6 ms·

The primary purview of the state is geography (borders) and taxation (monetary policy). Allowing foreign money to be the primary medium of exchange directly cha

The primary purview of the state is geography (borders) and taxation (monetary policy). Allowing foreign money to be the primary medium of exchange directly challenges monetary policy.

bko 7y ago
> Allowing foreign money to be the primary medium of exchange directly challenges monetary policy. Who said anything about a primary medium of exchange? Should dollars be disallowed as well? How about bitcoin? Starbucks gift cards?
- gjulianm 7y ago
  Let's be honest, if Libra takes hold as Facebook wants it to, given the power Facebook already has over communications, ads and social networks, it very well could affect the capability of states to exert their own monetary policy. Not a single one of the examples you made had such a real possibility of being as big as Libra could be.
  - kortilla 7y ago
    It won’t. Germany already doesn’t have control of the monetary policy for the currency it uses (the Euro). Monetary policy != taxation.
    - gjulianm 7y ago
      It has control as Germany is part of the Eurozone, the ECB is subjected to the EU treaty, operating under its guidelines, and is accountable to the European Parliament, in which the people of Germany have a say. Maybe it is not as accountable as we wish it were, but it is far from what Facebook would be.
      - erikpukinskis 7y ago
        Is “a vote in” and “control” really the same thing?
        ivan_gammel 7y ago
        In case of Germany it’s very close to be the same thing.
      - squiggleblaz 7y ago
        Isn't the Bank of England privately owned? Or perhaps it merely was privately owned. If Facebook does this, they had better be prepared to be nationalised.
    - devcpp 7y ago
      EU has many checks and balances, is governed by Germany and other like-minded countries, and has given lots of guarantees as well as an option to leave. If Facebook decides to discuss on that level, maybe an actual agreement could come out of that.
      - tripzilch 7y ago
        Facebook can come and expect to discuss on the level of trust that a country gets when it has existed for less than 2 decades and has been treating its citizens/users like an authoritarian dictatorship surveillance state. There are a number of other parallels, and none of them put FB in a good light. It's not going to be a very amicable discussion.
    - insulanus 7y ago
      If the EU goes tits up, Germany will be using marks again before the month is out. The EU could never have been started if member states had to give full control of monetary policy to the EU Council.
  - bko 7y ago
    Facebook has a non controlling stake in Libra. Libra Foundation is an independent, not-for-profit membership organization. Do you feel a similar threat of non-profits that try to give financial opportunities to people around the world?
    - riking 7y ago
      Are you (1) employed by the Libra Foundation or Facebook, (2) in possession of a large Libra stake, or (3) duped by the marketing and in possession of a large amount of free time?
      - bko 7y ago
        1. No. I have a facebook account but I haven't posted in years 2. No. I don't think its available yet. Its not really meant to be a speculative investment since it's backed by a basket of stable currencies. Although it may be like a closed-end mutual fund where the investment could trade below or above net asset value. But I wouldn't recommend speculating on some price increase even if it takes off 3. No, I'm just interest in cryptocurrencies read the white paper [0]. I suggest you do the same. It's pretty interesting. I do have a fair bit of free time though [0] https://libra.org/en-US/white-paper/#introducing-libra https://libra.org/en-US/white-paper/#introducing-libra
        mehrdadn 7y ago
        Did they not lose you as soon as you read "blockchain"? Their blockchain neither has block nor chain as I seem to recall. If the company is already lying in their whitepaper, what exactly are you expecting from the real thing?
      - Smithalicious 7y ago
        Not everyone who disagrees with you is a paid shill. Responding to a legitimate argument with some kind of absurd accusation will always make you look like you lost the argument.
        7y ago
kortilla 7y ago
Taxation isn’t monetary policy. You can tax without even having your own currency. Monetary policy is entirely about currency control for inflation, etc.
AdrianB1 7y ago
See Montenegro, the country that has no own currency, but uses Euro: they have no particular problems because of this.
- insulanus 7y ago
  Montenegro has a population of about 600K. Its annual GDP is $12 billion. There are also small countries that are pegged to the US dollar. When you are a small-potatoes nation-state, and have a non-diversified or small economy, it is a great idea to use a larger, better established, currency. * It's more stable * Trade is easier * More than 3 banks accept your currency! The incentives of the nations controlling the euro are well known to Montenegro, and they trust that those countries will keep the euro stable. Libra is a whole different ball of wax. It's not just a currency. When you use it, you are tied to Facebook's terms of services, Facebook's desires, and Facebook's fate. Your individual citizens could be locked out of the economy for reasons that have nothing to do with your nation's laws. If Google and Apple wouldn't agree to use Facebook-dollars for all their transactions, I don't see why a company would agree to.
  - mikhailfranco 7y ago
    Also Ecuador uses the USD, with a GDP of ~$100bn. There's a big difference between having a currency pegged to another, and not actually having a currency at all, and using physical foreign currency for everyday transactions. Pegs can be broken and may be hedged with FX futures. The second situation is a much stronger existential commitment, which makes it more reliable and predictable. Reinventing a new national currency is a high barrier, which cannot be hedged directly in the FX markets (although sovereign CDS might be close enough).
  - erikpukinskis 7y ago
    I don’t think you are tied to FB’s TOS. Nor their fate. If FB went bankrupt, Libra would still operate? Not sure what you’re trying to get at.

