Trump tweets that he favors zero or negative interest rates (mortgage, buy)

[ncole1]

AFAIK, there is absolutely zero evidence that zero or negative rates are better for an economy (in the medium to long term) than moderate rates (2-3% fed funds, 5-6% prime rate).

[PacoMartin]

Originally Posted by RationalExpectations

Gold bars are pretty easy to obtain and are quite liquid.

Gold is $150,550 per 100 oz bar. Certainly some people will put money into gold if they are concerned about negative interest rates.

Currency bricks are standardized at 4000 banknotes that are shrink wrapped and labeled. That way they don't have to be counted. They weigh 4 kg and if you are using $100 banknotes they are worth $400,000 (roughly twice the value of 4 kg of gold)


Currency straps standardize counts of 100 banknotes

Originally Posted by Peregrine

Agree. I don't get the connection at all?!?!

But consider a person who has $3,000 in a bank account, and is concerned that he is getting no interest and bank fees will begin to chip away at his account. The easiest thing that he can do is to turn it into 30 $100 banknotes and put it in a safe hidden somewhere in his home.

Japanese hoarding $300B under mattresses
The simplest and most obvious way to lure out the cash would be to raise interest rates, which are hovering at record lows, but that has its own pitfalls.“The government wouldn’t be able to afford to service its debt anymore,” said Kumano.

The currency system was not designed to handle large scale hoarding. It's being used that way by foreigners who feel that US currency is the best way of storing value. But if even 10% of Americans begin hoarding $100 banknotes, the Bureau of Engraving and Printing will have trouble producing that many banknotes.

The number of $100 banknotes in circulation is roughly 40 times the population, but up to 75% of those bills circulate in foreign countries.

[BigCityDreamer]

Lower interest rates means the stock market goes higher.

Everybody is invested in the stock market, right?

[SkyDog77]

This would significantly reduce the ability of the fed to do anything when the next recession comes. It’s like burning all of our gas by flooring it on a downhill.

[Transmition]

Billionaires favor high interest rates because it gives them an easy income from their investments. People in debt favor low interest rates because it means their debt doesn't increase as much over time. I'll let you make your own decision about Trump's financial state.

[RationalExpectations]

Originally Posted by PacoMartin

I think that it is true that the FED is not going to pay attention to his tweets, but a big percentage of ordinary men do pay attention. A bank run on $100 bills is not going to be done by executives, but by blue collar workers.

I read that the average ATM withdrawal in the USA is roughly $100 in $20 bills, but the average teller withdrawal is about $700.

The last completed series of color $100 bills was divided up to the Federal Reserve Banks. Numbers are in skids where a skid is about 1400 lbs of banknotes numbering 640,000 notes.

3,435 New York City
1,755 Atlanta
1,465 San Francisco
980 Dallas
805 Richmond
720 Chicago
625 Cleveland
445 St. Louis
360 Boston
300 Kansas City, MO
260 Philadelphia
205 Minneapolis

Commercial banks in central USA don't have the need for large numbers of $100 banknotes.
The distribution of $20 bills (in skids) is different.
990 New York City
970 Richmond
920 San Francisco
720 Atlanta
650 Chicago
540 Philadelphia
510 Cleveland
400 Dallas
290 Boston
280 Kansas City, MO
240 St. Louis
80 Minneapolis

Here in Las Vegas, everyone keeps $100 bills in their wallet.

[RationalExpectations]

Originally Posted by PacoMartin

Gold is $150,550 per 100 oz bar. Certainly some people will put money into gold if they are concerned about negative interest rates.

I was referring to 100 gram or 1000 gram gold bars, not 100 ounce bars. The 100 gram and 1000 gram gold bar is more affordable, more easily stored, and more easily converted back into cash than large 100 oz bars.


https://f5b8ui-0497s6r6rnkm.cloudmae...YvEk42nIVb.jpg

https://canadianpmx.com/wp-content/u...99991000_c.jpg

[Serious Conversation]

Originally Posted by SkyDog77

This would significantly reduce the ability of the fed to do anything when the next recession comes. It’s like burning all of our gas by flooring it on a downhill.

Absolutely. There are very few tools left in the toolkit. When the next recession comes, the Fed has little room in the way of monetary policy and Congress has little room in the way of fiscal policy to assist, with respect to where interest rates and deficits currently are, respectively.

[SkyDog77]

Originally Posted by Transmition

Billionaires favor high interest rates because it gives them an easy income from their investments. People in debt favor low interest rates because it means their debt doesn't increase as much over time. I'll let you make your own decision about Trump's financial state.

Firms favor low interest rates because they allows for access to cheaper capital. Billionaires own firms and like using debt when it’s cheap.

[rjshae]

If Trump succeeds in sustaining the economy to get re-elected, then we go into a deep recession or depression, I'd expect that by 2022 he'll be impeachable because his popularity will be in the single digits.