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Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

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Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#51

Post by benj111 »

buboard wrote: post #48
benj111 wrote: post #43

Earlier quoted context omitted.

What is the intrinsic value of btc? I can't eat it, use it to heat my house. It has value, most of it isn't intrinsic though.

u can convert it to USD, so it must have some value or else people wouldn't buy it

Yes it has value you can trade a bitcoin for $5k/$10k/$20k whatever the exchange rate is at this moment. That isn't intrinsic value though.

From Wikipedia: "In finance, intrinsic value refers to the value of a company, stock, currency or product determined through fundamental analysis without reference to its market value."

https://en.m.wikipedia.org/wiki/Intrinsic_value_(finance)

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#52

Post by stale2002 »

damnyou wrote: post #41
buboard wrote: post #20

Earlier quoted context omitted.

Thats the beauty of decentralization. You can't really blame one person for bitcoin's value today, you have to blame everyone who participates in it (Really, who would the congress question, and what could that person do? take down bitcoin?). While Libra is centralized so single point of failure

There are no decentralized cryptocurrencies. Like all other so-called "decentralized" coins, Bitcoin rewards economies of scale. That means that it tends towards centralization. Though of course Bitcoin has its own unique problems, like being deflationary (which is evil).

What? Are you aware that all commodities are basically deflation?

Do you think it is "evil" to buy commodities?

This is all about freedom of choice. If you don't like the properties of certain products, then buy the one that you like.

But lots of people would apparently prefer to spend their own money on deflationary assets. Who are you to say it is evil to do this with assets that one owns?

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#53

Post by rtkwe »

benj111 wrote: post #49
rtkwe wrote: post #40

Earlier quoted context omitted.

The operative word there is requirement. Banks in 0% reserve countries don't have to keep cash around but do to serve as their actual functions as banks.

What countries are we talking about here? As far as I'm aware most developed nations have capital requirements for the banks. Whilst maybe not stating a minimum % reserve, in practice they do need to keep reserves for those capital requirements.

I don't know I was just answering your question about deposits.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#54

Post by tyre »

tlb wrote: post #35
TheRealPomax wrote: post #6

My main concern about libra is that, by being strongly tied to real currencies, libra issuers (not just facebook, all of them) have effectively assumed the role of unsanctioned mints, with the ability to damage the stability of each currency because libra is not tied to the international exchange system: if you pay facebook, or anyone else, $10 and they convert that into libra, now they have $10 that they will absolu…

Every bank and credit card is also an unsanctioned mint. It works fine. The actual minting of money has not been a major factor in managing the money supply in a long time. It's all done by setting interest rates.

> The actual minting of money has not been a major factor in managing the money supply in a long time.

Very much not true.

Quantitative easing, the process of minting money to inject liquidity into the economy, was a core tenet of the Obama administration’s* response to the Great Recession. Literally trillions of dollars created to purchase bonds and mortgage backed securities to prop up the economy.

Edit: It was during the Obama administration but implemented by the Fed, which is independent of the White House administration (thank god.)

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#55

Post by c-cube »

cmiles74 wrote: post #26
TheRealPomax wrote: post #11

Earlier quoted context omitted.

What about Libra is exclusive to Facebook? It's not "their" cryptocurrency, they just pitched the idea. The actual power behind libra is the Libra Association, which has a lot more scary companies participating.

I don't find this at all convincing. I believe Facebook will be managing much of the physical hardware involved, likely in their existing data centers. IMHO, the Libra Association will boil down to Facebook and the payment processors who have signed on. This strikes me as very much Facebook's currency.

Each of the 28 participants will run its own hardware and validator on it (there are hardware requirements on top of the 10M$). FB might control the only wallet, initially, but not the validators.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#56

Post by kregasaurusrex »

The idea of pegging a currency's value to a basket of existing fiat currencies has already been done by the IMF as Special Drawing Rights[0], where Libra's goal is to extend a similar functionality into a living digital payment system. Transfers of XDR are restricted by its issuing bodies only to nations due to the large amount of risk bourn by having the ability to print an unlimited amount of currency, and a continued guarantee for the currency to remain solvent against its allocation baskets. Governments are right to see this as a competitor to central banking as the network operates outside their jurisdiction (including the IMF'S), avoiding payment monitoring networks like SWIFT, and Libra doesn't seem to have a well-defined plan in the case of a major liquidation event.

[0] https://en.wikipedia.org/wiki/Special_drawing_rights

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#57

Post by JumpCrisscross »

rufusroflpunch wrote: post #39

Of course he does. His job, his entire worldview, is based on technocratic control of the economy. Breaking the government monopoly on currency threatens everything about him.

> Breaking the government monopoly on currency threatens everything about him

This is naive. Breaking governments’ holds on currency would be supremely lucrative for bankers. See the American free banking era.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#58

Post by rolltiide »

tlb wrote: post #35
TheRealPomax wrote: post #6

My main concern about libra is that, by being strongly tied to real currencies, libra issuers (not just facebook, all of them) have effectively assumed the role of unsanctioned mints, with the ability to damage the stability of each currency because libra is not tied to the international exchange system: if you pay facebook, or anyone else, $10 and they convert that into libra, now they have $10 that they will absolu…

Every bank and credit card is also an unsanctioned mint. It works fine. The actual minting of money has not been a major factor in managing the money supply in a long time. It's all done by setting interest rates.

Setting interest rates AND THEN? come on you have to be able to complete that sentence, and when you do it will negate the prior sentence.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#59

Post by buboard »

rtkwe wrote: post #42
buboard wrote: post #13

Earlier quoted context omitted.

But i thought each libra must be backed by real money? i.e. when they sell 10 libra the 10 dollars go to the libra fund, and cant really circulate (but can be invested)

Investment is circulation though. They are no longer holding the $10 you spent to buy 10 Libra but $10 worth of Apple stock say that definitely isn't always worth $10 and Apple or whoever sold that stock now has $10.

They could be holding it in gold instead, what difference would it make ? You can probably take a loan with 100% gold deposit in any bank legally.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#60

Post by buboard »

benj111 wrote: post #51
buboard wrote: post #48

Earlier quoted context omitted.

u can convert it to USD, so it must have some value or else people wouldn't buy it

Yes it has value you can trade a bitcoin for $5k/$10k/$20k whatever the exchange rate is at this moment. That isn't intrinsic value though. From Wikipedia: "In finance, intrinsic value refers to the value of a company, stock, currency or product determined through fundamental analysis without reference to its market value ." https://en.m.wikipedia.org/wiki/Intrinsic_value_(finance)

alright my bad. i meant some value that is not tied to an underlying asset. But equating it with a scam like e-gold is not valid either. (and no currency or investment commodity has value that is anywhere near its intrinsic value)
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