[paulmd]

FDIC insurance doesn't cover large balances (above 250k) so that's not free either.

If you're talking about holding a vault full of physical cash, that's not free either. It has to be physically secured in a building and someone wants to be paid for the building and the security.

All of which I said above. Holding cash isn't free at a macro scale, holding cash already has a negative return.

[thoughtstheseus]

Have you seen $100 million dollars? It can fit in the average closet. How macro are we talking? Any small town with a few banks could hold billions in physical cash. It’s not a problem.

[paulmd]

AFAIK the larger denominations are quite rare as they're only used for federal-reserve interbank transfers (which are almost entirely done digitally nowadays). Again, that's a solution that works for one entity, it doesn't work for the economy as a whole.

From an article:

* $1k bill: 165,372 in existence

* $5k bill: "fewer than 400 believed to exist", valued at significantly more than $5k

* $10k bill: "only a few hundred survive" (also valued at significantly more than face value)

* $100k bill: 42,000 ever printed and can only legally be used for transfers between federal reserve banks, illegal for private entities to hold

https://www.investopedia.com/6-famous-discontinued-and-uncom...

So no, not really enough physical large-denomination bills for everybody to hoard physical cash.

The FDIC commits to ensuring bank liquidity, it covers retail withdrawals, I don't think it's ever committed to printing specific combinations of bills to make it easy to hoard physical cash. In fact, they have already argued they don't need to, in order to discourage money laundering. The existing bills are mostly leftovers from the 1890s-1930s.

If they choose to give you a billion dollars in all 100s, well, sucks to be you. And again, they don't even really need to do that since only $250k per account is actually covered.

So I mean, to wit, have you ever seen 100 million dollars in a single bundle? Unless you work for the Federal Reserve doing inter-reserve settlement I doubt it, seeing as there’s only $165 million of $1k bills in existence. That would be over half of the $1k bills in existence and there's no other large bills in private hands in any significant quantities. Maybe you saw it as a movie plot point somewhere?

Regardless, not something that can be executed at scale. There are $21 trillion of treasures in private hands alone, there are only $165 million of $1k bills in existence.