5 ms·

Never understood this counter argument. It sounds like "oh you think crypto is based on nothing? well it's true, but you're a hypocrite because you also use som

by daenz 4y ago

Never understood this counter argument. It sounds like "oh you think crypto is based on nothing? well it's true, but you're a hypocrite because you also use something based on nothing." Is it supposed to convince people to adopt it or else they are hypocrites? When has that ever worked?

scottiebarnes 4y ago
It's not really a counter argument, its just a delightfully ironic statement. But it does reveal to people that "value" is a human construct. A central bank can create infinite money out of thin air, but we never stop to think about that.
- daenz 4y ago
  >but we never stop to think about that. Why do you think people don't know about it or haven't thought about it? Is there some predicted outcome in the world—that is absent—that suggests that people don't know that "value" is a human construct?
  - scottiebarnes 4y ago
    It takes a lot of time and education to understand the necessary parts. A bit of economics, a bit of history, a bit of social psychology. Most people are living their lives day to day, and never stop to think about what money is. We just use it, and never stop to think about why paper bills are worth anything (or that our entire networths are basically digits in a MySQL database these days).
    - daenz 4y ago
      Let me make my question more clear: You're assuming people have never thought about it, and I'm asking why you believe that they have never thought about it.
      - scottiebarnes 4y ago
        I'm assuming because the average person is a day laborer repeating physical tasks. Their biggest concern is having enough money to survive for the month. I supposed I could be wrong and that my taxi driver is indeed well informed about the nuances of monetary policy and monetary history.
        daenz 4y ago
        >I supposed I could be wrong and that my taxi driver is indeed well informed about the nuances of monetary policy and monetary history. Why are you strawmanning my argument? I didn't ask if you believe your average person knows "the nuances of monetary policy", I asked why you believe people haven't thought about "value" being a human construct. Everyone I've talked to about the subject acknowledges that they've thought about it before. Some go as far as to roll their eyes, like "oh great, this conversation again" because it's so played out. So I think you're seriously underestimating who hasn't heard of these ideas. Go ahead, ask your next uber driver why money has value, and see if the response isn't something along the lines of "because people believe it has value." It's not a difficult concept only understood by experts.
- arcticbull 4y ago
  > But it does reveal to people that "value" is a human construct. A central bank can create infinite money out of thin air, but we never stop to think about that. This is not where money comes from.
  - scottiebarnes 4y ago
    What Is a Central Bank? A central bank is a financial institution given privileged control over the production and distribution of money and credit for a nation or a group of nations. In modern economies, the central bank is usually responsible for the formulation of monetary policy and the regulation of member banks. https://www.investopedia.com/terms/c/centralbank.asp https://www.investopedia.com/terms/c/centralbank.asp
    - deleted 4y ago
      [deleted]
    - arcticbull 4y ago
      The point I was making is not that the central banks don't 'create money' per se (they create some kinds of money, bank reserves to be precise), but that in a modern, fractional-reserve banking system, the money supply itself is created not by the central banks but rather by retail banks. When you borrow money to buy a house for instance, that's the point at which money is created. Money isn't pushed into the economy. Money is pulled when loans are taken out, from retail institutions. These loans are constantly repaid meaning that the money supply is controlled by the quantity of origination of loans and the rate of repayment of existing loans. The Fed controls the circulating supply by adjusting the demand for new debt, by setting interest rates. Generally even QE, the Fed creates reserves and swaps them for liquid assets like treasuries. These reserves then collateralize additional lending. [1] [1] https://www.forbes.com/advisor/investing/quantitative-easing-qe/ https://www.forbes.com/advisor/investing/quantitative-easing...
- notahacker 4y ago
  > A central bank can create infinite money out of thin air, but we never stop to think about that. But central bankers think about it on a daily basis. Christine Lagarde has certainly paid a lot of attention to whether the amount of money the system demands is about right or whether an interest rate rise is needed to stop the economy overheating, whether there's enough liquidity and financial control the commercial banking system the central bank feeds into, what the change in the shape of a bond yield curve says about investors longer term expectations of for money, and what the side effects of all this money coming in is on the rest of the economy, and whether a particular downturn is better ameliorated by fiscal policy. Thinking about this is literally why her job exists. People LOLing at "fiat" currency coming from nothing whilst rushing to buy the newest token invented from nothing (as a wealth generation exercise for its creators) that isn't supported by monetary policy (or redeemable as legal tender), not so much.
  - yucky 4y ago
    >But central bankers think about it on a daily basis. Yes, and it is them we have to thank for the massive inflation too. So either they want the highest inflation in 40 years, or they are inept.
    - notahacker 4y ago
      It's also them you have to thank for 40 years of not having massive inflation, which was a pretty regular thing in earlier times. (And yes, they absolutely do prefer the high inflation outcome from a fuel supply shock following a COVID shock to the raise interest rates and crash the global economy like 2008 outcome. That much is a policy choice)
      - yucky 4y ago
        Why does middle class wealth destroying inflation go hand in hand with fractional reserve banking?
        notahacker 4y ago
__m 4y ago
It’s not supposed to convince them, it’s just correcting a false premise.

