NY times again telling people it’s better to own nothing.
“Save” 133k over 10 years, but throw all the rest of your housing money directly down the toilet. Can’t sell a rented apartment when you no longer need it, so even if the house doesn’t appreciate, you still come out far ahead with buying in most situations.
Plus you never stop paying for rent, but eventually you stop paying the mortgage.
It’s like saying we stole your stock, and then it went up, so now we can afford to pay back what your shares used to be worth. No you cannot have the shares back, only their price from when we crashed the crypto market.
Convenient for who? The people who orchestrated the theft are going to prison. The people who came in to pick up the pieces are the ones who were able to claw back the money to pay back the victims.
Yeah, FTX stole customer investments, sold them, then invested that cash in other stuff and hand out cash to executives. Some of it was traced to specific people (including SBF and his parents), and the restructuring officers clawed that back. Some of the investments paid off, some didn't, but the end result was that there was enough to repay people based on what things were worth on the bankruptcy petition date.
Monero is the way to handle this. The fees are stupid low and it settles within 20 minutes anywhere on planet earth. Oh, and at least as of now, it is totally untraceable, and only the sender and receiver ever know the payment even occurred.
This could work if there are reliable exchanges already available in local currency on both sides, and if both sides have bank accounts and the technical know-how to use exchanges. However, if Monero were to become a large scale method of remittance transfers, then Monero could be overvalued in exchanges in source countries and undervalued in exchanges in destination countries, especially in situations where the currencies are not freely convertible. With P2P exchanges this situation may become even more exaggerated.
Eventually HFT traders may catch on and level the market, but this would essentially mean a transfer of wealth from the masses sending remittances to a few HFT traders.
My point is, though sure it works fine in limited situations in strong economies (where there are liquid, freely exchangable fiat currencies and fair exchanges with low fees), it is a lot more complicated than it seems to use it at such a scale or in countries with underdeveloped economies.
this would essentially mean a transfer of wealth from the masses sending remittances to a few HFT traders.
Compared to a frictionless world, this is sub optimal. But as you and the article established, there are frictions that currently result in a tranfer of wealth at a 6% rate of transfer volume which could very well be greater than the future equilibrium you posit.
I think that there are options that could be implemented at scale faster and simpler compared to crypto token exchanges. But any individual current getting hit with high transfer fees could benefit immediately if they know about and learn how to use something like monero.
There may be some situations where this makes a lot of sense, particularly involving currency manipulation. For example, in Argentina, the official exchange rate was much less favorable than the actual (black market) exchange rate. Monero could enable someone to sell at the more favorable exchange rate locally, rather than relying the transfer provider in the source country to do it.
However, it's important to consider potential market effects if this is done at scale. For some people, it could work, but probably not yet on such a large scale.
There's at least a decent chance that Monero may actually be a better store of value than the destination currency would be and the receiver might just choose to keep it in Monero instead of converting it to their local currency. I'm thinking places like Zambia or Zimbabwe might be some examples. Perhaps Argentina and Venezuela as well. I think a peer-to-peer exchange on both ends would be the better option since then you don't have to go through all that KYC crap and be asked tons of questions and treated like a criminal for just wanting to send money to your family members. So you would purchase Monero peer-to-peer in your country send it to them and if they need to exchange it when they get it they can choose when to do so and how much to convert.
There's at least a decent chance that Monero may actually be a better store of value than the destination currency would be and the receiver might just choose to keep it in Monero instead of converting it to their local currency.
That could make sense if Monero was a widely accepted currency for goods and services in the destination country. However, as far as I know, it usually needs to be converted to fiat currency for this.
So you would purchase Monero peer-to-peer in your country send it to them and if they need to exchange it when they get it they can choose when to do so and how much to convert.
Sure, P2P is the ideal without KYC, but if used at scale, this is going to eventually lead to an increase in value of Monero in source countries and a decrease in destination countries, especially since P2P exchanges are usually local in nature and less liquid than centralized exchanges. There would be heavy sell-side pressure in these P2P exchanges, whereas likely not nearly as many people would be buying Monero there. The spread between the buy price in developed countries and the sell price in developing economies could exceed 6%.
Generally, the peer-to-peer rate is about 10% higher than the KYC rate. So if you buy Monero with KYC in your country and then send it to whoever and they sell it peer-to-peer, they will generally get about 10% above the market price. Cash by mail or cash in person are going to be the cheapest ways simply because there aren't online platforms involved that can reverse the transaction.
