On a gold standard you can literally hoard it in a vault without losing value. Without inflation it’s actually not a terrible idea because you have high liquidity, you don’t have to sell assets to free up cash. You’d still buy assets but only the ones you actually needed or wanted rather than as a hedge against inflation.

What’s wrong with investing in productive machines (or productivity enhancements) as a hedge against inflation instead of just burying the talents and letting them go to waste?

I don't think it's a revelation that lots of ultra wealthy people hide money in offshore bank accounts, as well as other means.

I'd say many of them are literally hoarding it.

If it's in a bank account, it's not being hoarded. It's being loaned out and the people who get the loans are spending it on houses, businesses, automobiles, etc...

> If it's in a bank account, it's not being hoarded. It's being loaned out and the people who get the loans are spending it on houses, businesses, automobiles, etc.

This presupposes banks actually loan it out — which doesn't always happen, for example if lending officers are gun-shy or underwriting policies get too tight because senior management is gun-shy.

Banks aren't charities. It costs a good bit of money to keep deposits, on top of the interest expense. (deposit insurance, overhead, staff, etc...)

I think it's highly unlikely that these overseas banks that the rich use are doing nothing but sitting on their money and this practice accounts for all the purported "hoarding".

From the St. Louis Federal Reserve: "Lending growth slowed to zero during the 1990-91 and 2001 recessions but recovered after a few quarters. In contrast, during the Great Recession (2007-09), loan growth became strongly negative and remained so for almost four years."

https://research.stlouisfed.org/publications/economic-synops...

Yes, I understand that the growth of new loan originations experiences vicissitudes based on general economic conditions.

That's not my point.

My point is that loan growth slowing is not the rich hoarding all the money. They don't hoard. Hoarding is not only unprofitable, it costs money.