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Yeah, but this article makes no sense for another reason: hardly any of the money supply is actually made up of cold hard cash! Less than 4% according to these
by csirac2 11y ago
Yeah, but this article makes no sense for another reason: hardly any of the money supply is actually made up of cold hard cash! Less than 4% according to these 2004 stats: http://www.frbsf.org/education/publications/doctor-econ/2004/april/money-supply-currency-counterfeit http://www.frbsf.org/education/publications/doctor-econ/2004...
- mike_hearn 11y agoTheir assumption is that if you have negative interest rates, people will withdraw money from banks as cash so that percentage will go up. Switzerland has recently entered this previously uncharted territory. It's leading to weird problems like banks being unable to process the new rates as the programmers assumed the world would never be so insane, and pension funds planning to withdraw their funds from banks and being outright denied access to their own money. There are persistent rumours about some funds thinking about building their own bunkers and storage areas for gold and cash, as they have an obligation to protect their investors funds and the SNB is now effectively confiscating people's pensions.
- csirac2 11y agoOk, except... Well I can't help but think that if they can create a crazy unicorn land of negative interest, surely by comparison the monetary policy option of keeping the mint idle would be a would be a walk in the park...