6 ms·

Only An Idiot Would Rob a Bank: How Inflation Deflated the Stick-Up

48 points by 001sky 14y ago

carlob 14y ago
Isn't this more of a consequence of the US not changing their money for a very long time. I remember as a kid in Italy that the smallest bill wash 1000 ITL (about 50 eurocents) and now the smallest bill is 5 euros, and that is less than the inflation over the 12 years we've had the euro. So by that logic, bank robberies have become more profitable here as of late.
krakensden 14y ago
It's also a different world than the depression. You can't rent a nice apartment, buy a house, or buy a (new) car with cash. If you commit a crime, moving out of town isn't going to help you avoid the police. If you're wanted, you can't safely drive, or have a credit card, or a bank account, or have a home with utilities, or have a job with a reputable employer. That's a hard list of things to give up.
- halviti 14y ago
  You can actually do all of those things with cash. It's not conventional, but people do make all of those purchases with cash.
  - krakensden 14y ago
    You'll notice all the qualifiers in my post- "nice" apartment, "new" car. Any vaguely reputable rental company is going to want a bunch of financial data, that proves you can afford it over the lifetime of the lease. You can't do that with 100 grand in a suitcase. Any new car is going to be over 10k, which means you need to either report the transaction or get a loan from a bank... who is going to want proof you can pay it off. Housing is the same thing. So yes, you can use cash- but you're going to have a hell of a time using cash that doesn't have an obvious, legal source.
- InclinedPlane 14y ago
  You can do all of that with a cashiers check, which you can buy with cash.
  - frugalfirbolg 14y ago
    In the US keep in mind the Bank Secrecy Act. You may trigger a Currency Transaction Report for cash transactions in excess of $10,000 in one day, a Monetary Instrument Log for checks purchased with $3,000 to $10,000, and a Suspicious Activity Report within the bank's discretion. from: http://www.fincen.gov/statutes_regs/bsa/ http://www.fincen.gov/statutes_regs/bsa/ These wouldn't prevent you from making a purchase, and you might falsify information sufficiently to avoid association with your real identity and drawing unwanted attention, but it's another hurdle.
    - gregpilling 14y ago
      Also there are the "Know your Customer" regulations http://en.wikipedia.org/wiki/Know_your_customer http://en.wikipedia.org/wiki/Know_your_customer
- vidarh 14y ago
  I've paid a 10k GBP (~ $16k USD) deposit for an apartment with a cashiers check both mostly with 20 pound notes from the ATM outside the bank branch...(flatshare with only people new to the country, and most of us didn't have UK bank accounts set up or funded yet)
  - krakensden 14y ago
    In the US, any transaction >= 10k must be reported. You can pay cash, but you can't pay cash secretly, like you'd want to with stolen money.
SimianLogic2 14y ago
I was thinking about this the other day from the opposite direction. Seeing the Salvation Army people outside grocery stores with the bells is a little sad now--because of inflation, the value of loose change just keeps going down and down. At the same time, debit/credit cards are obsoleting cash and making the now-less-valuable change even more scarce. At least here in the bay area, I imagine they'd do much better with square readers than a bell and a bucket for change.
- smsm42 14y ago
  If I have to pay cash, I usually just leave the change as a tip or donation (many places have boxes for that). But usually I just use cards and carry no cash - which makes me feel rather bad for some panhandlers I occasionally meet and have literally nothing to give them - I have no cash and credit card is not very useful in such situation. I wonder how that goes further as cash is more and more phased out - will still enough people carry cash or will there be some way to beg money electronically? Readers for Salvation Army would be a nice idea - SA brand gives enough trust that they won't do something nasty with your card, and if you have a credit card you probably can afford some donation. OTOH, the cost of the reading device would probably outweigh the donations, so unless there are some very very cheap readers, not yet.
- pathy 14y ago
  I can't find a source for it right now but I seem to recall some organization like The Red Cross accepting donations by credit cards in Sweden a few years back.
- troels 14y ago
  A lot of charities are moving online, so what they loose from one source, they can recoup from another. The good thing about online/cc is that the giver isn't limited by whatever spare change he has in the pocket.
- sliverstorm 14y ago
  Teenagers tell me panhandling is still very lucrative, just throw on some ratty clothes and you still make 2x minimum wage.
JacobAldridge 14y ago
"Assuming, for simplicity’s sake, that each bill weighs a gram and we average the denominations out to all twenties." Doesn't this assumption negate the point about the weight of the currency? Inflation means that larger notes are now more common - to assume Dillinger had the same portion of twenties as the Lufthansa heist is silly. In the US this has been less the case, but to take Australia for example I remember my grandmother withdrawing cash in $2 and $5 notes. Now (25 years on) the ATMs only dispense $20s and $50s, and the $2 bill hasn't existed since 1988.
- EliRivers 14y ago
  It's very much less the case in the US. There is still the one-dollar bill, which is a ridiculously low value to have a separate banknote for.
  - bunderbunder 14y ago
    My experience in trying to use $1 coins has convinced me that the US probably won't change soon. None of the cash drawers have a space for them. I witnessed more than a little consternation on the part of tellers who couldn't figure out what to do with the money I had just given them. More than that, it means that $1 coins aren't necessarily being given back out as change; easier for the store to just send it back to the bank.
- randallsquared 14y ago
