What a silly headline. The actual quote is (emphasis mine)
> Björn Eriksson, former head of Sweden’s national police and now head of Säkerhetsbranschen, a lobbying group for the security industry, told The Local, “I’ve heard of people keeping cash in their microwaves because banks won’t accept it.”
The only viable RFID would be a passive chip, which would require the scanner to be in close proximity to the notes anyway, so putting them in a mattress would be equally efficient. You could probably build a superpowered scanner that would detect the location of these notes, but I would suspect there would be so much noise in a home that it wouldn't be too easy.
From a practical standpoint, should people start "hiding" their notes in their microwaves, that would be the first place to look if you're a bad guy.
They certainly can, which is something the article intentionally ignores.
They could choose to invest into any number of assets instead of holding cash. Open a brokerage account and buy a high quality stock that produces a dividend.
I'm not sure what the hell this article is about, savings still have, and will continue to have, positive returns as long as someone can invest the money in the market at positive return. The interest of the central bank isn't really interesting from that perspective.
Yes. But one person knew another person that had heard about a person that had put money in a microwave, so there you go.
The obvious benefit of the microwave is that it's essentially a Faraday cage so you don't need a special tinfoil hat for your money, only for yourself.
A microwave does have some effectiveness as a Faraday cage, but it's not complete. I worked for a couple companies doing mobile games, and one of the certification tests during the 3G era was to make sure the app performed gracefully when the signal was lost. Putting the phone in a microwave was the first thing we thought of, but it didn't work well to cut the signal. We tried a couple different microwave ovens. Sometimes it worked if we put the phone in a ziplock bag and immersed it in salt water, then put it in the microwave.
Swede here. It is always fascinating to read this kind of rabid BS about the very country you live and operate in - it is as if a completely different society is being described. Whatever brings the clicks, I guess.
This kind of brings me back to Fox News reporting cataclysmic imagery about cars being burnt in my city (Gothenburg) some time back. External "perspectives" are comedic gold, indeed.
Nothing is happening in relation to this. People still use cash and they're not going to get arrested for it. And a microwave is a ridiculous place to store anything.
Yeah the microwave thing seems made up. But it is true that large amounts of cash (as in hundreds of thousands, not something like 10k) will raise suspicions. Banks are also legally obliged to report all amounts over 10k I believe, and do impose restrictions on the amounts of cash they will deal with at any given time. Many cards (and ATMs) also have a limit on the amount of cash you can withdraw, although this has been the case for years. I remember when buying a computer some 15 years ago or more – from a private seller who only accepted cash – and having to withdraw cash from three separate ATMs because there was a limit on withdrawing more than 8k or so per ATM. This was on a Sunday I believe, so the branches were all closed.
Another Sweden here. While I agree with @csvan that there's a fair bit of hyperbole in the article, it's not entirely wrong. Swedish society is increasingly moving away from cash transactions, and instead relying on various other ways of payment.
For example: on Tredje Långgatan (a popular street) in Gothenburg, most (all?) restaurants have a policy to not accept cash at all. I've seen this at many other places as well, and certainly not just in Gothenburg.
Another example is this summer when I went to see a concert and wanted to buy ear plugs, since I'd forgotten to do it earlier. The seller I spoke with outside the stadium didn't accept cash, but instead used something called Swish. It's a way to send money with your phone – kind of like Venmo I guess.
The move to a cash-less society has been ongoing for some time, and communal services such as busses and trains in many cities gave up on cash several years ago.
For the most part I think a move to a cash-less (as in physical moneys) is a good move. The problems I have personally seen and been affected by, although not enough to care for paper moneys, are:
- Smaller shops not accepting card purchases below a certain amount, or passing on the processing fee on to the consumer (probably against their contracts)
- Banks being very reluctant to handle cash from business; either making it very difficult by imposing strange limits (only a certain amount accepted per day/week,) or imposing expensive handling fees, or both
- Being a tourist in a city where you can't easily pay bus fare makes it difficult to get around; for the record: Gothenburg is the only city in Sweden I've seen that gets this right by having card machines on trams, while my home town of Stockholm is a lesson in absurdity when trying to pay the fare
I think the positives currently outweigh the negatives, but as more and more services go cash-less, problems start to show. For instance there have been several high-profile outages where it's been impossible for people to make payments, because the systems are down for an extend period of time. Cash may be expensive to deal with, but you can't (currently) beat it when your internet connection goes down.
