"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.
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.
In the USA high-denomination bills haven't necessarily been taken out of circulation, but the Mint hasn't printed new bills larger than $100 since the 1940s. Larger bills were really only used for large business and interbank transactions, and for that purpose they've been obsolete for ages. Certainly in the digital age, but before then even paper checks offered greater convenience and security.
There might be some compression toward the center, but realistically most people only use cash for smaller transactions. $20 is a convenient denomination to get out of ATMs, and of course smaller bills come into play as cashiers make change for your payments. But I seem to remember hearing somewhere that economists now estimate that a majority of the US $50 and $100 bills are either circulating outside the country or circulating within the black and gray markets.
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.
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)
"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.
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)
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.
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.
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.
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.
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.
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.
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.
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.
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).
[+] [-] JacobAldridge|13 years ago|reply
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.
[+] [-] randallsquared|13 years ago|reply
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.
[+] [-] bunderbunder|13 years ago|reply
There might be some compression toward the center, but realistically most people only use cash for smaller transactions. $20 is a convenient denomination to get out of ATMs, and of course smaller bills come into play as cashiers make change for your payments. But I seem to remember hearing somewhere that economists now estimate that a majority of the US $50 and $100 bills are either circulating outside the country or circulating within the black and gray markets.
[+] [-] EliRivers|13 years ago|reply
[+] [-] krakensden|13 years ago|reply
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|13 years ago|reply
It's not conventional, but people do make all of those purchases with cash.
[+] [-] vidarh|13 years ago|reply
[+] [-] InclinedPlane|13 years ago|reply
[+] [-] loxs|13 years ago|reply
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|13 years ago|reply
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/31/w...
http://www.newyorker.com/online/blogs/johncassidy/2011/09/po...
[+] [-] SimianLogic2|13 years ago|reply
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|13 years ago|reply
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.
[+] [-] sliverstorm|13 years ago|reply
[+] [-] troels|13 years ago|reply
[+] [-] pathy|13 years ago|reply
[+] [-] acd|13 years ago|reply
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
- The system is flawed
[+] [-] guelo|13 years ago|reply
[+] [-] carlob|13 years ago|reply
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.
[+] [-] ericfrenkiel|13 years ago|reply
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.
[+] [-] guelo|13 years ago|reply
[+] [-] seanmcdirmid|13 years ago|reply
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).
[+] [-] jacques_chester|13 years ago|reply