I'm sure someone else can do a much, much better explanation than I can, but... As I understand it, it comes from the perception that inflation is driven by a "too much demand" problem (ie, too much money in the system chasing the same amount of goods), and by raising interest rates they discourage spending and encourage saving, both serving to reduce demand.
Obviously there are valid questions about whether raising interest rates to deal with a "not enough supply" problem actually helps or causes more harm - and given that the current inflation was initiated by Russia's invasion of Ukraine, which resulted in supply disruptions. The problem was not a surplus of money, but a deficit of goods. And, of course, a lot of things most hit by inflation are impossible to meaningfully reduce demand for, like food and electricity.
I have suspected for a while that raising interest rates to deal with inflation is largely a "when all you have is a hammer, everything looks like a nail" situation: the Bank of England only has one tool - changing interest rates - so when faced with a problem, the only thing they can do is raise or lower interest rates.
If it did work that way, it might be all right. But you're forgetting that the banks only have a like 5% reserve requirement. So for every thousand dollars they get in the bank from an account, they can lend out 950 more. And they can do this again and again until it hits zero, which is about 9 times. So you end up turning $1,000 into About 9,000.
That’s interesting. I don’t really understand the bénef of a central bank digital currency. However, I could see some real improvements from stocks being tokenized.
I don’t really understand the bénef of a central bank digital currency.
It benefits the 1% of the population by controlling all the rest of us. It's a two-tier system (retail CBDCs and wholesale CBDCs) and this is something that is rarely mentioned in mainstream articles.
Retail CBDCs will be linked to your digital ID and your digital wallet, and even tho the implementation may differ from country to country (i.e. Sweden's e-krona vs China's digital Yuan), the thing that will be common is that a centralised entity, will have total control of your digital wallet, including your ID & money.
When the conversation is about wholesale CBDCs, the talk is about how to make things easier for bank interoperability as well as how to facilitate the super-rich.
Unfortunately, the rediscovery of private money along with the hobbling of the financial regulation put into place after the gold standard brought us into the great depression means that the least scrupulous peopkr in finance have a lot of power to try and make fetch happen.
The recent resurgence in crypto is owed entirely to the coordinated lobbying to tie such assets more closely into legitimate financial institutions, making it easier to dupe the working class into putting some of their life savings into the MLM ‘s for dudes.
While this article does a pretty poor job at it, I do think it is important for a financial community to call out that much like how MLM’s use the veneer of legitimacy granted by the government not considering them pyramid schemes to convince people to pay up these people have successfully lobbied the government to get added to these legitimate financial platforms to draw in more exit liquidity after NFT’s fell apart as a way to do that.
Maybe PayPal in-house balances for payments where it's accepted? That's a pretty small network (by comparison) and, really, if PayPal is your least-evil option you may as well either suck off the other corporations or suffer the inconvenience of cash.
I got burnt personally by them but even if I hadn’t they are among the least ethical options. There are some vendors selling products I would like to buy but they accept paypal exclusively, so I walk.. and go without. Recently I have encountered some small brick and mortar shops/cafes that use “Zettle”. #Zettle is paypal. So if I see Zettle and they don’t take cash, I walk out. They share data with over 600 corporations so I will not allow Paypal to serve as a payment processor of my credit or debit card. Paypal are rotten to the core scumbags. They have some sneaky tricks for keeping people’s money under the guise of AML/KYC/anti-fraud, even though they are not a bank and escape those regulations anyway. It’s no surprise Elon Musk and Peter Thiel were involved with the founding of that company.
Exactly; I view them as the worst of the lot. But, like gasoline for my car and biometrics on my driver's license and passport, I end up holding my nose because I know that - effectively - there is no clean, convenient way to circumvent them. And paypal - I use it for business transactions when I have to. Not because I like them, but because - for a business my size - there is no other way to take a payment remotely that doesn't carry ridiculous fees and minimums.
I never have to use PayPal. Goods and services my life depends on can all be bought without PayPal. If a hospital emergency room were to only accept PayPal/Zettle, they would treat me then I would simply refuse to pay the bill until they change their payment terms. It has been over a decade since I made a PayPal transaction. Exceptionally, PayPal may have processed some of my card transactions without my knowledge (before I knew what Zettle was), but if I knew I would have walked.
