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> I do see value in a crypto that's pinned at a weighted average of every single currencies' worldwide weight, but it's a perfectly stable currency If every go

by bko 6y ago

> I do see value in a crypto that's pinned at a weighted average of every single currencies' worldwide weight, but it's a perfectly stable currency If every government in the world is printing money like crazy, how is this "stable". In the US, 23% of the money supply was created in the last year, with no visible inflation (excluding asset prices, home, energy, etc). God knows what it'll be 5 years from now What has been "stimulated" by the US creating 12 trillion in new asset besides re-inflating stock prices? It reminds me of a joke about a group being really hungry so deciding to slice their pizza into 10 slices as opposed to 8. Money is supposed to be a unit of account. I think you can try to play games with it but in the end you're messing with complex systems with a high probability of creating unintended consequences (e.g. credit crisis, bail out, hyperinflation etc).

vkou 6y ago
> If every government in the world is printing money like crazy, how is this "stable". It's stable because during a recession, as loans are closed out or default or just don't get issued, money gets destroyed/created slower. The government may be printing money, but fractional reserve banks aren't. This is a point on which most people who talk about printing presses are completely ignorant of.
- bko 6y ago
  Maybe there are fewer loans because business prospects are worse. By every measure of money supply, the amount has increased. Again, its a complicated system. Playing games is dangerous, especially when everything is politicized and no one is held accountable for their actions.
dlp211 6y ago
If the dollars are borrowed or printed in exchange for collateral, no value has been destroyed, just dollars have been issued to account for that value. Not all newly printed dollars are the same, and this idea that M1/M2 volume is important to determine inflation is an outdated way of thinking. What the US has "stimulated" is preventing the economy from going into a recession. There are many businesses that are open today because of the money the US gov't has put into the economy. There are landlords that have been paid because of the money put into the economy. And the US economy is forecasted to have over 6% growth this year. Don't conflate the economy doesn't seem like it's booming/stimulated with the money the US gov't has pumped into the economy has done nothing. I know I can't prove a counterfactual, but if we had done nothing, the US would not IMO be fairing so well right now.
- bko 6y ago
  $12 trillion Take a look at where the money went. Buying $800 billion of mortgage backed securities and 1.96 trillion in long term treasuries. A lot of other line items. 1.54 trillion in Loan and Grant Programs. You can argue that these somehow all of these trickled down to keeping businesses open, as perfectly designed by the masters of the universe that have only our interests at heart, but I'm skeptical. I personally think a lot of these were designed to reinflate asset prices for the already wealthy capital holders. Why is it that asset prices re-inflated to pre-covid levels? Is the future prospects of these enterprises somehow much higher than pre-covid? How does this make sense? https://www.covidmoneytracker.org/ https://www.covidmoneytracker.org/
  - dlp211 6y ago
    I don't understand your argument, if asset prices are what they were pre-covid, then doesn't that represent a stabilization of the economy, not some sign of significant growth in the future. Also, the stock market is not the economy. Those treasuries are what allowed us to send money to people, to subsidize student loan interest, to fund extended UI benefits, to fund Operation Warp Speed, to purchase 100's of millions of doses of vaccines. There are valid critiques of our system, free markets, capitalism, and even some modicum of truth that the government does a lot to reward already successful people, but your pushing a bunch of rhetoric that is borderline conspiracy and not really backing it up an understanding of how the economy works.
35fbe7d3d5b9 6y ago
> If every government in the world is printing money like crazy, how is this "stable". It's not stable for most governments, and they risk an inflationary crisis if they go too far. But the US government is a bit different: the dollar is backed up on one side by Saudi oil exports and OPEC agreements to reinvest profits into US Treasury bonds. And on the other side is the Fifth Fleet.
- whatshisface 6y ago
  How exactly does the Fifth Fleet back the dollar?
  - 35fbe7d3d5b9 6y ago
    Ask Saddam Hussein, who tried to price Iraqi oil in Euros in 2000. Or Gaddafi, who was tolerated by western powers until he tried to introduce the pan-African gold Dinar and encourage oil producing nations to de-dollarize in favor of it.
    - whatshisface 6y ago
      Is it widely believed among world leaders that the US will invade if they do anything that would harm the USD?
      - 35fbe7d3d5b9 6y ago
        I mean, I don't have direct knowledge of what world leaders believe, so I can't really answer that. But the US consistently presents a carrot/stick model for the dollar: if you're a country and you play ball – price your exports in dollars, invest in US government debt – you find access to US and other Western military equipment and training. That's why US weapons are being used in the Yemeni civil war. Refuse to play along and you'll pay the price. It may not be something as dramatic as an invasion, though – sanctions don't spill American blood and can be very effective in crippling economies. Chávez wanted to kill the dollar and move to a basket of currencies and gold; now, Maduro is letting banks open local accounts and transfer money in dollars.
programmarchy 6y ago
> with no visible inflation Inflation lags printing and the lag is longer when the velocity of money is slow, like it is now. Once people start spending again, the inflation will be visible.