  In the US this has been less the case [...] No kidding. When I was a kid in the 80s, ATMs only seemed to dispense 20s. Now a large percentage of them also dispense 10s. A decade or so ago, I was receiving my paycheck via a Maestro card, which at that time could be used as an ATM card in the US, but not at a POS terminal. This meant that even for larger payments, I had to withdraw a large amount or go to several different ATMs, leading to an embarrassing and stressful situation when I tried to withdraw $1000 from an ATM, which was fine as far as the software was concerned, but jammed the dispensing mechanism. These days I'm not sure any ATM will let you withdraw more than a few hundred. On the other hand, I suppose that most of what people carry cash for is food, and food prices haven't risen in the same fashion that housing and fuel prices have, so the amounts of cash people carry hasn't had to rise that much.
ericfrenkiel 14y ago
this was one of the more entertaining and enlightening articles I've read in a while. It reminds me of the scene in The Dark Knight when the Joker is sitting on a literal mountain of cash. When visualized that way, it's very true that bank robberies no longer make sense.
acd 14y ago
Interest rates are set by central banks, central banks are doing a form of central planning of the price of new money in other words controlling the interest rate. As we know from history of the past central planning works pretty badly for optimal resource allocation. The American Federal reserve is a private institution, founded by members travelling on a secret journey from a train station in New Jersey to a private club on Jekyll Island. There the key elements of the Federal Reserve act was created. On board the train was senator Aldrich, the senators daughter was married to Rockefeller. There was also representatives from Rockefeller and Warburg / Rothschild banking dynasty family. The whole system, seem to be constructed to create as much debt as possible, which channels money upwards in the economic pyramid. See Edward Griffins book the creature from Jekyll island http://www.bigeye.com/griffin.htm http://www.bigeye.com/griffin.htm - The system is flawed
- guelo 14y ago
  Nice conspiracy theories, but have you noticed that every other country also has a central bank even though they didn't have Rockerfellers and Rothschilds? And when you look at the big picture our economy is extremely successful, the envy of the world.
  - technotony 14y ago
    There is an important difference between the Federal Reserve and other central banks which is that the Federal Reserve is privately owned by the banks, whereas in other countries it's owned by the people. Ultimately then, the Federal Reserve is more incentivized to maintain the system than in other countries. One day this may be important.
    - tsiki 14y ago
      Except that the Federal Reserve isn't private, its Board of Governors is nominated by the Senate and the President and its dividents are capped at 6% a year. "Fed is private" is just some crap being pedalled by conspiracy theorists who either don't have the intellectual curiosity to do even cursory fact checking or intentionally spread it to further their agenda.
guelo 14y ago
Interestingly, the US Treasury has resisted calls for larger denominated notes precisely because of criminal concerns. Cops don't want criminal organizations to be able to carry more than a million or two in a suitcase.
- seanmcdirmid 14y ago
  Turns out this is something people want to do in Switzerland. I got a 1000CHF note before at the post office when cashing a check, I was very nervous! I think even the Euro has a 500 note. I really wish I had that in China. Sometimes when paying the landlord, I would need a bag full of 20K RMB, at 100 RMB a note, which is 200 notes. When my landlord wanted bi-yearly rent, it was easier to go to the bank and just do a transfer (electronic banking isn't done in English, unfortunately).
  - jsnell 14y ago
    The 1000 CHF bills are pretty ridiculous (1 CHF =~ 1.1 USD). But they're also in common enough use that you can pay for a relatively small purchase in a supermarket with one, and the cashier won't bat an eye. It'll just be a quick check under a UV light at most.
    - vidarh 14y ago
      Meanwhile, in the UK, most people rarely if ever handle the 50 pound notes that are in circulation - I've only seen perhaps a handful of them in the 12 years I've lived in London.
      - PJones 14y ago
        That's mostly because they're harder to get rid of than Scottish currency. Only the major supermarkets seem to accept them.
loxs 14y ago
"For wage earners this isn’t so much of a problem as long as wages inflate as well (which, well, they haven’t)" This, I think is a bit of an overstatement. Although wages may not have inflated too much, compared to, say gold, they have certainly inflated in terms of quality of life. Prices of personal possessions are extremely low, compared to 50 or 100 years ago, mostly due to "technical progress". 100 years ago a watch was a great luxury - passed down from generation to generation. But today "everybody" owns a smartphone, a computer, a wardrobe full of clothes. Everyone can afford high-caloric food (at least in the "developed world"). Not very much like 100 years ago.
- bmunro 14y ago
  It is probably referring to the fact that income for the bottom 50% of US earners has remained largely stagnant since the 1970s (after accounting for inflation) http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/31/wages-arent-stagnating-theyre-plummeting/ http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/31/w... http://www.newyorker.com/online/blogs/johncassidy/2011/09/poverty-figures.html http://www.newyorker.com/online/blogs/johncassidy/2011/09/po...
  - yummyfajitas 14y ago
    Only because new people entered the country and dragged the median down. http://www.chrisstucchio.com/blog/2011/immigrants_simpsons_paradox_great_stagnation.html http://www.chrisstucchio.com/blog/2011/immigrants_simpsons_p... Consider a nation with Steve (income $50) Bill (income $50) and George (income $100). The median is $50. Now suppose Steve's income remains the same, Bill's goes up to $60, and George's income goes up to $150. The median has gone up to $60, right? However, suppose during this time, Jose (income $30) and Hector (income $40) immigrated. The median is back down to $50 even though every single person saw their income go up. The longitudinal data I link to demonstrates that this is exactly what happened (albeit with different numbers). (Note: this is an argument against drawing conclusions from Simpson's paradox, not an argument against immigration.)
jacques_chester 14y ago
Another reason that the Fed is creating so many new USD is to drive down the value of the USD versus other countries; ie, to make US exports cheaper.

