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> Nobody hoards large sums of cash i completely disagree. first of all, you're arguing semantics, and you know very well that there are many fractional reserv

> Nobody hoards large sums of cash i completely disagree. first of all, you're arguing semantics, and you know very well that there are many fractional reserve bank accounts with lots of accumulated cash available for withdrawal at any time. that is a working, popular, valid definition of "hoarding cash". second, do not underestimate the amount of cold, hard, paper (polymer?) cash hidden in safe deposit boxes distributed around the world. you can bet your bottom dollar (har har) that this cash isn't being lent out to commercial banking clients and mortgage buyers. it's sitting in boxes, unused. in a certain sense, it's an anti-inflationary savings mechanism. that's not even counting the gold, platinum, pearls, diamonds, precious gems, and etc.

WalterBright 13y ago
I understand fractional reserve banking. It's a percentage (I think around 10%) of the deposits the government requires a bank to keep on hand. The rest of the deposits are all loaned out back into the economy. Note that the government requires this reserve because otherwise the bank will loan it out, i.e. the bank doesn't actually desire to keep cash on hand. Neither do rich people. Even drug lords don't want cash hoards, it's why they launder it. It's not splitting hairs over semantics. People who have money in the bank do not have a cash hoard that they are withholding from the economy. As far as people keeping assets in safety deposit boxes, nobody has any idea how much is in them, so it's rather pointless to talk about them. I do find it hard to believe that Apple's billions in "cash" is really a hoard in a safety deposit box that's withheld from the economy. >that is a working, popular, valid definition of "hoarding cash". Not in the sense we are discussing of it being withheld from the economy. (For fun, watch Breaking Bad, where one of Heisenberg's biggest problems is trying to convert cubic feet of cash into something he can spend.)

WalterBright 13y ago

I understand fractional reserve banking. It's a percentage (I think around 10%) of the deposits the government requires a bank to keep on hand. The rest of the deposits are all loaned out back into the economy. Note that the government requires this reserve because otherwise the bank will loan it out, i.e. the bank doesn't actually desire to keep cash on hand. Neither do rich people. Even drug lords don't want cash hoards, it's why they launder it. It's not splitting hairs over semantics. People who have money in the bank do not have a cash hoard that they are withholding from the economy. As far as people keeping assets in safety deposit boxes, nobody has any idea how much is in them, so it's rather pointless to talk about them. I do find it hard to believe that Apple's billions in "cash" is really a hoard in a safety deposit box that's withheld from the economy. >that is a working, popular, valid definition of "hoarding cash". Not in the sense we are discussing of it being withheld from the economy. (For fun, watch Breaking Bad, where one of Heisenberg's biggest problems is trying to convert cubic feet of cash into something he can spend.)