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This is a reminder that the economy needs a reliable store of value. A CBDC (i.e. everybody gets an account at the central bank) would make sense for this. Iron

This is a reminder that the economy needs a reliable store of value. A CBDC (i.e. everybody gets an account at the central bank) would make sense for this. Ironically, when introduced it might cause bank runs or other stresses for banks though.

cactusplant7374 4y ago
What kind of interest would we get?
- deleted 4y ago
  [deleted]
- bradleyjg 4y ago
  It shouldn’t get any interest. In fact, there should be a cost of carry. Interest comes from lending money to some entity that want to borrow money. Central banks don’t. Conflating an investment (lending at interest) and a store of value is how we got to the mess we are in.
- deleted 4y ago
  [deleted]
- wcoenen 4y ago
  For the Fed, I guess it could be the same as the IORB, currently 4.9%. (But I am not economist, I don't know whether that would work.) https://www.federalreserve.gov/monetarypolicy/reserve-balances.htm https://www.federalreserve.gov/monetarypolicy/reserve-balanc...
fsckboy 4y ago
we also need a universe that doesn't die a slow heat death... the same concept in economics is called "there is no free lunch"
cdnsteve 4y ago
Cbdc is the last thing we need. Trust of these central governments and banks is clearly lost yet making a new system for them, that no one voted for (cbdc) or was asked about, that gives them complete control over our money is better? No thanks. This is why Bitcoin was created. There is already a solution and the central banks see it as a threat to their power. They are no longer needed.
bravo22 4y ago
That wouldn't be a store of value in the sense of actual purchasing power because you're tied to the inflationary effect of that currency. If you mean an account that holds its absolute dollar value, you are right, although T-bills would do the same thing if traded at sufficient frequency. You are also correct about it causing bank issues. The fed reverse-repo facility, which is essentially what you're describing here but for banks to use partially contributed to this mess. Overall there is no getting away from the fact that "value" of assets is related to the interest rate of the currency and if the interest rate rises some of those will be worth less which means a slice of people in the economy will have less than they did before. The Fed can't do anything to magic it away. In a similar vein you can't put all your data on a server somewhere, call it the cloud, and cry foul if you lose your most important source code and IP when the server goes down. Banks can't change underlying economics. It was incumbant on the businesses working w/ SVB to not use them as their treasury anymore than they would put all their code on one AWS server and call it a day.
RedCondor 4y ago
Value is a social relation, not an object. It is impossible to design a foolproof "store of value." Money under the mattress is depreciating paper, gold is just a little mineral pebble, fiat money and shares are just contracts, the less said of crypto the better. The closest you can get to this ideal "store of value" is to take the general idea behind ETFs and take it way further to find ways to "invest" in society itself, but in a much more multi-modal way. If done properly, unless society started to somehow fall apart, you would always be guaranteed returns. The key thing is that because you would be investing extremely broadly, the notion that you're privately owning this or that company or bank account would begin to vanish. This is, of course, just a financial way to describe socialism.
GenericDev 4y ago
No it isn't. I cannot tell why I'm seeing this all over Hacker News. A Central Bank Digital Currency solves nothing. It only emboldens and tightens the grip of people in power. By definition it is centralized and forces anyone who needs to work in an economy to be accountable to an entity that can and will remove access controls to their financial streams. It does not change anything in the context of the current financial environment. It does not make things safer for investments. The only thing this solves is having money be digitized and managed by parties who are not trust worthy. Get out of here with these comments. You feel like astro-turfing.
- wcoenen 4y ago
  > I cannot tell why I'm seeing this all over Hacker News I wasn't aware that others had made the same comment. But afterwards I noticed that there was an episode on the Odd Lots podcast (23rd of March) where they interview professor Saule Omarova on this topic. So it's definitely an idea which has gained some momentum. If you don't see the point of it, I recommend listening to the podcast episode. > Get out of here with these comments. You feel like astro-turfing. I am not astro-turfing. Not every idea different from your own is a conspiracy.
- antibasilisk 4y ago
  >I cannot tell why I'm seeing this all over Hacker News. I think we can certainly speculate.
- landemva 4y ago
  > forces anyone who needs to work in an economy to be accountable to an entity that can and will remove access Federal IRS and county child support enforcement have ridiculous powers wrote in to State law. They can seize accounts with a letter. Good luck fighting their mistakes when they just seized all your accounts. Child support enforcement in counties are staffed with GED holders, and 'qualified immunity' typically prevents suing for damages. Having one centralized account for seizure makes their jobs easy, and will suck for their victims.