48 points by 001sky 14y ago

Isn't this more of a consequence of the US not changing their money for a very long time. I remember as a kid in Italy that the smallest bill wash 1000 ITL (about 50 eurocents) and now the smallest bill is 5 euros, and that is less than the inflation over the 12 years we've had the euro. So by that logic, bank robberies have become more profitable here as of late.

krakensden 14y ago

It's also a different world than the depression. You can't rent a nice apartment, buy a house, or buy a (new) car with cash. If you commit a crime, moving out of town isn't going to help you avoid the police. If you're wanted, you can't safely drive, or have a credit card, or a bank account, or have a home with utilities, or have a job with a reputable employer. That's a hard list of things to give up.

halviti 14y ago
You can actually do all of those things with cash. It's not conventional, but people do make all of those purchases with cash.
- krakensden 14y ago
  You'll notice all the qualifiers in my post- "nice" apartment, "new" car. Any vaguely reputable rental company is going to want a bunch of financial data, that proves you can afford it over the lifetime of the lease. You can't do that with 100 grand in a suitcase. Any new car is going to be over 10k, which means you need to either report the transaction or get a loan from a bank... who is going to want proof you can pay it off. Housing is the same thing. So yes, you can use cash- but you're going to have a hell of a time using cash that doesn't have an obvious, legal source.
InclinedPlane 14y ago
You can do all of that with a cashiers check, which you can buy with cash.
- frugalfirbolg 14y ago
  In the US keep in mind the Bank Secrecy Act. You may trigger a Currency Transaction Report for cash transactions in excess of $10,000 in one day, a Monetary Instrument Log for checks purchased with $3,000 to $10,000, and a Suspicious Activity Report within the bank's discretion. from: http://www.fincen.gov/statutes_regs/bsa/ http://www.fincen.gov/statutes_regs/bsa/ These wouldn't prevent you from making a purchase, and you might falsify information sufficiently to avoid association with your real identity and drawing unwanted attention, but it's another hurdle.
  - gregpilling 14y ago
    Also there are the "Know your Customer" regulations http://en.wikipedia.org/wiki/Know_your_customer http://en.wikipedia.org/wiki/Know_your_customer
vidarh 14y ago
I've paid a 10k GBP (~ $16k USD) deposit for an apartment with a cashiers check both mostly with 20 pound notes from the ATM outside the bank branch...(flatshare with only people new to the country, and most of us didn't have UK bank accounts set up or funded yet)
- krakensden 14y ago
  In the US, any transaction >= 10k must be reported. You can pay cash, but you can't pay cash secretly, like you'd want to with stolen money.

