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A recent tweet from Matthew Yglesias made me smile: 'Tis the season for large cash withdrawals in anticipation of holiday tipping — Matthew Yglesias (@mattyglesias) December 17, 2015 Inspired, I've updated my December 2012 Merry Cashmas chart showing the annual Christmas and New Year's cash demand spike. See below. Tipping might certainly be one reason for the annual cash spike, but I'd bet if you look at data from Europe where tipping is not a tradition you'll still see a jump.  Because we can't anticipate all the random events that will arise when we travel long distances to meet our loved ones, we purchase insurance in the form of larger cash holdings. Thus you can see a consistent seasonal spike in currency in circulation in the weeks before Christmas. Those amounts falls heavily in January. Having returned to our regular schedules, insurance against uncertainty is no longer necessary so we redeposit our cash at the bank. The U.S. Christmas spike has gotten...

John Maynard Keynes and Harry Dexter White, who contributed to the design of the Bretton Woods system David Glasner's piece on the gold standard got me thinking about the Bretton Woods system, the monetary system that prevailed after WWII up until the early 1970s. There are many differences between Bretton Woods and the classical gold standard of the 1800s. My claim is that despite these differences, for a short period of time the Bretton Woods system did everything that the classical gold standard did. I'm using David's definition of a gold standard whereby the monetary unit, the dollar, is tied to a set amount of gold. This linkage ensures that there can never be an excess quantity of monetary liabilities in circulation—unwanted notes will simply reflux back to the issuer in return for gold. When most people criticize Bretton Woods, they say that it lacked such a linkage. A narrowing redemption mechanism For a gold standard to be in effect, a central bank's notes and...

January 1, 2021 Jessie Smith, who owns a dusty motel in Beowawe, Nevada, had to turn away customers yesterday. No vacancy, Smith told the recent arrivals, the first time she has uttered those words since she bought the motel twenty years ago. These days, the desert is swimming in cash... literally. Over the last six months, a booming business in illegal cash storage has sprung up in Nevada, New Mexico, and Arizona where analysts estimate that $30 billion worth of $100 notes have been hidden. By day, smugglers drive deep into the desert, SUVs loaded down with suitcases full of Ben Franklins. Once they've found an ideal spot, they wait till the sun goes down and frantically dig a hole, only to drive away the next morning with nothing but the cache's GPS coordinates and a drone or two to guard it. When asked about the sorts of people staying at her motel these days, Smith shrugs. "I don't ask who they are and they pay cash." This is life in the Great Deflation . What...

How much is a corporate vote worth? To answer this question, look no further than behemoth Google. One of Google's voting share costs $779, around 1.7% more than a non-voting share at $764. Why has a "voting premium" emerged in Google shares? How might the shape of this premium evolve? A bit of background first. The public can invest in one of two Google share classes: Class A shares, listed as GOOGL, or Class C shares, listed as GOOG. Class A shareholders benefit from one vote per share whereas Class C shareholders get no vote. Because a vote is the only difference between the two classes, we can infer that the Class A premium represents the value that investors attach to voting power. The total market cap ascribed to the 288 million or so Class A votes is $4.3 billion. (Note that Google has been recently renamed Alphabet). I've mapped out the history the Class A voting premium below: Since non-voting shares were first issued in 2014, voting shares have been worth as...