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Hello economist and thank you for your feedback, You've made claims questioning my knowledge level and suggested that my opinions should not be disregarded, ye

Hello economist and thank you for your feedback, You've made claims questioning my knowledge level and suggested that my opinions should not be disregarded, yet you haven't presented any arguments on where exctly my economic understanding is ill. Could you please expand on those arguments?

lottin 2y ago
Well, I don't even know where to start. I will give you just one example: "The BRICS currency supply formula aims to maintain a constant or increasing value of the currency, while having a dynamic supply. This is achieved by adjusting the supply based on the economic performance of the member nations, ensuring that the value of the BRICS currency reflects the underlying economic value of the BRICS bloc." The underlying assumption here, and through the entire article, is that the supply in circulation is controlled by the issuer of the currency. In a modern economy (i.e., one with a financial sector) money is primarily created by the private banking system, in a decentralised fashion, not by the central bank. As a result, the central bank, which is technically the issuer of the currency (more precisely, the issuer of reserves) does NOT have direct control of the money supply. Instead the central bank attempts to influence the money supply through interest rates. If you replace the central bank with something else, you're going to have the same problem. You'll have to figure a way to control the money supply, in an indirect fashion. Yet in the model that you present, the issuer has direct control of the money supply, indicating a complete lack of understanding on your part about how the monetary system works.
- iluxonchik 2y ago
  Hello and thank you for getting back on this, I feel that there may be a misunderstanding on how you understand the BRICS digital currency to be implemented. I'll address your comment point-by-point: 0. The statement that commercial banks create more money that private banks is misleading. Since 2000, The U.S. government debt grew by about $25+ trillion from 2000 to 2023. Commercial bank loans increased by about $7+ trillion in the same period. Governments resort to the central banking entity directly for the issuance of debt through securities. I am citing the USD data, as it's available in detail and clarity directly from the government sources, like FRED. 1. You are describing a part of to the process by which the money supply increases, which indeed can be done by commercial banks. This is what happens when one gets a loan for a property or kickstart your business. While this is true, I don't understand how it goes against anything in the article. You appear to downplay the fact that the *commercial banks have to strictly abide by the rules set in place by the central bank*, namely on topics like overnight exchange rates, the minimum reserve factor to kept at the central bank, and the eventual premium on those reserves. For example, in the EU we've had negative central bank interest rates for a long time, until recently. This meant that commercial banks were incentivized to loan the money out instead of keeping it stored. In the US, commercial banks were incentivized to purchase government debt securities, like bonds, by not having to take a "haircut" on their value. As such, the commercial banks can be seen as a direct extension of a central bank. 2. It is incorrect to say that the Central Bank "does NOT have direct control or the money supply", and you appear to contradict this assertion when in the next sentence when say that "the central bank attempts to influence the money supply through interest rates". Central bank is the entity that influences the money supply the most, as I've described in the previous point. If you disagree, please explain the correlation between the money supply (e.g. M2), and the central bank interest rates. FRED has this data accessible in an easy to understand manner: https://fred.stlouisfed.org/ https://fred.stlouisfed.org/ 3. I'm not sure how far along you've got in the article, or how familiar you are with Automated Market Makers (AMM), but the dynamic supply can be implemented without having a central bank in a traditional sense, as it can all be controlled by a smart contract. In the formula `M = ForT + FDI + PI + ForEx + G&EX + InterSec + Der + ForDeposit + EuroCurrency + MTransfer + Etc`, every argument is a financial derivative, and a smart-contract blockchain + ZKP is the perfect way to concretize them. 4. If by "the issuer has direct control over the money supply" you are refer to the smart contract issuing the currency, then you are correct! A point that you may be missing is that *nobody can influence this process, beyond what is encoded in the code of the smart contract*. If the smart contract has a rule where some "magic entity" can create supply at will, then of course that entity will have full and direct influence on the supply. But this is neither what the article proposes, nor how the BRICS currency is being designed. Let me know if some parts were unclear. Looking forward to continue this discussion.
  - lottin 2y ago
    To be clear, the issuance of debt by the US government does NOT increase the money supply. It would if the US government took loans from the banking system, but that's not how governments get funding. I'll leave it here, because I don't think that this conversation is going to be productive for either of us. Don't take it personally.
    - fuzzfactor 2y ago
      In the US up until about the 20th century, the government was known to only take loans from the banking system in times of war.
    - Hock88sdx 2y ago
      My goodness your assertion that US government doest NOT increase money supply is your own thesis? It is so strange seeing US government borrow money and then no inflation (current inflation must be imaginary!)! FED now DIRECTLY buy American T-bills (their excuse is to keep the liquidity going). FED create money out of thin air to give to Yellen to spend! You seriously need to have friends in FED to know what hanky panky things they are doing in there right now. Textbook and what is happening is totally different. I do take it personally when misinformation like yours disguise as "expert" without observed realoty to backup (maybe some links and numbers which by now has never been auditted by any 3rd party similar to Fort Knox).
- Hock88sdx 2y ago
  Central bank and government have been in direct control of money supply for the last 2 decades. Your understanding seems to be glaring missing on that. Whatever econ textbook you have been reading or learning from must be written pre-Clinton time. Just look at how much Americam Treasury pumping money in from direct Fed purchases of T-bills (printing money via phone calls internally or else Jerome will get retaliated by FBI). The situation over BOJ is even worst as they have been doing this internal phone call and then print in the last 3 decades. Check their debt vsd gdp! If private banking can print money on their own, why would they bother with centralized interest rate announcement? Just print and people will flock to it instead of Jerome!
  - lottin 2y ago
    If you want to discuss the monetary system, you should at least have a basic understanding of it. Otherwise you're wasting everybody's time, including yours.