SimianLogic2 14y ago

I was thinking about this the other day from the opposite direction. Seeing the Salvation Army people outside grocery stores with the bells is a little sad now--because of inflation, the value of loose change just keeps going down and down. At the same time, debit/credit cards are obsoleting cash and making the now-less-valuable change even more scarce. At least here in the bay area, I imagine they'd do much better with square readers than a bell and a bucket for change.

smsm42 14y ago
If I have to pay cash, I usually just leave the change as a tip or donation (many places have boxes for that). But usually I just use cards and carry no cash - which makes me feel rather bad for some panhandlers I occasionally meet and have literally nothing to give them - I have no cash and credit card is not very useful in such situation. I wonder how that goes further as cash is more and more phased out - will still enough people carry cash or will there be some way to beg money electronically? Readers for Salvation Army would be a nice idea - SA brand gives enough trust that they won't do something nasty with your card, and if you have a credit card you probably can afford some donation. OTOH, the cost of the reading device would probably outweigh the donations, so unless there are some very very cheap readers, not yet.
pathy 14y ago
I can't find a source for it right now but I seem to recall some organization like The Red Cross accepting donations by credit cards in Sweden a few years back.
troels 14y ago
A lot of charities are moving online, so what they loose from one source, they can recoup from another. The good thing about online/cc is that the giver isn't limited by whatever spare change he has in the pocket.
sliverstorm 14y ago
Teenagers tell me panhandling is still very lucrative, just throw on some ratty clothes and you still make 2x minimum wage.

JacobAldridge 14y ago

"Assuming, for simplicity’s sake, that each bill weighs a gram and we average the denominations out to all twenties." Doesn't this assumption negate the point about the weight of the currency? Inflation means that larger notes are now more common - to assume Dillinger had the same portion of twenties as the Lufthansa heist is silly. In the US this has been less the case, but to take Australia for example I remember my grandmother withdrawing cash in $2 and $5 notes. Now (25 years on) the ATMs only dispense $20s and $50s, and the $2 bill hasn't existed since 1988.

EliRivers 14y ago
It's very much less the case in the US. There is still the one-dollar bill, which is a ridiculously low value to have a separate banknote for.
- bunderbunder 14y ago
  My experience in trying to use $1 coins has convinced me that the US probably won't change soon. None of the cash drawers have a space for them. I witnessed more than a little consternation on the part of tellers who couldn't figure out what to do with the money I had just given them. More than that, it means that $1 coins aren't necessarily being given back out as change; easier for the store to just send it back to the bank.
randallsquared 14y ago
In the US this has been less the case [...] No kidding. When I was a kid in the 80s, ATMs only seemed to dispense 20s. Now a large percentage of them also dispense 10s. A decade or so ago, I was receiving my paycheck via a Maestro card, which at that time could be used as an ATM card in the US, but not at a POS terminal. This meant that even for larger payments, I had to withdraw a large amount or go to several different ATMs, leading to an embarrassing and stressful situation when I tried to withdraw $1000 from an ATM, which was fine as far as the software was concerned, but jammed the dispensing mechanism. These days I'm not sure any ATM will let you withdraw more than a few hundred. On the other hand, I suppose that most of what people carry cash for is food, and food prices haven't risen in the same fashion that housing and fuel prices have, so the amounts of cash people carry hasn't had to rise that much.

ericfrenkiel 14y ago

this was one of the more entertaining and enlightening articles I've read in a while. It reminds me of the scene in The Dark Knight when the Joker is sitting on a literal mountain of cash. When visualized that way, it's very true that bank robberies no longer make sense.

