/biz/ - Business & Finance

>creates 1 billion tokens out of thin air

yeah all that stuff is like quaint history now like the idea of a bale of wheat being physically delivered in the futures market. banks are all just fronts for fannie mae and the socialist mortgage subsidy program that is the basis of the whole charage. centralize all the risk into a systemically critical point. no longer are banks self-interested and knowledgeable local pricers of risk. they are mcdonalds franchises with empty vaults collecting a franchise fee from fannie

>>15496129

>in 5 minutes

HOW THE FUCK DID HE GET AWAY WITH IT

>>15496129

But why aren’t they doing much to hedge against the inevitable global depression coming in a few months?
Or what are they doing that most of us don’t know?

>>15496123
You're well on your way to finding out who's responsible for all this treachery.

>>15496162
The Finno Korean hybrid race
They’ve been undercover for many millenniums posing as khazar jews

>>15496123
well it wasn't fiction centuries ago, it is for the most part now.

>>15496161
It's impossible to have a depression, they'll just print more money. What would you do with the money you worked so hard for(2 years wages saved up) when you find out it will be worth two months wages in a few weeks? You'd go spend it to preserve what little buying power you have.

>>15496161
Hoarding boomer rocks

>>15496184
Works for me

>>15496238
at least in the Eurozone, we seem to be getting to the limit of money creation. if rates become much more negative, banks will begin to hoard paper currency. and QE doesn't have a multiplier effect--it only boosts asset prices. the ECB is nearly at the legal limit of the amount of european government bonds it is allowed to own. Japan's central bank is also at that limit...

>>15496238
>It's impossible to have a depression, they'll just print more money.

that's very naive and short sighted. This is what they've been doing for the last 50 years or more. Once the value of currency goes down beyond the people's ability to produce, you can't print your way out of that. It just hasn't happened in america, but it has happened many times in south america, africa and asia. People revolt, there is huge chaos, a huge wealth transfer from the middle class to the upper class and a new currency is reinstated. Just because it hasn't happened in america or europe (not really, it has happened in europe with the introduction of the euro, only no one revolted since it didn't immediately meant people would get kicked out of their houses) doesn't mean it will never happen.

The dollar has been artificially pumped up for decades, through the petrodollar, military interventions, mass migrations to devalue labor value and market manipulation. However, an eventual crash is unavoidable.

>>15496123
You are correct, OP.

>>15496238
Though it is always possible to avoid a recession, it's still possible to have one, as the meme that spending less equates to economic responsibility is still very powerful.

>>15496296
The Eurozone is handicapped by the Growth and Stability Pact which prevents governments putting sufficient money into the economy when it's needed. AFAIK there's nothing comparable in Japan.

>Once the value of currency goes down beyond the people's ability to produce, you can't print your way out of that
In recessionary conditions there's a shortage of demand, not a shortage of production ability.

And if you look at conditions where currencies have collapsed, you'll see most instances involved the government trying to hold the currency's official value above its market value. And the rest either involved foreign currency debt or lack of an effective taxation system.

Bump

government money is embedded in the system, so it's only purpose is to shift between assets - holding cash, CDs, bonds, etc is all brainlet tier when central banks have a monopoly and an exclusive right to digitally print

>>15496129
>sells another 700k

>>15497016
>In recessionary conditions there's a shortage of demand, not a shortage of production ability.

a shortage of demand implies a lowering of wealth production. While the "ability" itself is not hampered, production is lowered and wealth is produced at a lower pace.

>And if you look at conditions where currencies have collapsed, you'll see most instances involved the government trying to hold the currency's official value above its market value.

which is exactly what has been happening with the us dollar and most first world currencies in the last 50 years.

>And the rest either involved foreign currency debt or lack of an effective taxation system

news flash: all debt is "international" debt that has to be repaid to private entities and the government itself (the fed is not part of the government per se) cannot print money to pay that debt.

as for the effective taxation system: It tends to stop working when the economy becomes stagnant.

>>15496507
>eventual
That can be a very long time

>>15497418
>That can be a very long time

yeah. this is a very real possibility. the current system has cheated its way out of crashing for an amazing long time already.

>>15497369
It’s probably also worth mentioning that reserve currency shifts are usually coincident with major wars. Just sayin’

>>15496129
>cant create any more

>>15496145
criminally underrated post

>>15497451
Within our lifetimes at the very least. But you never plan for a bubble to be sustained

>>15498027
so are all instances of when a country tries to switch to a gold standard

>>15498400
This is relatively recent. Historically all the reserve currencies (and their competitors) were backed by gold or specie in some form or another. Genuinely initiates introspection

The holocaust didn't happen but it should have!!! Please use metal doors instead of wooden ones next time krauts!!!!

