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They always attack Chinese "ghost cities" and Chinese "real estate bubble / Evergrand" and Chinese "central planning" ... But in fact, USDT and Binance are kic

by EGreg 4y ago

They always attack Chinese "ghost cities" and Chinese "real estate bubble / Evergrand" and Chinese "central planning" ... But in fact, USDT and Binance are kicking while USDC and US Banks are starting to wobble. And it has to do with the irresponsibility of the central planners HERE in the USA (the Fed raising interest rates from 0.38% to 5% in a year!) https://www.investing.com/news/cryptocurrency-news/binance-ceo-mocks-critics-as-two-us-banks-crumble-within-a-week-3028065 https://www.investing.com/news/cryptocurrency-news/binance-c... Seriously, my theory is (different from the Austrians) that the Fed creates the problems and depressions mostly by raising interest rates. Instead, keep them at zero and let the market figure things out. I am fine with printing money as long as you raise taxes to remove it from the system. Raising interest rates is far worse and a depression is far worse than any inflation. https://www.bostonglobe.com/2022/09/21/opinion/fed-wants-you-lose-your-job/ https://www.bostonglobe.com/2022/09/21/opinion/fed-wants-you... Well, I guess somehow the reputation of USA of being an "economically free" country versus China lets them get away with central planning and soon the CBDCs and the national IDs for everyone. Not that I like that in China either!

FpUser 4y ago
>"far worse than any inflation." In 1923 the exchange rate has reached 1 trillion DM for 1USD. We all know how it had ended.
- EGreg 4y ago
  Nearly every hyperinflation example (there are very few, in fact) has something additional to that stuff. In the case of Weimar Germany, there was the little matter of THE VERSAILLES TREATY that required them to endlessly pay war reparations and punitive payments in gold. Britain told France to cut it out, but France was mad enough at the Germans that they continued. This led to the rise of the Nazis and WW2. https://www.history.com/news/treaty-of-versailles-world-war-ii-german-guilt-effects https://www.history.com/news/treaty-of-versailles-world-war-... You should read more economic viewpoints, such as Walter Mosler on hyperinflations: https://moslereconomics.com/wp-content/uploads/2020/11/Weimar-Republic-Hyperinflation-through-a-Modern-Monetary-Theory-Lens.pdf https://moslereconomics.com/wp-content/uploads/2020/11/Weima... Oh, and meanwhile there was a "free money miracle" going on in nearby Austria, and clearly did not lead to hyperinflation, quite the opposite: everyone paid off their taxes due to the demurrage of the free money... keep in mind this was while all around them there was a growing depression... even Mises institute grudgingly agrees! https://mises.org/library/free-money-miracle https://mises.org/library/free-money-miracle
  - FpUser 4y ago
    >"but France was mad enough at the Germans that they continued. This led to the rise of the Nazis and WW2." Oh I know that. My argument was rather pedantic. Now since you've mentioned it I wonder if the situation with Russia might to the same outcome eventually.
    - deleted 4y ago
      [deleted]
  - bfdm 4y ago
    Warren* Mosler, one of yhe founders of Modern Monetary Theory. Lead author was Phil Armstrong, and he did a great discussiom of the paper on the MMT podcast.
    - astrange 4y ago
      Rather, he is Modern Monetary Theory. MMT doesn't have an actual theory of the economy; it uses the standard model and just has a different vibe. So it's just whatever he and Stephanie Kelton feel like saying at the time. The most notable different policy prescription (job guarantee) is odd because it's originally a right-wing program they just decided is left-wing.
      - citizen_friend 4y ago
        Just because they don't completely redefine economic models from the start doesn't mean MMT isn't a theory. They clearly have different ideas about how policy should be implemented and what will happen. Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics. > right-wing program they just decided is left-wing. Why would MMT be limited to traditionally left/right boundaries?
        astrange 4y ago
AnonMO 4y ago
all countries have their flaws. Evergrand basically defaulted on their loans and was the equivalent of SVB for real-estate in china even the AUM were similar. The real-estate market is probably the most important market in china especially for the wealthy.also the market should be able to adjust to any rate not only 0 if it’s truly free.
Scoundreller 4y ago
Gresham's law: "Bad money drives out good [money]" https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law
kccqzy 4y ago
If you raise taxes enough, you can actually reduce inflation and solve the problem. But which country has the legal structure in place to raise taxes essentially every few months, on demand? Even if they did, almost no companies are ready to handle tax rates that change by the month.
- hattmall 4y ago
  When there's no meaningful limit on government spending inflation is a tax.

by EGreg 4y ago

FpUser 4y ago

>"far worse than any inflation." In 1923 the exchange rate has reached 1 trillion DM for 1USD. We all know how it had ended.

EGreg 4y ago
Nearly every hyperinflation example (there are very few, in fact) has something additional to that stuff. In the case of Weimar Germany, there was the little matter of THE VERSAILLES TREATY that required them to endlessly pay war reparations and punitive payments in gold. Britain told France to cut it out, but France was mad enough at the Germans that they continued. This led to the rise of the Nazis and WW2. https://www.history.com/news/treaty-of-versailles-world-war-ii-german-guilt-effects https://www.history.com/news/treaty-of-versailles-world-war-... You should read more economic viewpoints, such as Walter Mosler on hyperinflations: https://moslereconomics.com/wp-content/uploads/2020/11/Weimar-Republic-Hyperinflation-through-a-Modern-Monetary-Theory-Lens.pdf https://moslereconomics.com/wp-content/uploads/2020/11/Weima... Oh, and meanwhile there was a "free money miracle" going on in nearby Austria, and clearly did not lead to hyperinflation, quite the opposite: everyone paid off their taxes due to the demurrage of the free money... keep in mind this was while all around them there was a growing depression... even Mises institute grudgingly agrees! https://mises.org/library/free-money-miracle https://mises.org/library/free-money-miracle
- FpUser 4y ago
  >"but France was mad enough at the Germans that they continued. This led to the rise of the Nazis and WW2." Oh I know that. My argument was rather pedantic. Now since you've mentioned it I wonder if the situation with Russia might to the same outcome eventually.
  - deleted 4y ago
    [deleted]
- bfdm 4y ago
  Warren* Mosler, one of yhe founders of Modern Monetary Theory. Lead author was Phil Armstrong, and he did a great discussiom of the paper on the MMT podcast.
  - astrange 4y ago
    Rather, he is Modern Monetary Theory. MMT doesn't have an actual theory of the economy; it uses the standard model and just has a different vibe. So it's just whatever he and Stephanie Kelton feel like saying at the time. The most notable different policy prescription (job guarantee) is odd because it's originally a right-wing program they just decided is left-wing.
    - citizen_friend 4y ago
      Just because they don't completely redefine economic models from the start doesn't mean MMT isn't a theory. They clearly have different ideas about how policy should be implemented and what will happen. Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics. > right-wing program they just decided is left-wing. Why would MMT be limited to traditionally left/right boundaries?
      - astrange 4y ago

AnonMO 4y ago

all countries have their flaws. Evergrand basically defaulted on their loans and was the equivalent of SVB for real-estate in china even the AUM were similar. The real-estate market is probably the most important market in china especially for the wealthy.also the market should be able to adjust to any rate not only 0 if it’s truly free.

Scoundreller 4y ago

Gresham's law: "Bad money drives out good [money]" https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law

kccqzy 4y ago

If you raise taxes enough, you can actually reduce inflation and solve the problem. But which country has the legal structure in place to raise taxes essentially every few months, on demand? Even if they did, almost no companies are ready to handle tax rates that change by the month.

hattmall 4y ago
When there's no meaningful limit on government spending inflation is a tax.