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> ... no peg to anything they do. Libra is still a problem. They start with a basket of USD + Yen + EURs to start. This appeases governments, just for the re
by HashThis 7y ago
> ... no peg to anything they do.
Libra is still a problem. They start with a basket of USD + Yen + EURs to start. This appeases governments, just for the reason you mention "based on their currences".
...but Libra is designs that they can move away from them over time. It can move to revenue generating investments, like corporate bonds (like money markets do).
Libra can then wait until closer to countries defaulting on their national debt. The countries then start money printing at far higher rates. Their currencies drop in value (aka far higher inflation rates). Libra then shifts to corporate bonds and revenue generating assets.
This is good for citizens. It moves Libra from unsound money (USD + Yen + EURs) to sound money (asset backed & revenue generating assets). That makes Libra more powerful than bitcoin.
This becomes a strategic problem because it can cause a RUN on the national fiat currency, as Libra flees it. Libra then is infitely better than national's fiat currency, because Libra is asset backed. The US Dollar has about $0.03 worth of gold backing per $1.00 (after all of the money printing).
- bobthepanda 7y agoWhat would the assets generate revenue based on? If it‘s fiat currencies you still have exposure, if it‘s Libra you run the risk of currency panic and it‘s not dissimilar to a fiat currency panic except there‘s nothing really available to stop precipitous economic effects.
- HashThis 7y agoRight now, they don't generate revenue when the basket is only: USD + Yen + Euros. But it is designed so they can switch those out for Gov bonds, corporate bonds, real estate (REITs), etc.
- bobthepanda 7y agoGov bonds, corporate bonds, REITs, that today all pay USD, or Yen, or Euros, or what have you. So still based on fiat. Except this revenue basket just looks like an opaque, complex security, and we saw how well that turned out during the last financial crisis.
- ClumsyPilot 7y agoI would much rather have world using bitcoin than a global currency controlled by private cartel.
- erikpukinskis 7y agoYes, Bitcoin is relatively speaking a pure idea. It competes in the realm of other pure ideas. At least, if we are unmooring ourselves from national identity it is a clean break with new dangers and new opportunities. Libra is an idea AND a political entity, which feels like some mixture of status quo and new world which makes me uncomfortable.