Currently, all significant alternatives to using cash in Sweden are technically more or less the same. Swish may have a different user experience, but the payments are still processed by banks and so face the same problems of stability. In fact, the product is proprietary and owned by a company called Getswish AB – a private company owned by major Swedish banks.
Aside from uptime, cash has the benefit of being a point-to-point method of payment, not involving a third party. Swish, cards, and other forms of payments that play any significant role in Swedish society all involve a third party (usually banks.) There are obvious privacy concerns with this, but moreover it also means because the third party authorizes the transaction you can be shut down at any moment and for any reason. Sure, you might have legal options, but that's of little help when you have to buy food and all your money is locked away – possibly due to glitches.
Also, what happens when the banks fail more permanently? Sucks to lose your money, sure, but it sucks even more for the economy at large when there's no way to move money around. It further cements the "need" for big banks in society, since they effectively own the transactions when there's no way to make them without the banks.
I am concerned, but mostly for reasons other than the ones in that article, which seems to treat cash as some magical asset that isn't really affected by interest rates.
Similar to how Fox News reported that there are hundreds of No Go Zones for non-muslims in England and other European countries, going as far as to claim that Birmingham (England's second most populous city) is only visited by Muslims. Patently untrue, but because of how far removed their audience is from the rest of the world it became accepted as fact.
It's strange, whenever you read about something you know a lot about in a newspaper they will usually get so much wrong that the article actually makes you less knowledgeable about the subject.
Can you attest to the push towards cashless? The Credit Suisse says there's certainly a trend towards cash-free with places not accepting cash.
Not using cash isn't inherently a problem. The issue is that the alternatives are all tracked. If systems existed like sci-fi "credsticks" with zero-knowledge proofs (so as to not connect transactions), that'd be fine while mitigating most of the problems of cash (dealing with cash; securely transporting it).
I've never seen or heard about anyone being refused to pay with cash if they wanted to.
The only place I would pay with cash though is in a bar, all other places I prefer to pay by card.
I do agree with you there could be problems in the future where digital payments start becoming the only option (which I'm hoping for) and their certainly is a market for future products. I bet they will be looked at in the same way as VPN services are looked at now though.
Many places don't take cash, Yaki-Da[1] in Gothenburg for instance. Many (all?) restaurants on Tredje Långgatan as well, and I've also seen several places in Stockholm where they won't accept cash.
Also, many cities' communal services like busses and trains no longer deal in cash.
[1]: http://www.yaki-da.se (In the bottom right says "Yaki-Da är en helt kontantfri restaurang och nattklubb.")
Yes, there is a push towards cashless in Sweden. Though we're still very far away from going fully cashless in general. The central bank are actually releasing new denominations of coins and notes this autumn, so we'll have cash around for the foreseeable future.
As mentioned public transportation is one area where cash is commonly not accepted any more. Banks obviously encourage card payments over cash and have also been reducing the number of their own offices that handle cash. On the other hand most grocery stores in Sweden allows you to withdraw cash when you shop and charge your card. If you need cash that's the most convenient way to get it.
Entirely cashless stores are quite rare. Maybe it is a bit more common in some big city locations, where the loss of the very few customers who cannot pay by card doesn't matter - simply because the vast majority already pays with cards.
On a personal level I prefer card payments and it can easily pass weeks between the very rare cases where I have to use cash.
That said, I would really not like a cashless society if that means I cannot have any mean of traceless transactions. I want to be able to hand over money to people I don't know or necessarily trust beyond a superficial level, without having to account for it later.
As for cash in the microwave oven... Well, duh, where else would you keep them? :)
No, the bank only see who issued the charge, when the charge occurred and possibly which charging station. Not why the charge occurred or what was charged.
For local travel, commutes, etc, you normally get a pre-charged travel card from the local public transit provider. The route and cost of each individual trip is then a transaction limited to the transit provider's internal charging system. You can also buy a single ticket directly with your bank card, but the bank will still only see when the charge occurred, how much was charged, and possibly which charging station, not where you travelled.
Obviously the travel provider's internal charging system will have detailed information about how their travel cards are used to pay for trips. Still, the cards are normally not personal, so the provider cannot know it's the person charging the card that also is the person travelling.