>>15499040
kys

Bump

>>15496129
> Has to put in effort and create a product that drives the value of the billion tokens

Bump

Bump

>>15496123
The funniest thing is that there's no secret, the current monetary system just literally works against your mind. You cannot explain it adequately without a history lesson and even then it makes your brain hurt.

>>15500481
And even though central banks will tell you this is how things work, if you describe it to people they will think you're a nut, and colleges won't teach it. wot?

jews.... illuminati..... 9/11.... its all connected....

>>15496123
Isn’t that what crypto is? There’s 2,500 different fiat crypto “currencies”. Shitcoin has 71% market share.

Absolutely ignorant and delusional on the level of flat-earthers. Imagine being so stupid you end up a by-catch for gold marketing aimed at senile baby boomers.

>>15501081
not an argument

>>15501054
Shitcoins aren't money because no merchants accept them, I can't use them to settle debts or pay my taxes. They are digital pogs.

you can only print money to far!!! and than it'crashes way worse than not printing!!!

>>15501081
t. Doesn't understand modern banking

>>15501334
Bitcoin merchant adoption is on a downward trend with no chance of recovery but maximalists delude themselves by focusing on the price.

>>15500269
>no customers
>the value of the billion tokens

>>15496123
Yep, now by RSR and short circuit the pretend money machine.

yep

Bump

>>15501650
Bitcoin has the network effects tho

FUCK BANKS
FUCK LOANS
FUCK THE FEDERAL RESERVE
FUCK THE JEWS
FUCK FRACTIONAL RESERVE BANKING
FUCK DEBT
FUCK BONDS

AND FUCK THE JANNIES

>>15502401
Yep it's a powerful ponzi. In terms of real adoption though, it has negative feedback loops. The more people who use bitcoin the more unusable it becomes so people stop using it. People used to cheer whenever another retailer accepted bitcoin. People would say "imagine the price when eBay/amazon start accepting btc". Then in 2017 most places that had been accepting btc stopped accepting it because it became unusable.

>>15502475
imo jury is still out on LN
what crypto do you think has the most promise of replacing globohomo fiat paper

>>15502489
no shitcoin will ever do the job. Certainly not an ERC20 shittoken

>>15502489
Monero.

>>15502562
needing the full chain and to be always listening to receive a transaction is untenable

>>15502604
You might be thinking of Grin/mimblewimble

>>15497369
>a shortage of demand implies a lowering of wealth production. While the "ability" itself is not hampered, production is lowered and wealth is produced at a lower pace.
The shortage of demand may RESULT in a lowering of wealth production, but it can be addressed by printing more money, unlike a shortage of production ability.

>which is exactly what has been happening with the us dollar and most first world currencies in the last 50 years.
Fifty years ago it was like that, but we've moved on. Most first world currencies have abandoned the system of fixed exchange rates, so the currency value is set by the market not the government.

>news flash: all debt is "international" debt that has to be repaid to private entities and the government itself (the fed is not part of the government per se) cannot print money to pay that debt.
America could, if needed, nationalize its central bank just as every other country has done. Although there isn't really any need, as there's never any shortage of potential creditors willing to lend it money to pay its old debts.

>as for the effective taxation system: It tends to stop working when the economy becomes stagnant.
I dispute that - when the economy becomes stagnant it brings in less money, but that's a feature not a bug. It's sensible for the government to take less money out of a stagnant economy.

Anyway, if the currency is starting to collapse, the economic conditions would be far from stagnant.

The only silver lining to the collapse will the the silver lining in my pockets.
Whatever happens in the immediate few years will be turbulent but not a 1776 event. Currency swap for sure.

>>15501380
True for fixed rate currencies
False for floating currencies.

>>15502757
Which is essentially how we’re in our current predicament.
>hey, let’s all of us float our currencies against other floating currencies so we can all print money slowly devalue against each other and the general public won’t notice because it’s slow and we can bribe them with gibs

>>15496161
>dumb kid #1009929 that thinks a depression is coming

>>15502875
>this is sustainable

Bump

>>15502852
What exactly do you imagine our current predicament is?
You seem to have failed to notice our inflation rate is very low at the moment. The problem is not the result of too much money, but too little.