I spoke to a small cafe owner who only accepts Zettle, no cash. He was the owner and cashier. He said Zettle was the cheapest for him. But as an ethical consumer I have choices and price is low priority. I don’t have to buy my coffee from him. In some cases I have managed to compel a cashless shop to accept my cash. If I have exact change or their staff has change, the staff will use their own personal payment card and take cash from me. I normally boycott cashless brick and mortar shops, but sometimes I do an experiment of forcing cash on them. But in the case of Zettle that’s not an option because PayPal still profits from the transaction even if PayPal does not obtain or profit from my data.
I don’t know your situation with gas or how trapped you are, but if you must buy gas you can probably boycott Chevron and ExxonMobil and buy from one of the other lesser evils. Or if you have a diesel engine you can do what a friend does and collect waste oil and convert it to bio diesel.
I really do boycott Exxon - at least when it's branded. In 35 years - since the Valdez spill - I've bought 1 gallon of gasoline from Exxon, and that was because I needed that much to get to another station without running out of fuel. It's a trivial exclusion, though, as their drilling and refinery operations are so large that it's likely I'm purchasing from them, or BP, (or Chevron). I don't know of a major supplier who isn't tainted by some part of the process. And I'm not rich enough to have the luxury of selection most of the time.
According to MMT (Modern Monetary Theory) governments sell debt in the form of bonds in order to create a stable store of value for investors. They feel safer making risky investments if they know that some if their money is safe. Governments, particularly governments with fiat [1] currencies, are extremely safe borrowers. You can more or less guarantee that their bonds will be paid back. Because if a government wants to pay that bond back they are incapable of running out of money. So governments could buy their bonds back and forgive them but it would defeat their actual purpose. I read about MMT in The Deficit Myth. It's an interesting book and worth the read id you want to a different perspective on monetary theory.
Fiat in this case means the currency is not based on any asset. Common currency basing assets are gold, silver, petroleum, and cryptography.
About 22 percent of the US government’s national dept is money one department of the government owes another part.
Offhand, the majority of the government dept is in government lines and bonds. While the government can buy back its own bonds, people tend not to sell said bonds for less than their worth and so you would need more money than what it takes to just pay off the bond. Moreover, said bonds are generally low interest, and so often get smaller with inflation.
In addition, most banks, mutual funds, hedge funds, large corporations, etc... tend to have rules that say that there is only so much financial risk they can be exposed to, so if they want to make a high risk high reward bet, they need to have a certain amount of low risk of investments aswell. Government bonds are seen as about the lowest risk investments possible, and so can often be more valuable than just the money the bond itself is actually for when used as the bedrock upon which the modern risk based US financial system is built on.
Given that bonds have an limited lifespan, it’s almost always cheaper for the government to let it time out then to buy it back.
Similarly, a not insignificant part of it is in pentions. Basically when you work for the government your paycheck says you get X part of your pay now, and Y when you retire. The idea is that no matter how bad you are at managing money or if you get a bunch of medical dept or such, you have a guaranteed retirement fund. Meanwhile, from the governments perspective, thanks to inflation Y is going to be worth a lot less real money when you take it out then if they gave it to you now. Y is dept, and since the government employs a lot of people, Y is actually quite a lot of dept.
Print Money (immediate, but causes inflation and can wreck your economy if you do it too much/fast)
Sell bonds (debt) (Immediate, but need to be paid back with interest)
Bonds by default have a period (10Y, 20Y, etc) on them, after which the issuer pays the whole amount back (and they've been paying interest the entire time)
The public debt is really just a bunch of these bonds, and they're constantly cycling through. If the government doesn't want to use tax money or print money to pay them off, they just issue new bonds, and use that money to pay for the previous bonds.
Sometimes the government wants to push the debt down, so they use taxes or printed money to buy the bonds and "cancel" them. Governments don't always run deficits so this happens automatically when they have a surplus.
So to answer your original question, the reason they may not want to, is that they may want to spend the tax money elsewhere, or they may not want to deal with the problems of printing so much money regarding inflation.
It’s worth noting that a solid link between money printing and inflation has to my knowledge never been demonstrated outside of hyperinflation scenarios. The chief problem being that there are far to many inputs to inflation and deflation to solidly say how much influence some of the smaller ones like total money supply have.
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