by daenz 4y ago

scottiebarnes 4y ago

It's not really a counter argument, its just a delightfully ironic statement. But it does reveal to people that "value" is a human construct. A central bank can create infinite money out of thin air, but we never stop to think about that.

daenz 4y ago
>but we never stop to think about that. Why do you think people don't know about it or haven't thought about it? Is there some predicted outcome in the world—that is absent—that suggests that people don't know that "value" is a human construct?
- scottiebarnes 4y ago
  It takes a lot of time and education to understand the necessary parts. A bit of economics, a bit of history, a bit of social psychology. Most people are living their lives day to day, and never stop to think about what money is. We just use it, and never stop to think about why paper bills are worth anything (or that our entire networths are basically digits in a MySQL database these days).
  - daenz 4y ago
    Let me make my question more clear: You're assuming people have never thought about it, and I'm asking why you believe that they have never thought about it.
    - scottiebarnes 4y ago
      I'm assuming because the average person is a day laborer repeating physical tasks. Their biggest concern is having enough money to survive for the month. I supposed I could be wrong and that my taxi driver is indeed well informed about the nuances of monetary policy and monetary history.
      - daenz 4y ago
        >I supposed I could be wrong and that my taxi driver is indeed well informed about the nuances of monetary policy and monetary history. Why are you strawmanning my argument? I didn't ask if you believe your average person knows "the nuances of monetary policy", I asked why you believe people haven't thought about "value" being a human construct. Everyone I've talked to about the subject acknowledges that they've thought about it before. Some go as far as to roll their eyes, like "oh great, this conversation again" because it's so played out. So I think you're seriously underestimating who hasn't heard of these ideas. Go ahead, ask your next uber driver why money has value, and see if the response isn't something along the lines of "because people believe it has value." It's not a difficult concept only understood by experts.
arcticbull 4y ago
> But it does reveal to people that "value" is a human construct. A central bank can create infinite money out of thin air, but we never stop to think about that. This is not where money comes from.
- scottiebarnes 4y ago
  What Is a Central Bank? A central bank is a financial institution given privileged control over the production and distribution of money and credit for a nation or a group of nations. In modern economies, the central bank is usually responsible for the formulation of monetary policy and the regulation of member banks. https://www.investopedia.com/terms/c/centralbank.asp https://www.investopedia.com/terms/c/centralbank.asp
  - deleted 4y ago
    [deleted]
  - arcticbull 4y ago
    The point I was making is not that the central banks don't 'create money' per se (they create some kinds of money, bank reserves to be precise), but that in a modern, fractional-reserve banking system, the money supply itself is created not by the central banks but rather by retail banks. When you borrow money to buy a house for instance, that's the point at which money is created. Money isn't pushed into the economy. Money is pulled when loans are taken out, from retail institutions. These loans are constantly repaid meaning that the money supply is controlled by the quantity of origination of loans and the rate of repayment of existing loans. The Fed controls the circulating supply by adjusting the demand for new debt, by setting interest rates. Generally even QE, the Fed creates reserves and swaps them for liquid assets like treasuries. These reserves then collateralize additional lending. [1] [1] https://www.forbes.com/advisor/investing/quantitative-easing-qe/ https://www.forbes.com/advisor/investing/quantitative-easing...
notahacker 4y ago
> A central bank can create infinite money out of thin air, but we never stop to think about that. But central bankers think about it on a daily basis. Christine Lagarde has certainly paid a lot of attention to whether the amount of money the system demands is about right or whether an interest rate rise is needed to stop the economy overheating, whether there's enough liquidity and financial control the commercial banking system the central bank feeds into, what the change in the shape of a bond yield curve says about investors longer term expectations of for money, and what the side effects of all this money coming in is on the rest of the economy, and whether a particular downturn is better ameliorated by fiscal policy. Thinking about this is literally why her job exists. People LOLing at "fiat" currency coming from nothing whilst rushing to buy the newest token invented from nothing (as a wealth generation exercise for its creators) that isn't supported by monetary policy (or redeemable as legal tender), not so much.
- yucky 4y ago
  >But central bankers think about it on a daily basis. Yes, and it is them we have to thank for the massive inflation too. So either they want the highest inflation in 40 years, or they are inept.
  - notahacker 4y ago
    It's also them you have to thank for 40 years of not having massive inflation, which was a pretty regular thing in earlier times. (And yes, they absolutely do prefer the high inflation outcome from a fuel supply shock following a COVID shock to the raise interest rates and crash the global economy like 2008 outcome. That much is a policy choice)
    - yucky 4y ago
      Why does middle class wealth destroying inflation go hand in hand with fractional reserve banking?
      - notahacker 4y ago

__m 4y ago

It’s not supposed to convince them, it’s just correcting a false premise.