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Thinking this through, as a rational economic actor. You won't save cash in a bank, it's literally better to put it in a safe. You won't buy a productive asse
by lumost 6y ago
Thinking this through, as a rational economic actor.
You won't save cash in a bank, it's literally better to put it in a safe.
You won't buy a productive asset, that'll just lose value as more people buy the same asset - lowering the value of the goods it produces.
Which pretty much leaves assets that are inelastic to demand e.g. housing, stocks, art, unique jewelry etc.
- DangerousPie 6y agoYes, the whole point of these ultra-low interest rates is to increase spending.
- Traster 6y agoAs a rational actor, all returns are the same when adjusted for risk, so you continue to stick your emergency savings in the bank, and diversify your less immediate investments. As a real investor you're probably just going to flee domestic investments in favour of the returns of the S&P500.
- CaptainNegative 6y agoAll returns in the space of rational strategies* are the same when adjusted for risk, which is tightly related to those vehicles subject to classical market forces. A lit oven is not a particularly great place to stash your cash, even on a risk-adjusted basis. I don't know the particulars of the situation in Denmark, but they could be intentionally making savings an irrational decision so that rational money flows elsewhere.
- gruez 6y ago>You won't save cash in a bank, it's literally better to put it in a safe. That costs money too. You need a safe, space to put the safe, and bear the risk of the safe getting robbed. Sometimes paying 0.75% might be worth the hassle.
- josh_fyi 6y agoBurglars can crack or steal safes. I wouldn't keep my life savings in one.
- BelenusMordred 6y agoYou can get a safe deposit box holding 10kg for a few hundred dollars in Australia, I would assume it's cheaper elsewhere. Seems like a terrible deal unless for for small amounts of money.
- suifbwish 6y agoOr you could buy stakable cryptocurrencies with it and earn 15-60% APR. The price might fluctuate but unless crypto completely tanks all around it’s going back up. Also it’s way more secure than hiding it in a safe because it’s cryptographically protected. If you put in a safe you might as well put it in a chest and make a map of where you buried it because it’s going to be making you just as much money that way.
- imtringued 6y agoThe type of person that considers getting a safe for cash isn't looking at cryptocurrencies.
- suifbwish 6y agoI have a bad habit of trying to suggest a solution when I hear people complaining about something that’s avoidable.
- colechristensen 6y agoAlternatively you won't save as much and spend more on things without future monetary value (experiences, services, etc)
- pharke 6y agoIf this impacts the psychology of people saving money, it's just as likely to prompt them to save more. It's not like we're saving our money just for the sake of having a big number on our accounts. We usually have specific goals in mind such as large investments, funding a business, moving, home ownership, early retirement, etc. It's also making precious metals seem a lot more appealing despite their inconvenience.
- imtringued 6y agoThis is true, if you lose 25€ per year, you will just save 25€ per year more, which actually makes the problem worse.
- neilwilson 6y ago"Which pretty much leaves assets that are inelastic to demand e.g. housing, stocks, art, unique jewelry etc." Which is a fallacy of composition because whoever is selling you the house etc, ends up with the same choice. Assets always reach their indifference level, and some bank somewhere has to end up holding the reserves the Central Bank has created. Good job people aren't rational isn't it.