Why should anyone lose money because they've decided to save it for the future, with no inherent risk?
It's one thing to lose it to investments. It's another thing to expect the money to sit without gaining appreciable interest, and effectively losing value because of inflation.
If someone puts 1,000 units of currency into a bank, why should they ever not be able to retrieve that 1,000 units at any reasonable point in the future?
Keep in mind that Sweden, like many european countries, has much stronger social policies than the USA.
In the USA, due to the anemic social care programs for people in dire straits (long-term unemployed, sick, young, old), it is necessary for people to individually save up money to guarantee safety in emergencies. To that end, saving in banks is rewarded with interest rates.
In more social countries though such emergency savings are spread across the entire population in big pots. People saving their money in bank accounts are effectively keeping it out of those pots, and from society at large, which society punishes by making such individual savings volatile.
How does this punish people that are holding their savings in property instead of a bank account though? Low interest rate policies rather massively encourage placing your cash into property. Which also explains why Sweden has such an extremely bad household income to debt ratio, with among the most over-leveraged households of any nation.
Hoarding cash increases purchasing power for everyone else looking to spend, also a positive outcome.
Is it a positive outcome if property prices inflate so much due to this, that it pushes Sweden's households into such extreme levels of debt that the economy barely grows and debt service levels become untenable? Sweden is at that point right now. Eg:
I don't know, that level of complexity is beyond what i can usefully comment on. Maybe the decision makers in sweden think the benefits outweigh the downsides?
This is completely inaccurate. Savings account in the US have one of the lowest interest rates in the world, sitting at 0.06% right now [0]. If anything, US citizens are rewarded for NOT keeping their money in the bank, investing it anywhere else (but at a higher risk). Complete opposite of what's happening in Europe.
The article explicitly says that negative rates are not being passed on to the banks' customers right now, and then goes on to speculate that it will in the future.
Deflation means that 1 unit of currency will be worth more tomorrow than it is today, hence it is explicitly rewarding keeping money instead of investing it.
> If someone puts 1,000 units of currency into a bank, why should they ever not be able to retrieve that 1,000 units at any reasonable point in the future?
Obviously, to stop people from running the bank. You can say it's a bad idea, but it's not like the reasoning is mysterious.
>If someone puts 1,000 units of currency into a bank, why should they ever not be able to retrieve that 1,000 units at any reasonable point in the future?
Why should a bank offer service for free? Yes, they might make money doing stuff with your money, but that shouldn't be a mandatory requirement for a bank.
It should be noted that the markets have been doing very well throughout this period, so it's not a matter of "stagflation", at least not yet.
As long as the expected return for investing my money is something way higher than zero, I expect to be able to lend them my money without paying for it. And as long as a bank can invest their customers money at good returns, they will want to attract money from customers.
I'd agree with you, if savings accounts were in fact savings accounts. But they are in fact lending accounts, where you lend money to the bank, so they can make more. In this scenario, why shouldn't the bank provide a kickback in the form of interest?
If given a choice, I'd rather pay money for stronger guarantees on the safe keeping of my money, and guarantees that my money isn't being used for anything but safe keeping. I could put cash in a vault, I suppose, but I don't want cash. I'm perfectly fine with my money being all digital, I just want it kept safe and away from criminals regardless of whether they wear masks or three piece suits.
Central banking is central planning that gives the richest more money. There would not be negative interest rate in a true market economy where markets sets the interest rate.
The new central printed money is flowing to the stock exchange and creating an epic housing bubble in Sweden.
The banks here used internal risk weights so created a loan on a million just cost them around 2000 that was fractions of fractions of cash needed to create housing loans.
Personally I think its housing market loan Ponzi scheme where the last ones in to loan when the prices no longer rise are set to loose.
Central banking is the solution economies have come up with to the problem of the market shitting the bed every decade. It's outcompeted the alternatives basically everywhere and for good reason.
Euribor is the basic interest rate that European banks use to determine interest rates on savings and mortgages. A negative value basically means that you have to pay the bank if you want them to store your savings (which they are free to invest or lend). Banks will typically give you some extra percentage points over Euribor though, so as a customer you currently see somewhere around positive zero of interest on your bank savings in my country.
49 comments
[ 3.0 ms ] story [ 33.7 ms ] thread> Björn Eriksson, former head of Sweden’s national police and now head of Säkerhetsbranschen, a lobbying group for the security industry, told The Local, “I’ve heard of people keeping cash in their microwaves because banks won’t accept it.”
