Show HN: Offset – Credit card powered by trust between people • Hacker News Board

Re: Show HN: Offset – Credit card powered by trust between people

#111

Post by jaekash » Tue, Jun 09, 2020, 7:43 AM UTC

fragmede wrote: post #97

jaekash wrote: post #71

Earlier quoted context omitted.

> Because all credit is also money creation! (Broad money). Anyone with a pen can create money by writing an IOU. This is one of the things the goldbugs don't seem to understand properly. I cannot do fractional reserve banking. And if I can't do that then I can't really create money. A bank can have a fraction of the real hard currency that others can spend in "reserve" (physical or electronic). I cannot do that, I c…

If I have $50 and I use my credit card, and send $50 each to my very trusted friends A, B, and C via, say, Venmo, is that not fractional reserve banking, built on top of my credit with my bank? I've not independently created any money since this only works because of my bank's credit to me, but I've still created $100, no?

Well yes, your bank did create the credit, at your request, and the money they created went to you which you gave to others. So you were instrumental in the process, but without the bank that can do fractional reserve banking none of this would be possible.

Re: Show HN: Offset – Credit card powered by trust between people

#112

Post by centimeter » Tue, Jun 09, 2020, 4:18 PM UTC

jonahbenton wrote: post #107

centimeter wrote: post #104

Earlier quoted context omitted.

If there’s no compensating benefit that necessarily requires inflation, why would I (as a rational self-interested person) ever prefer to keep any of my holdings in an inflationary asset? If you can come up with a great inflationary payment system, someone should just copy it but make it deflationary, and it’s instantly better. (Unless there is actually some killer feature that requires inflation.)

Well, I would argue credit is the compensating benefit- and killer feature- that historically goes hand in hand with inflation, and I would say it this way- credit is generally the mechanism by which assets are discovered and incorporated into the economy, thus "inflating" it (not the technical definition of inflation, of course) and benefitting all. Technical definitions of inflation are just various measures of cha…

I think I need to clarify a bit - I'm distinguishing "endogenous" inflation (money printing) from "exogenous" inflation (credit), because credit has natural feedback mechanisms that make it less/not disruptive to pricing.

The presence of credit denominated in some asset does not make the asset "inflationary", even if the effective supply can fluctuate. You can certainly have credit (and concomitant liquidity benefits) in a deflationary asset - this kind of lending happens millions of times every day when people acquire locate for a short sale in the securities market.

Re: Show HN: Offset – Credit card powered by trust between people

#113

Post by marahcole992 » Tue, Jun 09, 2020, 9:10 PM UTC

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