- 0xParlay 4y ago
  Long time lurker here with no alts. Aren't tight capitol controls seen as a good thing? Surprised to see that as a con. > managed by parties who are not trust worthy I thought the idea behind CBDC was it would be a scriptable. Not trying to get heated here but are you saying the Fed isn't trustworthy? I see the primary use case of banks to be 1) store and transfer funds 2) earn interest on savings. Use case 1 could be handled by CBDC. Use case 2 could be better handled by literally anyone else Personally don't have any strong feelings regarding any of this. Interesting to see people get so passionate about banking.
crgi 4y ago
And the central bank does the KYC? And it also decides who should get money and who not on every loan? Doesn‘t scale very well this model, no matter if DLT is used or not.
- landemva 4y ago
  And they will implement a chokepoint for income they determine may be immoral. https://www.forbes.com/sites/norbertmichel/2018/11/05/newly-unsealed-documents-show-top-fdic-officials-running-operation-choke-point https://www.forbes.com/sites/norbertmichel/2018/11/05/newly-...
NordSteve 4y ago
We need to give up on the idea that there exists a reliable store of value. There is no such thing.
hedora 4y ago
Why does society need a reliable store of value? Currently, things are set up so that the ultra rich have to use their capital to back things that provide actual economic value. (There aren’t enough dollars in circulation to store their wealth.) This forcing function seems like a good thing to me.
- lowkey 4y ago
  Currently things are set up so that the working class have no viable options for storing the purchasing power of their labor for future expenditures. This makes it virtually impossible for average folks to save for retirement without speculating on the stock market and hoping that they made the right bets 30-40 years into the future. A reliable store of value is essential to enabling a path towards less inequality.
  - carlosjobim 4y ago
    To guarantee the value for the odd people retiring you have to enslave the younger people working to guarantee that promise. Then you take a (large) cut of that generational transfer as a reward for guaranteeing a reliable store of value. Wait! I think I just invented the way the modern world works
    - lowkey 4y ago
      I wasn't referring to old people. I was referring to working age people who attempt to save for their own retirement. But to your point, why do you advocate for preventing a retiree, the proverbial widows and grandmas, from having access to a reliable store of value that doesn't require they risk their retirement savings in speculation? Forcing everyone into stock or real estate speculation necessarily results the vast majority of the wealth gains going to the most financially sophisticated (Wall Street), the rich with the best financial advisors, or the lucky few who happened to allocate their savings in optimal bets 30-40 years in the future. A reasonable long term store of value would help address inequality. By not having one we force the working class to trust their financial future to a predatory casino run by a den of wolves.
spaceman_2020 4y ago
CBDCs are dead in the water. A decade of fear-mongering - some potentially real, some not - has ensured that a very large % of the population will simply never adopt it. Heck, even China has struggled to push adoption of its Digital Yuan.
lowkey 4y ago
I am concerned that a CBDC is actually the end goal of the government and the FED and the WEF. What if these crisis were designed to move us towards a CBDC all along? "You will own nothing and you will be happy" - the Word Economic Forum CBDC offers governments ultimate control over citizens. When/where/how we’re allowed to spend our money. Add in social credit scores and your CBDC money can be deactivated for any reason that runs counter to the approved narrative. Protest becomes impossible. Everyone is fully dependent on the state for the basic necessities of life. You can't live if you can't buy food/shelter/heat. Here is Christine Lagarde, making it clear that the real reason Central Banks are pushing for CBDCs is that if they don't, they risk losing control.[0] The ability to transact is a fundamental human right. There can be no liberty without the freedom to transact. [0] https://twitter.com/DVATW/status/1638133299468959749 https://twitter.com/DVATW/status/1638133299468959749
antibasilisk 4y ago
>This is a reminder that the economy needs a reliable store of value hmm yes, perhaps gold, or even bitcoin for online things >A CBDC That seems bad.
carlosjobim 4y ago
I thank God that I've had the foresight to have decoupled all my finances from any specific nation or currency so that I will not be exposed to the tyranny you support. I feel only sorrow for those who are not as fortunate and have to live your nightmare.
tdehnel 4y ago
You switched from the motte to the bailey so fast right there it made my head spin. Yes, money is good. No, more centralized control over money is not good. Stop it with the socialist nonsense.
- hgsgm 4y ago
  What do you think "socialist" means?
  - tdehnel 4y ago
    Socialism is when the public owns the means of production. Sounds super democratic and fun! Except how are decisions made in such a system? The answer is always bureaucrats.

