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They did this to receive a loan from the IMF. The IMF was withholding the loan because of BTC and would not disburse it until they got rid of its status as lega

They did this to receive a loan from the IMF. The IMF was withholding the loan because of BTC and would not disburse it until they got rid of its status as legal tender.

kjs3 2y ago
'Withholding'...well how dare they. So how many IMF bailout loans must be dispersed, without condition of course, before this BTC economy will magically work?
sitkack 2y ago
[flagged]
- RabbiNoseberg 2y ago
  [dead]
- addicted 2y ago
  Yeah, the all so powerful IMF that can be thwarted by the incredibly difficult task of…checks notes…. not taking loans from them… The IMF (or its donor nations) aren’t forcing anyone to take loans from them. Countries do that because the IMF offers much cheaper rates they can get anywhere else and is willing to forgive those loans far more easily than any other entity. In return it expects certain good governance changes that are stated upfront as conditions to receive the loans you could very well get from anywhere else in the world. Don’t like what they consider good governance? Don’t take a loan from them. Go get in the private market or the variety of nations willing to lend at far more onerous terms.
  - hammock 2y ago
    When a country takes an IMF loan, it’s often the political elites—not the general population—who make the decision. And in many cases, these elites personally benefit from the deal, even if it devastates their nation in the long run For example, in Argentina (2001), President Fernando de la Rúa followed the IMF’s austerity policies despite mass protests. The economy collapsed, and he fled the country via helicopter. But the elites who benefited from privatization kept their wealth while everyday citizens suffered
  - sitkack 2y ago
    Read a book!
    - sitkack 2y ago
      Seriously this is the most BS flag I have ever gotten. I am ashamed of you hacker news points having people. The IMF is the pinnacle of western imperialism.
Mengkudulangsat 2y ago
Fair demand by the IMF. Presumably they require their loan to be repaid in fiat because of their internal charter. If Bitcoin adoption eventually removes El Salvador's ability to issue fiat, their loan can't be repaid.
- do_not_redeem 2y ago
  El Salvador can't issue fiat. They use US dollars. Only the US Federal Reserve can issue USD.
  - kragen 2y ago
    They could. Ecuador does in fact mint its own US-dollar coins, and El Salvador could dedollarize.
    - favorited 2y ago
      Ecuador mints their own centavo coins, but they are not legal tender outside of Ecuador. They've never released their own $1 coin into general circulation – their ubiquitous Sacagawea dollars are minted in the US.
      - kragen 2y ago
        Sorry, I didn't mean to say they minted US$1 coins, just coins whose value is denominated in dollars. I think the biggest one is US$0.25? US dollars are also not legal tender outside the US, with a few exceptions (I think including both El Salvador and Ecuador.)
- xenihn 2y ago
  El Salvador hasn't issued fiat since 2001. Any other presumptions as to why its a fair demand?
- hackernudes 2y ago
  El Salvador doesn't have a fiat currency. They are dollarized since 2001.
daedrdev 2y ago
The IMF probably rightfully sees a structurally deflationary currency (bitcoin) as a massive risk should it gain widespread adoption
- throw101010 2y ago
  It is structurally disinflationary, not just deflationary. Bitcoin is still emitted every ~10 minutes with currently an average inflation rate just under 1% of its supply per year. The "massive risk" the IMF sees is that without central banks or even less influential central banks the IMF existence would be threatened.
  - daedrdev 2y ago
    If an economy grows at 2% and the supply grows by 1% it is in permanent deflation. For a country like el salvador with much higher growth, the deflation can easily be much higher
    - throw101010 2y ago
      You were discussing "structural" inflation, referring to Bitcoin as a system, not relative to inflation of goods and services in a specific economy. These are two distinct economic phenomena that can influence each other but should not be conflated. Bitcoin's supply doesn't become inflationary or deflationary "structurally" based on the growth of x or y economies. The word inflation is used for both concepts but, structurally, Bitcoin will remain an inflationary system until around year 2140... then block subsidies are going to to stop, no new bitcoins are going to be emitted and then you (or more likely our descendants) can call Bitcoin a structurally deflationary money. Hence the use of the word disinflationary, it currently is in the process of becoming a deflationary system by progressively reducing the inflation of its own money supply (through "halvings" approx. every 4 years).
Analemma_ 2y ago
If the Bitcoin experiment had been a success, they wouldn't be needing an IMF loan.
- olalonde 2y ago
  They also use USD as legal tender. Is their USD experiment a failure too?
  - kjs3 2y ago
    It's a failed economy with both BTC and USD, so...yes? I'm sure they would accept a BTC denominated bailout. Problem solved, right?
jimkleiber 2y ago
How many people in the Bitcoin community actually think a predictably deflationary asset is good to use as a currency?
- ball_of_lint 2y ago
  https://en.wikipedia.org/wiki/Argumentum_ad_populum https://en.wikipedia.org/wiki/Argumentum_ad_populum I'd much prefer a small amount of deflation to the massive inflation that USD is currently undergoing. And furthermore I think our economic system which encourages young people to take on debt in order to have niceties such as housing and transportation is massively exploitative and unsustainable.
  - consp 2y ago
    > And furthermore I think our economic system which encourages young people to take on debt in order to have niceties such as housing and transportation is massively exploitative and unsustainable. Deflation will kill that. Your loan will cost more over time instead of less. The assumption with inflation is loans will follow it. With deflation and loans not following then people who bought into the system might be well off but those who are not yet in are worse. Same thing with inflation and loans not following as is happening now.
  - jimkleiber 2y ago
    From my (maybe naive) understanding of current economic theory, it's that a small amount of inflation is what grows an economy. And an important part of that is unpredictable levels of inflation/deflation. So I'd assume a small amount of predictable deflation would shrink an economy. Anyone know more about this?
  - graemep 2y ago
    High inflation discourages high debt. High inflation effectively front loaded loans that had fixed repayments (such as mortgage repayments) and the high interest rates that went with them (they move togeter - its called the Fisher Effect - https://moneyterms.co.uk/fisher-effect/ https://moneyterms.co.uk/fisher-effect/ ) meant lenders were willing to lend a much lower multiple or income. In most places (and definitely in the UK) house prices were much lower relative to incomes when we had 10% annual inflation.