>>15503291
Consumer prices are low. Asset prices are not. Good luck buying a home. Or retiring. Plus, low inflation expectations now is no guarantee of low future inflation. We are in unprecedented times. Plus, deflation isn't necessarily a bad thing. It's only harmful because our economy is predicated upon building increasingly unsustainable debt levels.

>>15500961
Welcome to normie world

>>15502911
what am I looking at here?

>>15502911
sure it is, they keep smashing print button and the graph keeps going up kek

>>15502911
The money stock reflects the global demand for USD, which in turn reflects the global weakness for all other currencies but the USD; those dollars and T-bills aren't being recirculated except when foreign central banks need to devalue the currency versus the dollar to maintain competitiveness for manufacturing. All other major economies are more or less reliant on US consumers to keep their shitpile systems afloat because none of them ever developed a sizable consumer base after they developed or re-developed.

>>15496123
anyone can create money. figure it out.

>>15503339
>Consumer prices are low. Asset prices are not.
Yes, although that problem predated the GFC. The government could solve the issue by taxing the unimproved value of land - it's the best possible course of action economically, but not so attractive politically.

>Plus, low inflation expectations now is no guarantee of low future inflation.
Technically true, because it's not the expectation alone that's significant, but the conditions that produce it. Inflation can be addressed quite quickly by increasing taxation (to increase the money the government takes out of the economy), cutting government spending (to decrease the amount of money the government puts into the economy) or raising interest rates (to decrease the amount of money the private sector puts into the economy). So inflation will never be given the opportunity to get anywhere near as high as it was in the late 20th century.

But increasing automation is the main reason why the inflation rate is set to stay low.

>Plus, deflation isn't necessarily a bad thing. It's only harmful because our economy is predicated upon building increasingly unsustainable debt levels.
No, it's harmful because it destroys the opportunity to make money. It's not certain to do so, but if you look at the rates of unemployment and underemployment you'll see it is at the moment.

The amount of debt the government can sustain is unlimited )as long as it's all in the currency it prints). The amount the private sector can sustain isn't unlimited at any time, but rises when productivity rises or interest rates fall or inflation occurs.

>>15504455
you're never gonna make it

I wish I was American so I could buy VAT free silver fuck my life

>>15504498
Me personally? Or me and who else?
Make what?

>>15496145
how long can they keep it going?

>>15498052
>>15500269
linkies on cope watch

>>15504600
new

>>15496129
God I wish that were me.

>>15503339
>We are in unprecedented times
I agree with you, but I think people pretty much always feel this way. No one ever feels like there is much precedent for the current state of affairs. They never say “this is just like the last crisis,” even if they’re literally going to war with the same people they fought before.

>>15500961
?? Every economics professor will tell the class that fiat is unbacked in 101. Nobody really cares because the system hasnt collapsed yet

>>15502462

>>15505051
It's not that it's unbacked, most people get that. It's that money is created every time a loan is issued. That just comes out of nowhere but people imagine that it comes from some other money held by the bank like savings accounts.

>>15505690
Isn't it technically backed by the collateral you give when taking a credit?

>>15504603
forever unless something changes

>>15506433
Very good point.

>be central bank
>cause economy to collapse with credit bubble
>"save" the economy by buying up real assets with printed money

>now you own all the land and the productive capital, and the goyim think the rodeo clown did it

>>15506510
>>15506433
Someone debunk me please

>>15496184
Funny how nobody ever blames the buddhists for usury, or gets mad that the Swedes are manipulating global markets. Isn't it weird how it's always the same type of people, over and over that keep doing the same old bullshit? Those damn reptillians always fucking everything up.

>>15506433
>Isn't it technically backed by the collateral you give when taking a credit?
It’s still money created from literally thin air. I ran a company a decade ago that used CDs as collateral for business loan of 1.5 mill. At 1 to 1. So effectively had 3 million instantly

>>15496129

fpbp

>>15496129
pump and dump

bsv proof of work $1k eoy

>>15506433
>>15506713
If you consider debt an asset then I suppose you're correct, but banks loan at a rate of 32:1 (sometimes higher,) on their own liquidity, so the entire system becomes dependent on there always being enough people in debt to back this inflation and that's a problem. When not enough people are taking out loans, the money deflates in value, but there are only so many low risk credit borrowers and when banks start lending to too many bad credit risks it builds into a massive crash. And that's setting aside the moral arguments surrounding debt = slavery.

>>15504303
>The money stock reflects the global demand for USD
Which is a function of interest rate policy and QE, which the Fed is responsible for.

>>15504455
>Inflation can be addressed quite quickly...
Hubris like yours scares the crap out of me. God help us if the Fed is like-minded.