cactusplant7374 4y ago

What kind of interest would we get?

deleted 4y ago
[deleted]
bradleyjg 4y ago
It shouldn’t get any interest. In fact, there should be a cost of carry. Interest comes from lending money to some entity that want to borrow money. Central banks don’t. Conflating an investment (lending at interest) and a store of value is how we got to the mess we are in.
deleted 4y ago
[deleted]
wcoenen 4y ago
For the Fed, I guess it could be the same as the IORB, currently 4.9%. (But I am not economist, I don't know whether that would work.) https://www.federalreserve.gov/monetarypolicy/reserve-balances.htm https://www.federalreserve.gov/monetarypolicy/reserve-balanc...

fsckboy 4y ago

we also need a universe that doesn't die a slow heat death... the same concept in economics is called "there is no free lunch"

cdnsteve 4y ago

Cbdc is the last thing we need. Trust of these central governments and banks is clearly lost yet making a new system for them, that no one voted for (cbdc) or was asked about, that gives them complete control over our money is better? No thanks. This is why Bitcoin was created. There is already a solution and the central banks see it as a threat to their power. They are no longer needed.

bravo22 4y ago

That wouldn't be a store of value in the sense of actual purchasing power because you're tied to the inflationary effect of that currency. If you mean an account that holds its absolute dollar value, you are right, although T-bills would do the same thing if traded at sufficient frequency. You are also correct about it causing bank issues. The fed reverse-repo facility, which is essentially what you're describing here but for banks to use partially contributed to this mess. Overall there is no getting away from the fact that "value" of assets is related to the interest rate of the currency and if the interest rate rises some of those will be worth less which means a slice of people in the economy will have less than they did before. The Fed can't do anything to magic it away. In a similar vein you can't put all your data on a server somewhere, call it the cloud, and cry foul if you lose your most important source code and IP when the server goes down. Banks can't change underlying economics. It was incumbant on the businesses working w/ SVB to not use them as their treasury anymore than they would put all their code on one AWS server and call it a day.

RedCondor 4y ago

Value is a social relation, not an object. It is impossible to design a foolproof "store of value." Money under the mattress is depreciating paper, gold is just a little mineral pebble, fiat money and shares are just contracts, the less said of crypto the better. The closest you can get to this ideal "store of value" is to take the general idea behind ETFs and take it way further to find ways to "invest" in society itself, but in a much more multi-modal way. If done properly, unless society started to somehow fall apart, you would always be guaranteed returns. The key thing is that because you would be investing extremely broadly, the notion that you're privately owning this or that company or bank account would begin to vanish. This is, of course, just a financial way to describe socialism.

GenericDev 4y ago

No it isn't. I cannot tell why I'm seeing this all over Hacker News. A Central Bank Digital Currency solves nothing. It only emboldens and tightens the grip of people in power. By definition it is centralized and forces anyone who needs to work in an economy to be accountable to an entity that can and will remove access controls to their financial streams. It does not change anything in the context of the current financial environment. It does not make things safer for investments. The only thing this solves is having money be digitized and managed by parties who are not trust worthy. Get out of here with these comments. You feel like astro-turfing.

wcoenen 4y ago
> I cannot tell why I'm seeing this all over Hacker News I wasn't aware that others had made the same comment. But afterwards I noticed that there was an episode on the Odd Lots podcast (23rd of March) where they interview professor Saule Omarova on this topic. So it's definitely an idea which has gained some momentum. If you don't see the point of it, I recommend listening to the podcast episode. > Get out of here with these comments. You feel like astro-turfing. I am not astro-turfing. Not every idea different from your own is a conspiracy.
antibasilisk 4y ago
>I cannot tell why I'm seeing this all over Hacker News. I think we can certainly speculate.
landemva 4y ago
> forces anyone who needs to work in an economy to be accountable to an entity that can and will remove access Federal IRS and county child support enforcement have ridiculous powers wrote in to State law. They can seize accounts with a letter. Good luck fighting their mistakes when they just seized all your accounts. Child support enforcement in counties are staffed with GED holders, and 'qualified immunity' typically prevents suing for damages. Having one centralized account for seizure makes their jobs easy, and will suck for their victims.
0xParlay 4y ago
Long time lurker here with no alts. Aren't tight capitol controls seen as a good thing? Surprised to see that as a con. > managed by parties who are not trust worthy I thought the idea behind CBDC was it would be a scriptable. Not trying to get heated here but are you saying the Fed isn't trustworthy? I see the primary use case of banks to be 1) store and transfer funds 2) earn interest on savings. Use case 1 could be handled by CBDC. Use case 2 could be better handled by literally anyone else Personally don't have any strong feelings regarding any of this. Interesting to see people get so passionate about banking.