They did this to receive a loan from the IMF. The IMF was withholding the loan because of BTC and would not disburse it until they got rid of its status as legal tender.

kjs3 2y ago

'Withholding'...well how dare they. So how many IMF bailout loans must be dispersed, without condition of course, before this BTC economy will magically work?

sitkack 2y ago

[flagged]

RabbiNoseberg 2y ago
[dead]
addicted 2y ago
Yeah, the all so powerful IMF that can be thwarted by the incredibly difficult task of…checks notes…. not taking loans from them… The IMF (or its donor nations) aren’t forcing anyone to take loans from them. Countries do that because the IMF offers much cheaper rates they can get anywhere else and is willing to forgive those loans far more easily than any other entity. In return it expects certain good governance changes that are stated upfront as conditions to receive the loans you could very well get from anywhere else in the world. Don’t like what they consider good governance? Don’t take a loan from them. Go get in the private market or the variety of nations willing to lend at far more onerous terms.
- hammock 2y ago
  When a country takes an IMF loan, it’s often the political elites—not the general population—who make the decision. And in many cases, these elites personally benefit from the deal, even if it devastates their nation in the long run For example, in Argentina (2001), President Fernando de la Rúa followed the IMF’s austerity policies despite mass protests. The economy collapsed, and he fled the country via helicopter. But the elites who benefited from privatization kept their wealth while everyday citizens suffered
- sitkack 2y ago
  Read a book!
  - sitkack 2y ago
    Seriously this is the most BS flag I have ever gotten. I am ashamed of you hacker news points having people. The IMF is the pinnacle of western imperialism.

