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I see - so basically, this is a way for reducing the existing state apparatus into a symbol, and become a sort of client state. I'm assuming this means that Ba

I see - so basically, this is a way for reducing the existing state apparatus into a symbol, and become a sort of client state. I'm assuming this means that Banks basically need to operate with 100% reserve ratio, which makes it really difficult to provide loans esp. when dealing with a commoditized external currency. Worse yet, unlike Gold, the foreign nation can issue currency at will (well, essentially), to actors in your state, and basically run it as they like. It's the perfect state of limbo. Ecuador's case is interesting to say the least; the current US educated president, basically made the country's reserve bank answerable to the state, printed loads of money, had the currency replaced by USD, sold away the country's gold to Goldman Sachs, and granted Assange asylum. After the strange events surrounding last months event, it'd appear that Wikileaks itself is compromised. Money is really really strange.

ptaipale 10y ago
Client state? How come? As said, Brazilian government did it, and the state is still there, not anybody's client.
Kadin 10y ago
> I'm assuming this means that Banks basically need to operate with 100% reserve ratio No, not the case at all. You can do fractional reserve banking with a foreign currency as legal tender. Heck, you can even do it with gold as legal tender, which I always find ironic given how gold backing and the perceived evils of fractional reserve banking seem to go hand-in-hand, ideologically.
jimmywanger 10y ago
> Worse yet, unlike Gold, the foreign nation can issue currency at will (well, essentially), to actors in your state, and basically run it as they like. I'm having trouble parsing this statement. What do you mean actors in your state, and what do you mean run it as they like? There are two sort of orders of magnitude of money that I can sort of make out what you're talking about. One is bribe money, where you can give people money to do stuff that you want them to do. That's usually on the order of hundreds of thousands to millions, and it doesn't matter what currency that is. That should be a rounding error to sovereign government. The second is trade war money. The sort of thing where you spend lots and lots of money trying to destabilize an industry or mess with a country's economic stability. That sort of intervention is measured in the billions to tens of billions, and that also doesn't matter what currency it's denominated in. If a foreign country decides to enter into a trade/commodities war with you, for instance dumping steel to ruin your domestic steel business, that also doesn't matter what currency they do it in. > the current US educated president, basically made the country's reserve bank answerable to the state, printed loads of money, had the currency replaced by USD, sold away the country's gold to Goldman Sachs, and granted Assange asylum. Dollarization happened in 2016. The gold exchange sucre last existed in 1932. Ecuador seemed to have given up wikileaks in 2016. And what does the fact that the current president is educated in the US have to do with anything? You're conflating a bunch of events that happened over a long period of time and trying to draw a causal relationship out of them. Why?

ptaipale 10y ago

Client state? How come? As said, Brazilian government did it, and the state is still there, not anybody's client.

Kadin 10y ago

> I'm assuming this means that Banks basically need to operate with 100% reserve ratio No, not the case at all. You can do fractional reserve banking with a foreign currency as legal tender. Heck, you can even do it with gold as legal tender, which I always find ironic given how gold backing and the perceived evils of fractional reserve banking seem to go hand-in-hand, ideologically.

jimmywanger 10y ago

> Worse yet, unlike Gold, the foreign nation can issue currency at will (well, essentially), to actors in your state, and basically run it as they like. I'm having trouble parsing this statement. What do you mean actors in your state, and what do you mean run it as they like? There are two sort of orders of magnitude of money that I can sort of make out what you're talking about. One is bribe money, where you can give people money to do stuff that you want them to do. That's usually on the order of hundreds of thousands to millions, and it doesn't matter what currency that is. That should be a rounding error to sovereign government. The second is trade war money. The sort of thing where you spend lots and lots of money trying to destabilize an industry or mess with a country's economic stability. That sort of intervention is measured in the billions to tens of billions, and that also doesn't matter what currency it's denominated in. If a foreign country decides to enter into a trade/commodities war with you, for instance dumping steel to ruin your domestic steel business, that also doesn't matter what currency they do it in. > the current US educated president, basically made the country's reserve bank answerable to the state, printed loads of money, had the currency replaced by USD, sold away the country's gold to Goldman Sachs, and granted Assange asylum. Dollarization happened in 2016. The gold exchange sucre last existed in 1932. Ecuador seemed to have given up wikileaks in 2016. And what does the fact that the current president is educated in the US have to do with anything? You're conflating a bunch of events that happened over a long period of time and trying to draw a causal relationship out of them. Why?