4 ms·

Cash is money. Cash is immune to bank runs. If you have $10,000, then you have $10,000. If you deposit $10,000 in a bank, then you have $0 and a promise from

Cash is money. Cash is immune to bank runs. If you have $10,000, then you have $10,000. If you deposit $10,000 in a bank, then you have $0 and a promise from a bank that has $1,000 and a promise (from somebody else) for $9,000.

mdrzn 3y ago
So maybe we should fix fractional reserve instead of having an issue against cash? I would rather pay $10k with a bank transfer than having to carry that much on me.
- ClarityJones 3y ago
  Yes, fractional reserve banking should be reformed, and that's a reasonable preference. However, my point is that it's also reasonable for people to want to have physical possession of their assets.
- totony 3y ago
  What if the bank doesn't allow you to make that transaction? How much delay are you willing to accept? Fees?
Scarblac 3y ago
Government insures personal bank accounts up to 100k euro. You have your 10k.
- deleted 3y ago
  [deleted]
volent 3y ago
That is not true in most of Europe. Money you deposit in a bank is guaranteed by the state up to a certain limit (often 100 000€ per person per bank). Source (french) : https://www.ecb.europa.eu/ecb/educational/explainers/tell-me-more/html/deposit_guarantee.fr.html https://www.ecb.europa.eu/ecb/educational/explainers/tell-me... > Selon la réglementation européenne, ces systèmes assurent 100 000 euros par déposant. > (DeepL) According to European regulations, these systems guarantee 100,000 euros per depositor.
- ClarityJones 3y ago
  A guarantee is just another promise. So, you have a promise from the bank and a promise from the government.
cesarb 3y ago
> Cash is money. Cash is immune to bank runs. > If you have $10,000 then you have $10,000. Playing devil's advocate: that's as long as the denomination doesn't change. Once it changes (for instance Cr$ -> NCr$ -> Cz$‎ -> NCz$‎ -> Cr$‎ -> CR$‎ -> R$, and I lived through most of these changes), and you're outside of a conversion grace period (when you can take your cash to a bank and exchange it for new notes), your cash is worthless; if I find an old Cr$ bill stashed somewhere (I probably still have some), they're not worth much more than the paper they're printed on. If your money is in a bank, on the other hand, it will always be converted automatically and transparently. (On the other hand, I also lived through the infamous "confisco da poupança" which froze most of the money in everyone's bank accounts, so I can clearly see the importance of having money outside of the reach of banks. On a third hand, I also lived through the hyperinflation times, and know that having too much of your money not deposited in an interest-bearing bank account or other similarly good investment means it will lose its value quickly.)

mdrzn 3y ago

So maybe we should fix fractional reserve instead of having an issue against cash? I would rather pay $10k with a bank transfer than having to carry that much on me.

ClarityJones 3y ago
Yes, fractional reserve banking should be reformed, and that's a reasonable preference. However, my point is that it's also reasonable for people to want to have physical possession of their assets.
totony 3y ago
What if the bank doesn't allow you to make that transaction? How much delay are you willing to accept? Fees?

Scarblac 3y ago

Government insures personal bank accounts up to 100k euro. You have your 10k.

deleted 3y ago
[deleted]

volent 3y ago

That is not true in most of Europe. Money you deposit in a bank is guaranteed by the state up to a certain limit (often 100 000€ per person per bank). Source (french) : https://www.ecb.europa.eu/ecb/educational/explainers/tell-me-more/html/deposit_guarantee.fr.html https://www.ecb.europa.eu/ecb/educational/explainers/tell-me... > Selon la réglementation européenne, ces systèmes assurent 100 000 euros par déposant. > (DeepL) According to European regulations, these systems guarantee 100,000 euros per depositor.

ClarityJones 3y ago
A guarantee is just another promise. So, you have a promise from the bank and a promise from the government.

cesarb 3y ago

> Cash is money. Cash is immune to bank runs. > If you have $10,000 then you have $10,000. Playing devil's advocate: that's as long as the denomination doesn't change. Once it changes (for instance Cr$ -> NCr$ -> Cz$‎ -> NCz$‎ -> Cr$‎ -> CR$‎ -> R$, and I lived through most of these changes), and you're outside of a conversion grace period (when you can take your cash to a bank and exchange it for new notes), your cash is worthless; if I find an old Cr$ bill stashed somewhere (I probably still have some), they're not worth much more than the paper they're printed on. If your money is in a bank, on the other hand, it will always be converted automatically and transparently. (On the other hand, I also lived through the infamous "confisco da poupança" which froze most of the money in everyone's bank accounts, so I can clearly see the importance of having money outside of the reach of banks. On a third hand, I also lived through the hyperinflation times, and know that having too much of your money not deposited in an interest-bearing bank account or other similarly good investment means it will lose its value quickly.)