by bko 6y ago

vkou 6y ago

> If every government in the world is printing money like crazy, how is this "stable". It's stable because during a recession, as loans are closed out or default or just don't get issued, money gets destroyed/created slower. The government may be printing money, but fractional reserve banks aren't. This is a point on which most people who talk about printing presses are completely ignorant of.

bko 6y ago
Maybe there are fewer loans because business prospects are worse. By every measure of money supply, the amount has increased. Again, its a complicated system. Playing games is dangerous, especially when everything is politicized and no one is held accountable for their actions.

dlp211 6y ago

If the dollars are borrowed or printed in exchange for collateral, no value has been destroyed, just dollars have been issued to account for that value. Not all newly printed dollars are the same, and this idea that M1/M2 volume is important to determine inflation is an outdated way of thinking. What the US has "stimulated" is preventing the economy from going into a recession. There are many businesses that are open today because of the money the US gov't has put into the economy. There are landlords that have been paid because of the money put into the economy. And the US economy is forecasted to have over 6% growth this year. Don't conflate the economy doesn't seem like it's booming/stimulated with the money the US gov't has pumped into the economy has done nothing. I know I can't prove a counterfactual, but if we had done nothing, the US would not IMO be fairing so well right now.

bko 6y ago
$12 trillion Take a look at where the money went. Buying $800 billion of mortgage backed securities and 1.96 trillion in long term treasuries. A lot of other line items. 1.54 trillion in Loan and Grant Programs. You can argue that these somehow all of these trickled down to keeping businesses open, as perfectly designed by the masters of the universe that have only our interests at heart, but I'm skeptical. I personally think a lot of these were designed to reinflate asset prices for the already wealthy capital holders. Why is it that asset prices re-inflated to pre-covid levels? Is the future prospects of these enterprises somehow much higher than pre-covid? How does this make sense? https://www.covidmoneytracker.org/ https://www.covidmoneytracker.org/
- dlp211 6y ago
  I don't understand your argument, if asset prices are what they were pre-covid, then doesn't that represent a stabilization of the economy, not some sign of significant growth in the future. Also, the stock market is not the economy. Those treasuries are what allowed us to send money to people, to subsidize student loan interest, to fund extended UI benefits, to fund Operation Warp Speed, to purchase 100's of millions of doses of vaccines. There are valid critiques of our system, free markets, capitalism, and even some modicum of truth that the government does a lot to reward already successful people, but your pushing a bunch of rhetoric that is borderline conspiracy and not really backing it up an understanding of how the economy works.

35fbe7d3d5b9 6y ago

> If every government in the world is printing money like crazy, how is this "stable". It's not stable for most governments, and they risk an inflationary crisis if they go too far. But the US government is a bit different: the dollar is backed up on one side by Saudi oil exports and OPEC agreements to reinvest profits into US Treasury bonds. And on the other side is the Fifth Fleet.

whatshisface 6y ago
How exactly does the Fifth Fleet back the dollar?
- 35fbe7d3d5b9 6y ago
  Ask Saddam Hussein, who tried to price Iraqi oil in Euros in 2000. Or Gaddafi, who was tolerated by western powers until he tried to introduce the pan-African gold Dinar and encourage oil producing nations to de-dollarize in favor of it.
  - whatshisface 6y ago
    Is it widely believed among world leaders that the US will invade if they do anything that would harm the USD?
    - 35fbe7d3d5b9 6y ago
      I mean, I don't have direct knowledge of what world leaders believe, so I can't really answer that. But the US consistently presents a carrot/stick model for the dollar: if you're a country and you play ball – price your exports in dollars, invest in US government debt – you find access to US and other Western military equipment and training. That's why US weapons are being used in the Yemeni civil war. Refuse to play along and you'll pay the price. It may not be something as dramatic as an invasion, though – sanctions don't spill American blood and can be very effective in crippling economies. Chávez wanted to kill the dollar and move to a basket of currencies and gold; now, Maduro is letting banks open local accounts and transfer money in dollars.

programmarchy 6y ago

> with no visible inflation Inflation lags printing and the lag is longer when the velocity of money is slow, like it is now. Once people start spending again, the inflation will be visible.