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I don't think it's a revelation that lots of ultra wealthy people hide money in offshore bank accounts, as well as other means. I'd say many of them are litera

I don't think it's a revelation that lots of ultra wealthy people hide money in offshore bank accounts, as well as other means. I'd say many of them are literally hoarding it.

missedthecue 6y ago
If it's in a bank account, it's not being hoarded. It's being loaned out and the people who get the loans are spending it on houses, businesses, automobiles, etc...
- dctoedt 6y ago
  > If it's in a bank account, it's not being hoarded. It's being loaned out and the people who get the loans are spending it on houses, businesses, automobiles, etc. This presupposes banks actually loan it out — which doesn't always happen, for example if lending officers are gun-shy or underwriting policies get too tight because senior management is gun-shy.
  - missedthecue 6y ago
    Banks aren't charities. It costs a good bit of money to keep deposits, on top of the interest expense. (deposit insurance, overhead, staff, etc...) I think it's highly unlikely that these overseas banks that the rich use are doing nothing but sitting on their money and this practice accounts for all the purported "hoarding".
    - dctoedt 6y ago
      From the St. Louis Federal Reserve: "Lending growth slowed to zero during the 1990-91 and 2001 recessions but recovered after a few quarters. In contrast, during the Great Recession (2007-09), loan growth became strongly negative and remained so for almost four years." https://research.stlouisfed.org/publications/economic-synopses/2016/02/05/bank-lending-during-recessions https://research.stlouisfed.org/publications/economic-synops...
      - missedthecue 6y ago
        Yes, I understand that the growth of new loan originations experiences vicissitudes based on general economic conditions. That's not my point. My point is that loan growth slowing is not the rich hoarding all the money. They don't hoard. Hoarding is not only unprofitable, it costs money.

I don't think it's a revelation that lots of ultra wealthy people hide money in offshore bank accounts, as well as other means. I'd say many of them are literally hoarding it.

missedthecue 6y ago

If it's in a bank account, it's not being hoarded. It's being loaned out and the people who get the loans are spending it on houses, businesses, automobiles, etc...

dctoedt 6y ago
> If it's in a bank account, it's not being hoarded. It's being loaned out and the people who get the loans are spending it on houses, businesses, automobiles, etc. This presupposes banks actually loan it out — which doesn't always happen, for example if lending officers are gun-shy or underwriting policies get too tight because senior management is gun-shy.
- missedthecue 6y ago
  Banks aren't charities. It costs a good bit of money to keep deposits, on top of the interest expense. (deposit insurance, overhead, staff, etc...) I think it's highly unlikely that these overseas banks that the rich use are doing nothing but sitting on their money and this practice accounts for all the purported "hoarding".
  - dctoedt 6y ago
    From the St. Louis Federal Reserve: "Lending growth slowed to zero during the 1990-91 and 2001 recessions but recovered after a few quarters. In contrast, during the Great Recession (2007-09), loan growth became strongly negative and remained so for almost four years." https://research.stlouisfed.org/publications/economic-synopses/2016/02/05/bank-lending-during-recessions https://research.stlouisfed.org/publications/economic-synops...
    - missedthecue 6y ago
      Yes, I understand that the growth of new loan originations experiences vicissitudes based on general economic conditions. That's not my point. My point is that loan growth slowing is not the rich hoarding all the money. They don't hoard. Hoarding is not only unprofitable, it costs money.