If it is implemented, microwaves become logical choice to store cash in because they're practical Faraday cages.
From a practical standpoint, should people start "hiding" their notes in their microwaves, that would be the first place to look if you're a bad guy.
They could choose to invest into any number of assets instead of holding cash. Open a brokerage account and buy a high quality stock that produces a dividend.
The obvious benefit of the microwave is that it's essentially a Faraday cage so you don't need a special tinfoil hat for your money, only for yourself.
This kind of brings me back to Fox News reporting cataclysmic imagery about cars being burnt in my city (Gothenburg) some time back. External "perspectives" are comedic gold, indeed.
For example: on Tredje Långgatan (a popular street) in Gothenburg, most (all?) restaurants have a policy to not accept cash at all. I've seen this at many other places as well, and certainly not just in Gothenburg.
Another example is this summer when I went to see a concert and wanted to buy ear plugs, since I'd forgotten to do it earlier. The seller I spoke with outside the stadium didn't accept cash, but instead used something called Swish. It's a way to send money with your phone – kind of like Venmo I guess.
The move to a cash-less society has been ongoing for some time, and communal services such as busses and trains in many cities gave up on cash several years ago.
For the most part I think a move to a cash-less (as in physical moneys) is a good move. The problems I have personally seen and been affected by, although not enough to care for paper moneys, are:
- Smaller shops not accepting card purchases below a certain amount, or passing on the processing fee on to the consumer (probably against their contracts) - Banks being very reluctant to handle cash from business; either making it very difficult by imposing strange limits (only a certain amount accepted per day/week,) or imposing expensive handling fees, or both - Being a tourist in a city where you can't easily pay bus fare makes it difficult to get around; for the record: Gothenburg is the only city in Sweden I've seen that gets this right by having card machines on trams, while my home town of Stockholm is a lesson in absurdity when trying to pay the fare
I think the positives currently outweigh the negatives, but as more and more services go cash-less, problems start to show. For instance there have been several high-profile outages where it's been impossible for people to make payments, because the systems are down for an extend period of time. Cash may be expensive to deal with, but you can't (currently) beat it when your internet connection goes down.
Currently, all significant alternatives to using cash in Sweden are technically more or less the same. Swish may have a different user experience, but the payments are still processed by banks and so face the same problems of stability. In fact, the product is proprietary and owned by a company called Getswish AB – a private company owned by major Swedish banks.
Aside from uptime, cash has the benefit of being a point-to-point method of payment, not involving a third party. Swish, cards, and other forms of payments that play any significant role in Swedish society all involve a third party (usually banks.) There are obvious privacy concerns with this, but moreover it also means because the third party authorizes the transaction you can be shut down at any moment and for any reason. Sure, you might have legal options, but that's of little help when you have to buy food and all your money is locked away – possibly due to glitches.
Also, what happens when the banks fail more permanently? Sucks to lose your money, sure, but it sucks even more for the economy at large when there's no way to move money around. It further cements the "need" for big banks in society, since they effectively own the transactions when there's no way to make them without the banks.
I am concerned, but mostly for reasons other than the ones in that article, which seems to treat cash as some magical asset that isn't really affected by interest rates.
http://www.theguardian.com/world/2015/feb/12/paris-lawsuit-f...
It's strange, whenever you read about something you know a lot about in a newspaper they will usually get so much wrong that the article actually makes you less knowledgeable about the subject.
Makes me question reading news at all.
Not using cash isn't inherently a problem. The issue is that the alternatives are all tracked. If systems existed like sci-fi "credsticks" with zero-knowledge proofs (so as to not connect transactions), that'd be fine while mitigating most of the problems of cash (dealing with cash; securely transporting it).
1: https://www.credit-suisse.com/us/en/news-and-expertise/econo...
The only place I would pay with cash though is in a bar, all other places I prefer to pay by card.
I do agree with you there could be problems in the future where digital payments start becoming the only option (which I'm hoping for) and their certainly is a market for future products. I bet they will be looked at in the same way as VPN services are looked at now though.
Also, many cities' communal services like busses and trains no longer deal in cash.
[1]: http://www.yaki-da.se (In the bottom right says "Yaki-Da är en helt kontantfri restaurang och nattklubb.")
