Tag Archive for Cash

German Response to Negative Interest Rates: Safe Deposit Boxes

Image: -JvL-

Image: -JvL-

The Japanese response to negative interest rates was to buy personal safes. The German response is to pull money out of bank accounts and stick it in safe deposit boxes. Both are perfectly understandable reactions to the prospect of having to pay interest to a bank for holding deposits. It is particularly interesting in Germany, where the Bundesbank a few years ago admitted that the average real rate of return on savings deposits has been negative for nearly the past 40 years. Now that nominal rates have turned negative too, the facade of savings accounts as a safe place to park money to earn a little bit of income has finally been ripped away.

Billionaires Have Lots of Cash

Warren Buffett meets with President Barack Obama.
Most probably would probably read this title and say, “Duh, of course billionaires have lots of cash.” But you have to remember, portfolio managers have traditionally recommended not keeping a lot of cash on hand. The fact that billionaires are holding, on average, $600 million of cash apiece, and millionaires are holding 20-30% of their assets in cash means that markets are anything but settled. Under normal market conditions you might expect 3-5% of the assets of the rich to be held in cash. These large cash holdings mean two things: 1.) there just aren’t that many good investment opportunities out there that warrant depletion of cash holdings, and 2.) the rich fear that rising inflation may be just around the corner.

Punished for the Sins of Our Fathers

Punished for the Sins of Our Fathers A news report a little over a week ago mentioned a woman who tried to travel to the Philippines with $40,000 in cash hidden on and about her person. Whether she knew it or not, it is a crime to transport more than $10,000 of monetary instruments into…