>No, it's harmful because it destroys the opportunity to make money
If a business's inputs are getting cheaper too, everything is fine. The problem is when your inputs and outputs shrink but your debt burden doesn't.

>>15506713
Suppose an asset bubble scenario in which there is a single asset that is continually being bidded up in price, and with the purchase being financed by debt. Money is literally being created as the asset trades back and forth. The real assets in the system has remained constant.

>>15504603
I should add that a lot of countries have restrictions on foreigners owning real estate. The USA does not. And the fact that now all of europe is being paid to borrow money and china seems to be experiencing capital flight both bode well for US real estate, all else equal. As far as domestically, it seems we are at a point where wage growth is needed to propel domestic demand further but supply in many places is locked down due to zoning and lack of land, many of these places have the most demand, and people with paper gains on their house in these places can't really cash out unless they are retiring and moving to florida or something, without taking a downgrade or having a very mobile career. I get the sense that credit has been much more selective over the past 10 years, and so something like 2008 isn't likely any time soon.

Since this thread is going well and seems to have some smart people in it, maybe someone can explain to me:

Why is so much attention placed on the Federal Funds Rate, and not the Interest Rate on Excess Reserves or the Interest Rate on Required Reserves. It's those rates that actually govern credit creation and set the floor on the loan rates banks will be willing to give, are they not?

>>15507059
>Money is literally being created as the asset trades back and forth.
Why should money be created? You are just betting more and more collateral (house, car, jewelry) against the same asset. A bank would not let you loan more than you can give as a collateral.

>>15507984
This example assumes the price of the asset is going up. Money is being created if you assume the loan to value remains constant. This follows from the definition of broad money.

>>15507204
ez answer.

They need the IOER to be set right, so that they can actually control the federal funds rate.

https://www.bloomberg.com/news/articles/2019-05-01/fed-makes-third-tweak-to-interest-on-excess-reserves-rate

>>15507204
>>15508535
"The Fed says the move is designed to promote trading in the fed funds market at rates “well within” the Federal Open Market Committee’s target range. In theory, the shift discourages banks from parking money at the central bank -- where they’re paid IOER -- and prompts them to instead seek better rates by lending in other short-term markets, particularly fed funds."

>>15508563
The Fed only started using IOER to control FFR in 2008. I'm guessing this was an underhanded way of recapitalizing the banks. Does the Fed no longer perform open market operations to control the FFR? Seems like it also provides the Fed a more effective way of setting the rate but that they required the crisis to actually implement it.

>>15496296
>banks will begin to hoard paper currency
And here the lobby for limiting and abolishing cash steps in with inflated claims of criminality and/or obsolescence.

>>15500961
>to people they will think you're a nut
Your typical normie believes everything in society is a result of planned construction, even the typical conspiracy people just assume the plan is evil. Trying to explain that our economies runs on centuries old duct-taped junk is nearly pointless. It's a rare case of something too simple to understand.

>>15502462
This

>>15506713
Not all loans are collateralized, for starters. Also, the value of any collateral depends on market conditions - for example in a typical housing bubble residential properties are bid up by lenders, then price falls when they are all sold at the same time.

>>15507039
>Hubris like yours scares the crap out of me
OK, what makes you think inflation can't always be addressed quite quickly?

>If a business's inputs are getting cheaper too, everything is fine. The problem is when your inputs and outputs shrink but your debt burden doesn't.
Lower interest rates prevent the debt burden from doing the damage it otherwise would.
Rising productivity prevents your outputs from shrinking.
And inflation results in your debt burden shrinking relative to your inputs and outputs.

>>15496296
>higher asset prices dont have a multiplier effect
Sure it's more muted, but its still there.

>>15508852
> OK, what makes you think inflation can't always be addressed quite quickly?
First, historically, when countries have suffered inflation, they've found it difficult to break. Second, you ignore the role of faith in the currency. If people lose that, good luck.

> Lower interest rates prevent the debt burden from doing the damage it otherwise would.
> Rising productivity prevents your outputs from shrinking.
> And inflation results in your debt burden shrinking relative to your inputs and outputs.
All true but doesn't argue against what I was saying. There's nothing inherently wrong with deflation. The problem with it in practice is the orientation of our economy towards ever increasing levels of debt.

>>15508871
It boosts the money supply but there's no multiplier and from the banks' perspective they are simply intermediaries to the transaction. And if you disagree the Bank of England would be on my side. https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

bump

>>15504511
>he doesnt have an offshore bank account that he uses for online purchases to avoid VAT

step up nigger

bump