The primary purview of the state is geography (borders) and taxation (monetary policy). Allowing foreign money to be the primary medium of exchange directly challenges monetary policy.

bko 7y ago

> Allowing foreign money to be the primary medium of exchange directly challenges monetary policy. Who said anything about a primary medium of exchange? Should dollars be disallowed as well? How about bitcoin? Starbucks gift cards?

gjulianm 7y ago
Let's be honest, if Libra takes hold as Facebook wants it to, given the power Facebook already has over communications, ads and social networks, it very well could affect the capability of states to exert their own monetary policy. Not a single one of the examples you made had such a real possibility of being as big as Libra could be.
- kortilla 7y ago
  It won’t. Germany already doesn’t have control of the monetary policy for the currency it uses (the Euro). Monetary policy != taxation.
  - gjulianm 7y ago
    It has control as Germany is part of the Eurozone, the ECB is subjected to the EU treaty, operating under its guidelines, and is accountable to the European Parliament, in which the people of Germany have a say. Maybe it is not as accountable as we wish it were, but it is far from what Facebook would be.
    - erikpukinskis 7y ago
      Is “a vote in” and “control” really the same thing?
      - ivan_gammel 7y ago
        In case of Germany it’s very close to be the same thing.
    - squiggleblaz 7y ago
      Isn't the Bank of England privately owned? Or perhaps it merely was privately owned. If Facebook does this, they had better be prepared to be nationalised.
  - devcpp 7y ago
    EU has many checks and balances, is governed by Germany and other like-minded countries, and has given lots of guarantees as well as an option to leave. If Facebook decides to discuss on that level, maybe an actual agreement could come out of that.
    - tripzilch 7y ago
      Facebook can come and expect to discuss on the level of trust that a country gets when it has existed for less than 2 decades and has been treating its citizens/users like an authoritarian dictatorship surveillance state. There are a number of other parallels, and none of them put FB in a good light. It's not going to be a very amicable discussion.
  - insulanus 7y ago
    If the EU goes tits up, Germany will be using marks again before the month is out. The EU could never have been started if member states had to give full control of monetary policy to the EU Council.
- bko 7y ago
  Facebook has a non controlling stake in Libra. Libra Foundation is an independent, not-for-profit membership organization. Do you feel a similar threat of non-profits that try to give financial opportunities to people around the world?
  - riking 7y ago
    Are you (1) employed by the Libra Foundation or Facebook, (2) in possession of a large Libra stake, or (3) duped by the marketing and in possession of a large amount of free time?
    - bko 7y ago
      1. No. I have a facebook account but I haven't posted in years 2. No. I don't think its available yet. Its not really meant to be a speculative investment since it's backed by a basket of stable currencies. Although it may be like a closed-end mutual fund where the investment could trade below or above net asset value. But I wouldn't recommend speculating on some price increase even if it takes off 3. No, I'm just interest in cryptocurrencies read the white paper [0]. I suggest you do the same. It's pretty interesting. I do have a fair bit of free time though [0] https://libra.org/en-US/white-paper/#introducing-libra https://libra.org/en-US/white-paper/#introducing-libra
      - mehrdadn 7y ago
        Did they not lose you as soon as you read "blockchain"? Their blockchain neither has block nor chain as I seem to recall. If the company is already lying in their whitepaper, what exactly are you expecting from the real thing?
    - Smithalicious 7y ago
      Not everyone who disagrees with you is a paid shill. Responding to a legitimate argument with some kind of absurd accusation will always make you look like you lost the argument.
      - 7y ago

kortilla 7y ago

Taxation isn’t monetary policy. You can tax without even having your own currency. Monetary policy is entirely about currency control for inflation, etc.

AdrianB1 7y ago

See Montenegro, the country that has no own currency, but uses Euro: they have no particular problems because of this.

insulanus 7y ago
Montenegro has a population of about 600K. Its annual GDP is $12 billion. There are also small countries that are pegged to the US dollar. When you are a small-potatoes nation-state, and have a non-diversified or small economy, it is a great idea to use a larger, better established, currency. * It's more stable * Trade is easier * More than 3 banks accept your currency! The incentives of the nations controlling the euro are well known to Montenegro, and they trust that those countries will keep the euro stable. Libra is a whole different ball of wax. It's not just a currency. When you use it, you are tied to Facebook's terms of services, Facebook's desires, and Facebook's fate. Your individual citizens could be locked out of the economy for reasons that have nothing to do with your nation's laws. If Google and Apple wouldn't agree to use Facebook-dollars for all their transactions, I don't see why a company would agree to.
- mikhailfranco 7y ago
  Also Ecuador uses the USD, with a GDP of ~$100bn. There's a big difference between having a currency pegged to another, and not actually having a currency at all, and using physical foreign currency for everyday transactions. Pegs can be broken and may be hedged with FX futures. The second situation is a much stronger existential commitment, which makes it more reliable and predictable. Reinventing a new national currency is a high barrier, which cannot be hedged directly in the FX markets (although sovereign CDS might be close enough).
- erikpukinskis 7y ago
  I don’t think you are tied to FB’s TOS. Nor their fate. If FB went bankrupt, Libra would still operate? Not sure what you’re trying to get at.