a $100,000 bill in 1934 would be the equivalent of a $1.8 million bill today due to inflation. This is a simple verifiable uncontroversial claim, which I have now in fact verified for you.

And, my point is certainly true regardless. If the government did print $1.8 million dollar bills it would be easier to store large amounts of money in cash than it is with the current the max denomination of $100.

 

[Nice Squirrel]

So now that you've clarified that a $100,000 bill is not worth $1.8 million.

Now explain to me why if "money was actually worth something" they print larger bills.

(There is a practical reason we only circulate up to $100 bills today. None of this is related to the value.)

 

[dismal]

So now that you've clarified that a $100,000 bill is not worth $1.8 million.

Now explain to me why if "money was actually worth something" they print larger bills.

(There is a practical reason we only circulate up to $100 bills today. None of this is related to the value.)

I made a what I thought was a relatively straightforward and coherent comment about bill denominations and inflation since the 1930s which I think I have now explained multiple times.

You are responsible for fighting whatever other hobgoblins you are imagining I said on your own.

 

[Nice Squirrel]

So now that you've clarified that a $100,000 bill is not worth $1.8 million.

Now explain to me why if "money was actually worth something" they print larger bills.

(There is a practical reason we only circulate up to $100 bills today. None of this is related to the value.)

I made a what I thought was a relatively straightforward and coherent comment about bill denominations and inflation since the 1930s which I think I have now explained multiple times.

You are responsible for fighting whatever other hobgoblins you are imagining I said on your own.

So you looked it up and you now know why large denomination bills are no longer produced and that a $100,000 bill (if actually allowed into circulation) would not be worth $1.8 million today. You also learned that you must be clear and not just make stuff up.

 

[dismal]

I made a what I thought was a relatively straightforward and coherent comment about bill denominations and inflation since the 1930s which I think I have now explained multiple times.

You are responsible for fighting whatever other hobgoblins you are imagining I said on your own.

So you looked it up and you now know why large denomination bills are no longer produced and that a $100,000 bill (if actually allowed into circulation) would not be worth $1.8 million today. You also learned that you must be clear and not just make stuff up.

You can go read what I actually did say. It's still there. It wasn't even a particularly complicated, challenging or controversial thing I said.

It's quite commonplace to use CPI to translate a nominal dollar value at time X to a nominal dollar value in time Y.

 

[ksen]

So you looked it up and you now know why large denomination bills are no longer produced and that a $100,000 bill (if actually allowed into circulation) would not be worth $1.8 million today. You also learned that you must be clear and not just make stuff up.

You can go read what I actually did say. It's still there. It wasn't even a particularly complicated, challenging or controversial thing I said.

It's quite commonplace to use CPI to translate a nominal dollar value at time X to a nominal dollar value in time Y.

Nominal value, sure but not face value.

 

[Nice Squirrel]

So you looked it up and you now know why large denomination bills are no longer produced and that a $100,000 bill (if actually allowed into circulation) would not be worth $1.8 million today. You also learned that you must be clear and not just make stuff up.

You can go read what I actually did say. It's still there. It wasn't even a particularly complicated, challenging or controversial thing I said.

Keep squirming.

 

[dismal]

You can go read what I actually did say. It's still there. It wasn't even a particularly complicated, challenging or controversial thing I said.

Keep squirming.

I think I'll just leave you and the other you to debate this with yourselves.

 

[funinspace]

The key word there is "cash". Very rich people and massive institutions don't have large amounts of cash laying around.

In theory you could have those pallets of $100 bills lying about but you'd have to incur costs to assemble and defend them. Most large institutions aren't really set up to do this so they would take a little interest rate ding before trying.

The government does not make it easy. They used to make much larger denominations back when money was actually worth something. A $100,000 bill from the 1930s is equivalent to about a $1.8 million bill or so today.

Plus they have this nasty habit of confiscating large amounts of cash when they find it.

Yeah, but to be fair, I thought those $100k gold certificates were only traded between Federal Reserve banks?

Though one could use $10,000, $1,000, and $500 bills until Tricky Dick started taking them away in 1969... A money belt, or a small safe deposit box, sure could hold a lot stuffed full of $10k bills.

 

[tupac chopra]

It will al be ok once economic growth kicks in......it is going to kick in isn't it?

Western governments spend more than the collect so, well, they need negative interest rates.

 

[dismal]

In theory you could have those pallets of $100 bills lying about but you'd have to incur costs to assemble and defend them. Most large institutions aren't really set up to do this so they would take a little interest rate ding before trying.

The government does not make it easy. They used to make much larger denominations back when money was actually worth something. A $100,000 bill from the 1930s is equivalent to about a $1.8 million bill or so today.

Plus they have this nasty habit of confiscating large amounts of cash when they find it.

Yeah, but to be fair, I thought those $100k gold certificates were only traded between Federal Reserve banks?

Though one could use $10,000, $1,000, and $500 bills until Tricky Dick started taking them away in 1969... A money belt, or a small safe deposit box, sure could hold a lot stuffed full of $10k bills.

Yeah, the point was that the denominations were a lot bigger and the dollar was worth a lot more. But that was a controversial statement apparently.

 

[funinspace]

Yeah, but to be fair, I thought those $100k gold certificates were only traded between Federal Reserve banks?

Though one could use $10,000, $1,000, and $500 bills until Tricky Dick started taking them away in 1969... A money belt, or a small safe deposit box, sure could hold a lot stuffed full of $10k bills.

Yeah, the point was that the denominations were a lot bigger and the dollar was worth a lot more. But that was a controversial statement apparently.

Well, besides the quibbling.... Sure, my dad (if he had them) could have bought his house in 1962, with just 2 of those $10k bills, and would have gotten several $1,000 bills in change. Could have been fun.

I know of a guy, who in the early 1990's bought a Camry with cash (literally), but it took a good sized wad of green paper. Yeah, the dealership freaked out too....