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Old 07-09-2019, 03:38 PM   #21
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Originally Posted by jim584672 View Post
Makes zero sense to me. Take the cash and stuff it in a vault, get a better return.

Cash is less valuable in France. It's illegal to make a transaction over 1,000 Euros in France.
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Old 07-09-2019, 03:41 PM   #22
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Originally Posted by adrift View Post
.... It's illegal to make a transaction over 1,000 Euros in France.
Not totally right.

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As part of the controls introduced in recent years to tackle money laundering and tax evasion, like many other countries in Europe France has restrictions on the use of cash payments for the settlement of debts.

Until now that limit has been set at €3,000, requiring that any debt over this sum be settled by cheque, card payment or bank transfer.

With effect from 1st September this limit has been lowered to €1,000.

It is a rule that applies both for debts between consumers and businesses and for business to business transactions.

However, it does not apply for transactions between private individuals, which remain unhampered by limits.

https://www.french-property.com/news...ayments_limits
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Old 07-09-2019, 03:59 PM   #23
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There is not a market in bonds, there is an issuance in bonds and a coordination to lower interest rates over time that makes the holders of bonds much richer than the yields imply. When the US 30 year goes from it's present 2.55% to zero or below the bond holder will make 70 percent in a deflationary environment on top of the coupon, a ten year holder could make 17 percent in two years plus coupons. A 30 year that goes from zero to -0.75% will generate 25 percent income through bond appreciation. Make that the 100 year Austrian bond going from zero to -0.75 and you more than double your bond value.

With 14 trillion in negative interest rates there are some very wealthy nations and individuals that are caught up in this mania and the mania is expanding not contracting. There is nothing in this policy whatsoever that is concerned about the little guy and what he does with his money, it is a plan to continue to hold up the wealth of large bond holders and to keep countries from having to default under interest rates. The revolt against the US rate hikes shows the power the global bond market now holds. It is the Japanese model that will rule the day, eventually when Central Banks own 70-80% of all bonds they will merely cancel the debt
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Old 07-11-2019, 10:44 AM   #24
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Educate me please ! Why would anyone buy a bond with a negative interest rate ?

You are a pension fund with lots of billions. Your mandate says you have to invest at least x% in long term fixed income assets, and you have to invest in your own currency. Risk averse, government mandated.

These are the main parties buying this stuff, because they have no choice and you can't convert billions into cash, nor are you allowed to by your mandate even if you could.
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Old 07-12-2019, 08:57 AM   #25
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It is the Japanese model that will rule the day, eventually when Central Banks own 70-80% of all bonds they will merely cancel the debt
\

sounds possible. So what is the way to proceed if we are headed in the Japanese way? RE, foreign stocks, long term bonds? Somebody must be making money in Japan, how do they do it?
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Old 07-12-2019, 09:51 AM   #26
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For us, until banks start putting fees on checking and savings accounts, the value of the information about negative interest rates is only good as a data point on the world economy. If fees do arise, or for regular people in France, nothing stopping them from buying currency, keeping it in a bank vault, walking the cash to the teller, and making any magnitude purchase. This will probably trigger cash deposit reporing. I wonder if they have cash withdrawal reporting so they powers can maintain a tally.
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Old 07-14-2019, 06:31 AM   #27
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If fees do arise, or for regular people in France, nothing stopping them from buying currency, keeping it in a bank vault, walking the cash to the teller, and making any magnitude purchase.

In the Netherlands and I'm sure other countries too banks don't have vaults anymore for consumers. You can rent a vault from a non-bank, but it's only insured up to 45k.
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Old Yesterday, 05:36 PM   #28
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I had Googled this last week and found this Forbes article. Is basically describes that for some institutions they're either forced only to buy domestic bonds and/or there's a lot of currency hedging that could make a negative-yielding bond more attractive than a positive-yielding bond in a different country. Welcome to Bizarro-world.

https://www.forbes.com/sites/garthfr.../#6e8d2fbe3306
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