

Only An Idiot Would Rob a Bank: How Inflation Deflated the Stick-Up - 001sky
http://thebillfold.com/2012/05/only-an-idiot-would-rob-bank-inflation/

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JacobAldridge
_"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.

~~~
randallsquared
_In the US this has been less the case [...]_

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.

~~~
paulhauggis
If you're in a really bad area of town, they also dispense 5s. With a $1-2
processing ATM fee.

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krakensden
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.

~~~
halviti
You can actually do all of those things with cash.

It's not conventional, but people do make all of those purchases with cash.

~~~
krakensden
You'll notice all the qualifiers in my post- "nice" apartment, "new" car. Any
vaguely reputable rental company is going to want a bunch of financial data,
that proves you can afford it over the lifetime of the lease. You can't do
that with 100 grand in a suitcase.

Any new car is going to be over 10k, which means you need to either report the
transaction or get a loan from a bank... who is going to want proof you can
pay it off.

Housing is the same thing. So yes, you can use cash- but you're going to have
a hell of a time using cash that doesn't have an obvious, legal source.

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loxs
"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.

~~~
bmunro
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)

[http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/31/w...](http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/31/wages-
arent-stagnating-theyre-plummeting/)

[http://www.newyorker.com/online/blogs/johncassidy/2011/09/po...](http://www.newyorker.com/online/blogs/johncassidy/2011/09/poverty-
figures.html)

~~~
yummyfajitas
Only because new people entered the country and dragged the median down.

[http://www.chrisstucchio.com/blog/2011/immigrants_simpsons_p...](http://www.chrisstucchio.com/blog/2011/immigrants_simpsons_paradox_great_stagnation.html)

Consider a nation with Steve (income $50) Bill (income $50) and George (income
$100). The median is $50. Now suppose Steve's income remains the same, Bill's
goes up to $60, and George's income goes up to $150. The median has gone up to
$60, right?

However, suppose during this time, Jose (income $30) and Hector (income $40)
immigrated. The median is back down to $50 even though _every single person_
saw their income go up.

The longitudinal data I link to demonstrates that this is exactly what
happened (albeit with different numbers).

(Note: this is an argument against drawing conclusions from Simpson's paradox,
not an argument against immigration.)

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SimianLogic2
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.

~~~
sliverstorm
Teenagers tell me panhandling is still very lucrative, just throw on some
ratty clothes and you still make 2x minimum wage.

~~~
mdonahoe
People are especially generous to homeless youth. You have to watch out for
very caring individuals that try to take you to get food or a shelter.

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acd
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.

See Edward Griffins book the creature from Jekyll island
<http://www.bigeye.com/griffin.htm>

\- The system is flawed

~~~
guelo
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.

~~~
technotony
There is an important difference between the Federal Reserve and other central
banks which is that the Federal Reserve is privately owned by the banks,
whereas in other countries it's owned by the people. Ultimately then, the
Federal Reserve is more incentivized to maintain the system than in other
countries. One day this may be important.

~~~
rskar
The public vs. private aspects of the Federal Reserve seem to be quite a
muddle, per articles in Wikipedia:

Federal Reserve System: "The Federal Reserve System's structure is composed of
the presidentially appointed Board of Governors (or Federal Reserve Board),
the Federal Open Market Committee (FOMC), twelve regional Federal Reserve
Banks located in major cities throughout the nation, numerous privately owned
U.S. member banks and various advisory councils."

Federal Reserve Bank: "The Federal Reserve Banks have an intermediate legal
status, with some features of private corporations and some features of public
federal agencies. The United States has an interest in the Federal Reserve
Banks as tax-exempt federally created instrumentalities whose profits belong
to the federal government, but this interest is not proprietary. In Lewis v.
United States, the United States Court of Appeals for the Ninth Circuit stated
that: 'The Reserve Banks are not federal instrumentalities for purposes of the
FTCA [the Federal Tort Claims Act], but are independent, privately owned and
locally controlled corporations.' The opinion went on to say, however, that:
'The Reserve Banks have properly been held to be federal instrumentalities for
some purposes.' Another relevant decision is Scott v. Federal Reserve Bank of
Kansas City, in which the distinction is made between Federal Reserve Banks,
which are federally created instrumentalities, and the Board of Governors,
which is a federal agency."

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carlob
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.

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ericfrenkiel
this was one of the more entertaining and enlightening articles I've read in a
while.

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.

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guelo
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.

~~~
seanmcdirmid
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).

~~~
jsnell
The 1000 CHF bills are pretty ridiculous (1 CHF =~ 1.1 USD). But they're also
in common enough use that you can pay for a relatively small purchase in a
supermarket with one, and the cashier won't bat an eye. It'll just be a quick
check under a UV light at most.

~~~
vidarh
Meanwhile, in the UK, most people rarely if ever handle the 50 pound notes
that are in circulation - I've only seen perhaps a handful of them in the 12
years I've lived in London.

~~~
PJones
That's mostly because they're harder to get rid of than Scottish currency.
Only the major supermarkets seem to accept them.

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jacques_chester
Another reason that the Fed is creating so many new USD is to drive down the
value of the USD versus other countries; ie, to make US exports cheaper.

