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Piggybacking on this: What stops the Fed from doing something like this and then subsidizing it with negative rates on traditional notes? Disclaimer: not an e

Piggybacking on this: What stops the Fed from doing something like this and then subsidizing it with negative rates on traditional notes? Disclaimer: not an economist. This could be a really, really stupid idea, and it would clearly only work with literally the strongest world economies that are capable of charging entities to hold their money for them. But it could work well as a crisis basic income solution when everyone else moves to park their cash.

nickff 6y ago
The parent's proposal would cause a great deal of inflation, which would diminish demand for negative-rate notes. If someone wants to print money, they should just print money, not try to cover it up, as that will just prolong and worsen the eventual pain.
- yingw787 6y ago
  So...if nobody but the Fed or some other govt construct demands these notes...are we good...if the market says so...? I'm not saying this isn't insane, it is, but I don't think it's that much more insane than what's going on. Also for an explanation of QE I like this guy's video: https://vimeo.com/2606496 https://vimeo.com/2606496
- function_seven 6y ago
  I think that's yingw787's point. That as we get deeper into this crisis, the Fed's actions start to look more and more like "printing money", but with a veneer of fiscal^H^H^H^H^H^H monetary policy. The $2,001 notes at 0% is the absurd extreme of this path. (EDIT: Yeah, I meant monetary)
  - SilasX 6y ago
    Sorry if I’m slow, but, if true, I wish that point had been make explicit. That’s actually a good argument. As it stands now, that comment looks more like yet-another-pro-UBI post with a bizarre fantasy about the Fed breaking the law to make it happen, and I downvoted it on that basis. Edit: And I think you meant "veneer of monetary policy"? The argument would be that it's being framed as monetary policy even though it's substantively a fiscal policy, something the Fed is supposed to stay away from.
    - tren-hard 6y ago
      And that goes against the HN guidelines for down voting comments. You're just suppressing someone else's opinion because you don't agree with it, not because it is wrong or inappropriate smh
      - SilasX 6y ago
        No, downvote for disagree is within the guidelines [1]. Even so, I try to instead use the standard of "does not contribute to the discussion", which I think this qualifies as (under my earlier understanding of the comment) because it's off-topic hobby-horsing, made worse by proposing a bizarre mechanism without acknowledging the illegality. [1] https://news.ycombinator.com/item?id=11649750 https://news.ycombinator.com/item?id=11649750
    - function_seven 6y ago
      > Edit: And I think you meant "veneer of monetary policy"? The argument would be that it's being framed as monetary policy even though it's substantively a fiscal policy, something the Fed is supposed to stay away from. That's exactly what I meant. Fixed my comment, thanks.

nickff 6y ago

The parent's proposal would cause a great deal of inflation, which would diminish demand for negative-rate notes. If someone wants to print money, they should just print money, not try to cover it up, as that will just prolong and worsen the eventual pain.

yingw787 6y ago
So...if nobody but the Fed or some other govt construct demands these notes...are we good...if the market says so...? I'm not saying this isn't insane, it is, but I don't think it's that much more insane than what's going on. Also for an explanation of QE I like this guy's video: https://vimeo.com/2606496 https://vimeo.com/2606496
function_seven 6y ago
I think that's yingw787's point. That as we get deeper into this crisis, the Fed's actions start to look more and more like "printing money", but with a veneer of fiscal^H^H^H^H^H^H monetary policy. The $2,001 notes at 0% is the absurd extreme of this path. (EDIT: Yeah, I meant monetary)
- SilasX 6y ago
  Sorry if I’m slow, but, if true, I wish that point had been make explicit. That’s actually a good argument. As it stands now, that comment looks more like yet-another-pro-UBI post with a bizarre fantasy about the Fed breaking the law to make it happen, and I downvoted it on that basis. Edit: And I think you meant "veneer of monetary policy"? The argument would be that it's being framed as monetary policy even though it's substantively a fiscal policy, something the Fed is supposed to stay away from.
  - tren-hard 6y ago
    And that goes against the HN guidelines for down voting comments. You're just suppressing someone else's opinion because you don't agree with it, not because it is wrong or inappropriate smh
    - SilasX 6y ago
      No, downvote for disagree is within the guidelines [1]. Even so, I try to instead use the standard of "does not contribute to the discussion", which I think this qualifies as (under my earlier understanding of the comment) because it's off-topic hobby-horsing, made worse by proposing a bizarre mechanism without acknowledging the illegality. [1] https://news.ycombinator.com/item?id=11649750 https://news.ycombinator.com/item?id=11649750
  - function_seven 6y ago
    > Edit: And I think you meant "veneer of monetary policy"? The argument would be that it's being framed as monetary policy even though it's substantively a fiscal policy, something the Fed is supposed to stay away from. That's exactly what I meant. Fixed my comment, thanks.