lottin 2y ago

Well, I don't even know where to start. I will give you just one example: "The BRICS currency supply formula aims to maintain a constant or increasing value of the currency, while having a dynamic supply. This is achieved by adjusting the supply based on the economic performance of the member nations, ensuring that the value of the BRICS currency reflects the underlying economic value of the BRICS bloc." The underlying assumption here, and through the entire article, is that the supply in circulation is controlled by the issuer of the currency. In a modern economy (i.e., one with a financial sector) money is primarily created by the private banking system, in a decentralised fashion, not by the central bank. As a result, the central bank, which is technically the issuer of the currency (more precisely, the issuer of reserves) does NOT have direct control of the money supply. Instead the central bank attempts to influence the money supply through interest rates. If you replace the central bank with something else, you're going to have the same problem. You'll have to figure a way to control the money supply, in an indirect fashion. Yet in the model that you present, the issuer has direct control of the money supply, indicating a complete lack of understanding on your part about how the monetary system works.

iluxonchik 2y ago
Hello and thank you for getting back on this, I feel that there may be a misunderstanding on how you understand the BRICS digital currency to be implemented. I'll address your comment point-by-point: 0. The statement that commercial banks create more money that private banks is misleading. Since 2000, The U.S. government debt grew by about $25+ trillion from 2000 to 2023. Commercial bank loans increased by about $7+ trillion in the same period. Governments resort to the central banking entity directly for the issuance of debt through securities. I am citing the USD data, as it's available in detail and clarity directly from the government sources, like FRED. 1. You are describing a part of to the process by which the money supply increases, which indeed can be done by commercial banks. This is what happens when one gets a loan for a property or kickstart your business. While this is true, I don't understand how it goes against anything in the article. You appear to downplay the fact that the *commercial banks have to strictly abide by the rules set in place by the central bank*, namely on topics like overnight exchange rates, the minimum reserve factor to kept at the central bank, and the eventual premium on those reserves. For example, in the EU we've had negative central bank interest rates for a long time, until recently. This meant that commercial banks were incentivized to loan the money out instead of keeping it stored. In the US, commercial banks were incentivized to purchase government debt securities, like bonds, by not having to take a "haircut" on their value. As such, the commercial banks can be seen as a direct extension of a central bank. 2. It is incorrect to say that the Central Bank "does NOT have direct control or the money supply", and you appear to contradict this assertion when in the next sentence when say that "the central bank attempts to influence the money supply through interest rates". Central bank is the entity that influences the money supply the most, as I've described in the previous point. If you disagree, please explain the correlation between the money supply (e.g. M2), and the central bank interest rates. FRED has this data accessible in an easy to understand manner: https://fred.stlouisfed.org/ https://fred.stlouisfed.org/ 3. I'm not sure how far along you've got in the article, or how familiar you are with Automated Market Makers (AMM), but the dynamic supply can be implemented without having a central bank in a traditional sense, as it can all be controlled by a smart contract. In the formula `M = ForT + FDI + PI + ForEx + G&EX + InterSec + Der + ForDeposit + EuroCurrency + MTransfer + Etc`, every argument is a financial derivative, and a smart-contract blockchain + ZKP is the perfect way to concretize them. 4. If by "the issuer has direct control over the money supply" you are refer to the smart contract issuing the currency, then you are correct! A point that you may be missing is that *nobody can influence this process, beyond what is encoded in the code of the smart contract*. If the smart contract has a rule where some "magic entity" can create supply at will, then of course that entity will have full and direct influence on the supply. But this is neither what the article proposes, nor how the BRICS currency is being designed. Let me know if some parts were unclear. Looking forward to continue this discussion.
- lottin 2y ago
  To be clear, the issuance of debt by the US government does NOT increase the money supply. It would if the US government took loans from the banking system, but that's not how governments get funding. I'll leave it here, because I don't think that this conversation is going to be productive for either of us. Don't take it personally.
  - fuzzfactor 2y ago
    In the US up until about the 20th century, the government was known to only take loans from the banking system in times of war.
  - Hock88sdx 2y ago
    My goodness your assertion that US government doest NOT increase money supply is your own thesis? It is so strange seeing US government borrow money and then no inflation (current inflation must be imaginary!)! FED now DIRECTLY buy American T-bills (their excuse is to keep the liquidity going). FED create money out of thin air to give to Yellen to spend! You seriously need to have friends in FED to know what hanky panky things they are doing in there right now. Textbook and what is happening is totally different. I do take it personally when misinformation like yours disguise as "expert" without observed realoty to backup (maybe some links and numbers which by now has never been auditted by any 3rd party similar to Fort Knox).
Hock88sdx 2y ago
Central bank and government have been in direct control of money supply for the last 2 decades. Your understanding seems to be glaring missing on that. Whatever econ textbook you have been reading or learning from must be written pre-Clinton time. Just look at how much Americam Treasury pumping money in from direct Fed purchases of T-bills (printing money via phone calls internally or else Jerome will get retaliated by FBI). The situation over BOJ is even worst as they have been doing this internal phone call and then print in the last 3 decades. Check their debt vsd gdp! If private banking can print money on their own, why would they bother with centralized interest rate announcement? Just print and people will flock to it instead of Jerome!
- lottin 2y ago
  If you want to discuss the monetary system, you should at least have a basic understanding of it. Otherwise you're wasting everybody's time, including yours.