crgi 4y ago

And the central bank does the KYC? And it also decides who should get money and who not on every loan? Doesn‘t scale very well this model, no matter if DLT is used or not.

landemva 4y ago
And they will implement a chokepoint for income they determine may be immoral. https://www.forbes.com/sites/norbertmichel/2018/11/05/newly-unsealed-documents-show-top-fdic-officials-running-operation-choke-point https://www.forbes.com/sites/norbertmichel/2018/11/05/newly-...

NordSteve 4y ago

We need to give up on the idea that there exists a reliable store of value. There is no such thing.

hedora 4y ago

Why does society need a reliable store of value? Currently, things are set up so that the ultra rich have to use their capital to back things that provide actual economic value. (There aren’t enough dollars in circulation to store their wealth.) This forcing function seems like a good thing to me.

lowkey 4y ago
Currently things are set up so that the working class have no viable options for storing the purchasing power of their labor for future expenditures. This makes it virtually impossible for average folks to save for retirement without speculating on the stock market and hoping that they made the right bets 30-40 years into the future. A reliable store of value is essential to enabling a path towards less inequality.
- carlosjobim 4y ago
  To guarantee the value for the odd people retiring you have to enslave the younger people working to guarantee that promise. Then you take a (large) cut of that generational transfer as a reward for guaranteeing a reliable store of value. Wait! I think I just invented the way the modern world works
  - lowkey 4y ago
    I wasn't referring to old people. I was referring to working age people who attempt to save for their own retirement. But to your point, why do you advocate for preventing a retiree, the proverbial widows and grandmas, from having access to a reliable store of value that doesn't require they risk their retirement savings in speculation? Forcing everyone into stock or real estate speculation necessarily results the vast majority of the wealth gains going to the most financially sophisticated (Wall Street), the rich with the best financial advisors, or the lucky few who happened to allocate their savings in optimal bets 30-40 years in the future. A reasonable long term store of value would help address inequality. By not having one we force the working class to trust their financial future to a predatory casino run by a den of wolves.

spaceman_2020 4y ago

CBDCs are dead in the water. A decade of fear-mongering - some potentially real, some not - has ensured that a very large % of the population will simply never adopt it. Heck, even China has struggled to push adoption of its Digital Yuan.

lowkey 4y ago

I am concerned that a CBDC is actually the end goal of the government and the FED and the WEF. What if these crisis were designed to move us towards a CBDC all along? "You will own nothing and you will be happy" - the Word Economic Forum CBDC offers governments ultimate control over citizens. When/where/how we’re allowed to spend our money. Add in social credit scores and your CBDC money can be deactivated for any reason that runs counter to the approved narrative. Protest becomes impossible. Everyone is fully dependent on the state for the basic necessities of life. You can't live if you can't buy food/shelter/heat. Here is Christine Lagarde, making it clear that the real reason Central Banks are pushing for CBDCs is that if they don't, they risk losing control.[0] The ability to transact is a fundamental human right. There can be no liberty without the freedom to transact. [0] https://twitter.com/DVATW/status/1638133299468959749 https://twitter.com/DVATW/status/1638133299468959749

antibasilisk 4y ago

>This is a reminder that the economy needs a reliable store of value hmm yes, perhaps gold, or even bitcoin for online things >A CBDC That seems bad.

carlosjobim 4y ago

I thank God that I've had the foresight to have decoupled all my finances from any specific nation or currency so that I will not be exposed to the tyranny you support. I feel only sorrow for those who are not as fortunate and have to live your nightmare.

tdehnel 4y ago

You switched from the motte to the bailey so fast right there it made my head spin. Yes, money is good. No, more centralized control over money is not good. Stop it with the socialist nonsense.

hgsgm 4y ago
What do you think "socialist" means?
- tdehnel 4y ago
  Socialism is when the public owns the means of production. Sounds super democratic and fun! Except how are decisions made in such a system? The answer is always bureaucrats.