As mentioned public transportation is one area where cash is commonly not accepted any more. Banks obviously encourage card payments over cash and have also been reducing the number of their own offices that handle cash. On the other hand most grocery stores in Sweden allows you to withdraw cash when you shop and charge your card. If you need cash that's the most convenient way to get it.
Entirely cashless stores are quite rare. Maybe it is a bit more common in some big city locations, where the loss of the very few customers who cannot pay by card doesn't matter - simply because the vast majority already pays with cards.
On a personal level I prefer card payments and it can easily pass weeks between the very rare cases where I have to use cash.
That said, I would really not like a cashless society if that means I cannot have any mean of traceless transactions. I want to be able to hand over money to people I don't know or necessarily trust beyond a superficial level, without having to account for it later.
As for cash in the microwave oven... Well, duh, where else would you keep them? :)
For local travel, commutes, etc, you normally get a pre-charged travel card from the local public transit provider. The route and cost of each individual trip is then a transaction limited to the transit provider's internal charging system. You can also buy a single ticket directly with your bank card, but the bank will still only see when the charge occurred, how much was charged, and possibly which charging station, not where you travelled.
Obviously the travel provider's internal charging system will have detailed information about how their travel cards are used to pay for trips. Still, the cards are normally not personal, so the provider cannot know it's the person charging the card that also is the person travelling.
http://www.thenation.com/article/french-fry-fox/
It's one thing to lose it to investments. It's another thing to expect the money to sit without gaining appreciable interest, and effectively losing value because of inflation.
If someone puts 1,000 units of currency into a bank, why should they ever not be able to retrieve that 1,000 units at any reasonable point in the future?
In the USA, due to the anemic social care programs for people in dire straits (long-term unemployed, sick, young, old), it is necessary for people to individually save up money to guarantee safety in emergencies. To that end, saving in banks is rewarded with interest rates.
In more social countries though such emergency savings are spread across the entire population in big pots. People saving their money in bank accounts are effectively keeping it out of those pots, and from society at large, which society punishes by making such individual savings volatile.
Is it a positive outcome if property prices inflate so much due to this, that it pushes Sweden's households into such extreme levels of debt that the economy barely grows and debt service levels become untenable? Sweden is at that point right now. Eg:
http://www.bloomberg.com/news/articles/2015-06-29/swedish-po...
http://www.cnbc.com/2014/11/09/sweden-grapples-with-massive-...
http://blogs.wsj.com/economics/2015/06/03/riksbank-sees-incr...
[0] https://www.fdic.gov/regulations/resources/rates/#one
Deflation means that 1 unit of currency will be worth more tomorrow than it is today, hence it is explicitly rewarding keeping money instead of investing it.
So who is paying them now? And once they get passed on, the scenario will look like what i described, no?
I also do not understand why you bring up deflation.
Obviously, to stop people from running the bank. You can say it's a bad idea, but it's not like the reasoning is mysterious.
Why should a bank offer service for free? Yes, they might make money doing stuff with your money, but that shouldn't be a mandatory requirement for a bank.
It should be noted that the markets have been doing very well throughout this period, so it's not a matter of "stagflation", at least not yet.
As long as the expected return for investing my money is something way higher than zero, I expect to be able to lend them my money without paying for it. And as long as a bank can invest their customers money at good returns, they will want to attract money from customers.
If given a choice, I'd rather pay money for stronger guarantees on the safe keeping of my money, and guarantees that my money isn't being used for anything but safe keeping. I could put cash in a vault, I suppose, but I don't want cash. I'm perfectly fine with my money being all digital, I just want it kept safe and away from criminals regardless of whether they wear masks or three piece suits.
The new central printed money is flowing to the stock exchange and creating an epic housing bubble in Sweden.
The banks here used internal risk weights so created a loan on a million just cost them around 2000 that was fractions of fractions of cash needed to create housing loans.
Personally I think its housing market loan Ponzi scheme where the last ones in to loan when the prices no longer rise are set to loose.
http://www.euribor-rates.eu/
Euribor is the basic interest rate that European banks use to determine interest rates on savings and mortgages. A negative value basically means that you have to pay the bank if you want them to store your savings (which they are free to invest or lend). Banks will typically give you some extra percentage points over Euribor though, so as a customer you currently see somewhere around positive zero of interest on your bank savings in my country.