Mengkudulangsat 2y ago

Fair demand by the IMF. Presumably they require their loan to be repaid in fiat because of their internal charter. If Bitcoin adoption eventually removes El Salvador's ability to issue fiat, their loan can't be repaid.

do_not_redeem 2y ago
El Salvador can't issue fiat. They use US dollars. Only the US Federal Reserve can issue USD.
- kragen 2y ago
  They could. Ecuador does in fact mint its own US-dollar coins, and El Salvador could dedollarize.
  - favorited 2y ago
    Ecuador mints their own centavo coins, but they are not legal tender outside of Ecuador. They've never released their own $1 coin into general circulation – their ubiquitous Sacagawea dollars are minted in the US.
    - kragen 2y ago
      Sorry, I didn't mean to say they minted US$1 coins, just coins whose value is denominated in dollars. I think the biggest one is US$0.25? US dollars are also not legal tender outside the US, with a few exceptions (I think including both El Salvador and Ecuador.)
xenihn 2y ago
El Salvador hasn't issued fiat since 2001. Any other presumptions as to why its a fair demand?
hackernudes 2y ago
El Salvador doesn't have a fiat currency. They are dollarized since 2001.

daedrdev 2y ago

The IMF probably rightfully sees a structurally deflationary currency (bitcoin) as a massive risk should it gain widespread adoption

throw101010 2y ago
It is structurally disinflationary, not just deflationary. Bitcoin is still emitted every ~10 minutes with currently an average inflation rate just under 1% of its supply per year. The "massive risk" the IMF sees is that without central banks or even less influential central banks the IMF existence would be threatened.
- daedrdev 2y ago
  If an economy grows at 2% and the supply grows by 1% it is in permanent deflation. For a country like el salvador with much higher growth, the deflation can easily be much higher
  - throw101010 2y ago
    You were discussing "structural" inflation, referring to Bitcoin as a system, not relative to inflation of goods and services in a specific economy. These are two distinct economic phenomena that can influence each other but should not be conflated. Bitcoin's supply doesn't become inflationary or deflationary "structurally" based on the growth of x or y economies. The word inflation is used for both concepts but, structurally, Bitcoin will remain an inflationary system until around year 2140... then block subsidies are going to to stop, no new bitcoins are going to be emitted and then you (or more likely our descendants) can call Bitcoin a structurally deflationary money. Hence the use of the word disinflationary, it currently is in the process of becoming a deflationary system by progressively reducing the inflation of its own money supply (through "halvings" approx. every 4 years).

Analemma_ 2y ago

If the Bitcoin experiment had been a success, they wouldn't be needing an IMF loan.

olalonde 2y ago
They also use USD as legal tender. Is their USD experiment a failure too?
- kjs3 2y ago
  It's a failed economy with both BTC and USD, so...yes? I'm sure they would accept a BTC denominated bailout. Problem solved, right?

jimkleiber 2y ago

How many people in the Bitcoin community actually think a predictably deflationary asset is good to use as a currency?

ball_of_lint 2y ago
https://en.wikipedia.org/wiki/Argumentum_ad_populum https://en.wikipedia.org/wiki/Argumentum_ad_populum I'd much prefer a small amount of deflation to the massive inflation that USD is currently undergoing. And furthermore I think our economic system which encourages young people to take on debt in order to have niceties such as housing and transportation is massively exploitative and unsustainable.
- consp 2y ago
  > And furthermore I think our economic system which encourages young people to take on debt in order to have niceties such as housing and transportation is massively exploitative and unsustainable. Deflation will kill that. Your loan will cost more over time instead of less. The assumption with inflation is loans will follow it. With deflation and loans not following then people who bought into the system might be well off but those who are not yet in are worse. Same thing with inflation and loans not following as is happening now.
- jimkleiber 2y ago
  From my (maybe naive) understanding of current economic theory, it's that a small amount of inflation is what grows an economy. And an important part of that is unpredictable levels of inflation/deflation. So I'd assume a small amount of predictable deflation would shrink an economy. Anyone know more about this?
- graemep 2y ago
  High inflation discourages high debt. High inflation effectively front loaded loans that had fixed repayments (such as mortgage repayments) and the high interest rates that went with them (they move togeter - its called the Fisher Effect - https://moneyterms.co.uk/fisher-effect/ https://moneyterms.co.uk/fisher-effect/ ) meant lenders were willing to lend a much lower multiple or income. In most places (and definitely in the UK) house prices were much lower relative to incomes when we had 10% annual inflation.