acd 14y ago

Interest rates are set by central banks, central banks are doing a form of central planning of the price of new money in other words controlling the interest rate. As we know from history of the past central planning works pretty badly for optimal resource allocation. The American Federal reserve is a private institution, founded by members travelling on a secret journey from a train station in New Jersey to a private club on Jekyll Island. There the key elements of the Federal Reserve act was created. On board the train was senator Aldrich, the senators daughter was married to Rockefeller. There was also representatives from Rockefeller and Warburg / Rothschild banking dynasty family. The whole system, seem to be constructed to create as much debt as possible, which channels money upwards in the economic pyramid. See Edward Griffins book the creature from Jekyll island http://www.bigeye.com/griffin.htm http://www.bigeye.com/griffin.htm - The system is flawed

guelo 14y ago
Nice conspiracy theories, but have you noticed that every other country also has a central bank even though they didn't have Rockerfellers and Rothschilds? And when you look at the big picture our economy is extremely successful, the envy of the world.
- technotony 14y ago
  There is an important difference between the Federal Reserve and other central banks which is that the Federal Reserve is privately owned by the banks, whereas in other countries it's owned by the people. Ultimately then, the Federal Reserve is more incentivized to maintain the system than in other countries. One day this may be important.
  - tsiki 14y ago
    Except that the Federal Reserve isn't private, its Board of Governors is nominated by the Senate and the President and its dividents are capped at 6% a year. "Fed is private" is just some crap being pedalled by conspiracy theorists who either don't have the intellectual curiosity to do even cursory fact checking or intentionally spread it to further their agenda.

guelo 14y ago

Interestingly, the US Treasury has resisted calls for larger denominated notes precisely because of criminal concerns. Cops don't want criminal organizations to be able to carry more than a million or two in a suitcase.

seanmcdirmid 14y ago
Turns out this is something people want to do in Switzerland. I got a 1000CHF note before at the post office when cashing a check, I was very nervous! I think even the Euro has a 500 note. I really wish I had that in China. Sometimes when paying the landlord, I would need a bag full of 20K RMB, at 100 RMB a note, which is 200 notes. When my landlord wanted bi-yearly rent, it was easier to go to the bank and just do a transfer (electronic banking isn't done in English, unfortunately).
- jsnell 14y ago
  The 1000 CHF bills are pretty ridiculous (1 CHF =~ 1.1 USD). But they're also in common enough use that you can pay for a relatively small purchase in a supermarket with one, and the cashier won't bat an eye. It'll just be a quick check under a UV light at most.
  - vidarh 14y ago
    Meanwhile, in the UK, most people rarely if ever handle the 50 pound notes that are in circulation - I've only seen perhaps a handful of them in the 12 years I've lived in London.
    - PJones 14y ago
      That's mostly because they're harder to get rid of than Scottish currency. Only the major supermarkets seem to accept them.

loxs 14y ago

"For wage earners this isn’t so much of a problem as long as wages inflate as well (which, well, they haven’t)" This, I think is a bit of an overstatement. Although wages may not have inflated too much, compared to, say gold, they have certainly inflated in terms of quality of life. Prices of personal possessions are extremely low, compared to 50 or 100 years ago, mostly due to "technical progress". 100 years ago a watch was a great luxury - passed down from generation to generation. But today "everybody" owns a smartphone, a computer, a wardrobe full of clothes. Everyone can afford high-caloric food (at least in the "developed world"). Not very much like 100 years ago.

bmunro 14y ago
It is probably referring to the fact that income for the bottom 50% of US earners has remained largely stagnant since the 1970s (after accounting for inflation) http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/31/wages-arent-stagnating-theyre-plummeting/ http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/31/w... http://www.newyorker.com/online/blogs/johncassidy/2011/09/poverty-figures.html http://www.newyorker.com/online/blogs/johncassidy/2011/09/po...
- yummyfajitas 14y ago
  Only because new people entered the country and dragged the median down. http://www.chrisstucchio.com/blog/2011/immigrants_simpsons_paradox_great_stagnation.html http://www.chrisstucchio.com/blog/2011/immigrants_simpsons_p... Consider a nation with Steve (income $50) Bill (income $50) and George (income $100). The median is $50. Now suppose Steve's income remains the same, Bill's goes up to $60, and George's income goes up to $150. The median has gone up to $60, right? However, suppose during this time, Jose (income $30) and Hector (income $40) immigrated. The median is back down to $50 even though every single person saw their income go up. The longitudinal data I link to demonstrates that this is exactly what happened (albeit with different numbers). (Note: this is an argument against drawing conclusions from Simpson's paradox, not an argument against immigration.)

jacques_chester 14y ago

Another reason that the Fed is creating so many new USD is to drive down the value of the USD versus other countries; ie, to make US exports cheaper.