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Do We Need Central Banks? (2017)

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Re: Do We Need Central Banks? (2017)

#171

Post by sergiosgc »

bwanab wrote: post #155
sergiosgc wrote: post #138

Earlier quoted context omitted.

I also noticed that, and it raises concerns. However, the intro, the questioning of the fundamentals when faced with evidence that contradicts the assumptions, is long overdue. When interest rates entered negative territory, something deemed formally impossible a decade earlier, a huge alarm should have sounded in Economics. Instead, we got some after-the-fact explanations that are untestable, and continue applying t…

No economist believed that negative interest rates were formally (or informally for that matter) impossible. You might find arguments that real rates (nominal rate minus inflation) should never be negative, but in a deflationary environment nominal rates can go below zero without violating that.

Yes, of course, in a deflationary environment, rates can be negative. We are in an inflationary environment, though. Zero was thought to be a hard limit -- in terms of interest rate efficacy as a lever to act on the economy.

Now, the mantra is that near zero negatives are still within the efficacy envelope. It was not predicted, but stated after the fact. This is, to me, a clear sign that the model is wrong, and should be reviewed with no barriers to questioning basic assumptions.

Re: Do We Need Central Banks? (2017)

#172

Post by TomMarius »

eumenides1 wrote: post #137
TomMarius wrote: post #20

Earlier quoted context omitted.

Really? In many parts of the world (outside of the US, e.g. Georgia), dollar is used/accepted even for taxes.

Yes, but accepting a foreign currency as your defacto currency is IMO insane. US sets monetary policy for the US and the US only. So if US raises interest rates to combat inflation that is occurring in the US. Georgia by default accepts this position regardless of what is actually happening in Georgia. If Georgia has deflation occurring, then this is bad for Georgia. If you want to be a "Big Boy" country, you have to…

Georgia is trying hard, but Russia isn't making it easy for them.

Re: Do We Need Central Banks? (2017)

#173

Post by shanghaiaway »

TomMarius wrote: post #172
eumenides1 wrote: post #137

Earlier quoted context omitted.

Yes, but accepting a foreign currency as your defacto currency is IMO insane. US sets monetary policy for the US and the US only. So if US raises interest rates to combat inflation that is occurring in the US. Georgia by default accepts this position regardless of what is actually happening in Georgia. If Georgia has deflation occurring, then this is bad for Georgia. If you want to be a "Big Boy" country, you have to…

Georgia is trying hard, but Russia isn't making it easy for them.

What does this have to do with anything Nothing

Re: Do We Need Central Banks? (2017)

#174

Post by EGreg »

DoctorOetker wrote: post #167
philipwhiuk wrote: post #118

Earlier quoted context omitted.

> There are far better ways. Citation needed since PoS / PoW is the way Bitcoin uses to solve the many generals problem.

Algorand's solution is in fact pure genious, however there is no implementation yet (that I know of, if someone knows of an implementation, please let me know!).

Wht is so great about it specifically?

Re: Do We Need Central Banks? (2017)

#175

Post by DoctorOetker »

EGreg wrote: post #174
DoctorOetker wrote: post #167

Earlier quoted context omitted.

Algorand's solution is in fact pure genious, however there is no implementation yet (that I know of, if someone knows of an implementation, please let me know!).

Wht is so great about it specifically?

The fact that proof of work is proven unnecessary to perform sortition/rate limiting the right to propose blocks, even without needing to resort to an interactive protocol, i.e. player-replacability.

Re: Do We Need Central Banks? (2017)

#176

Post by spiralx »

brian_cloutier wrote: post #54
beefield wrote: post #47

Earlier quoted context omitted.

What is created is an IOU. A bank says that hay, I will pay 1 usd to you. And you can transfer that IOU to the coffee shop. Now, there is literally nothing stopping the "bank"[1] to make a bitcoin IOU and you to transfer that to the coffee shop owner. In that case you have increased the monetary supply of "bitcoins", as it is irrelevant for the coffee shop owner if he is receiving a bitcoin or an IOU of one bitcoin f…

This is mostly correct but you have one thing backwards. When you pay the coffee shop (with a debit card) you're not giving them an IOU, you're giving them the same kind of dollars which you originally deposited into the bank. The system does include IOUs but those don't move around. When you give your hard cash to the bank it creates an IOU, that's what the balance you see when you login is. Your bank then lends out…

If you want a good overview of how money works overall this PDF from the Bank of England is pretty approachable:

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...

There are a lot of misconceptions about money around, many based on older ideas of physical or commodity-backed currencies.

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