this is not good
France and Germany Agree to Block Facebook's Libra
521–530 of 821 posts
Re: France and Germany Agree to Block Facebook's Libra
#522I'm of course not familiar with the specific mindsets and the history of this decision, but I want to share a bit of cultural perspective from Germany that is so far not really considered in this comment section: Germany is very, very keen on preventing powerful entities from acting outside of regulation and similarly, if not more, on preventing a single entity to get in control of everything. This is largely due to…
I was hoping this would happen. It will probably become a EU thing now.
The idea of a privately controlled currency needs to die quickly. Never been a fan of crypto currency in general but Bitcoin, and the like, are accepted because they are not centralized. Your Bitcoin won't change in value or disappear because your country and another get in a fight.
Re: France and Germany Agree to Block Facebook's Libra
#523I'm of course not familiar with the specific mindsets and the history of this decision, but I want to share a bit of cultural perspective from Germany that is so far not really considered in this comment section: Germany is very, very keen on preventing powerful entities from acting outside of regulation and similarly, if not more, on preventing a single entity to get in control of everything. This is largely due to…
I agree with this comment.
Also, i think it shows a major difference in the way of doing bussiness and between the economic models most used in european countries vs the USA. Most notably the idea of a much more cooperative economy vs the highly competitive american model.
things like the rhineland model[1] are common across most western european countries for a reason, especially outside of the anglo-american sphere.
1: https://en.wikipedia.org/wiki/Social_market_economy#Rhine_ca...
Re: France and Germany Agree to Block Facebook's Libra
#524Earlier quoted context omitted.
Yet, western democracies have been centralizing more and more power every year. It's more that a premise is that western democracies want to increase the power of the government and no one else.
Is it only western democracies that you think have been centralizing power? What about countries like China, Iran and Russia? Western democracies historically have been party to increasing the power of private companies through government protection from competition (corporate welfare). The first example that popped in my head was the provision of prison labor for U.S. Steel through convict leasing. There are numerou…
It was in response to the comment above - of course autocracies are constantly trying to increase their power.
Re: France and Germany Agree to Block Facebook's Libra
#525Earlier quoted context omitted.
That doesn't sound like a full reserve though as its not 100% cash. It says right there that its partially invested in risky assets. Whether they're low risk is just an opinion. But even assuming it was a full reserve, I don't think its fundamentally different enough to be allowed to skirt the existing laws.
Fair point, its not cash. But generally in banking, cash and cash-like products are equivalent. I think they'll make public the actual investment breakdown. It's different enough from banks because its matched one for one with some asset. It's essentially a passthrough investment. The reason banks are so highly regulated is that they participate in fractional reserve banking where they take in deposits and invest in…
> But generally in banking, cash and cash-like products are equivalent.
Except it's not. Well, maybe it is "generally", but fractional reserves in particular are, by definition, central bank money, and only central bank money. So, strictly speaking, cash or central bank deposits. Not bonds, not loans, not equity. Only central bank money.
> It's different enough from banks because its matched one for one with some asset.
In other words: It is exactly like a bank. Every loan any bank ever makes is matched with some asset, if it weren't, they'd be called gifts and not loans.
> The reason banks are so highly regulated is that they participate in fractional reserve banking where they take in deposits and invest in highly risky assets.
That doesn't even make sense. How would the fact that a bank has (supposedly) lower reserve requirements mean that "regulation" is required more? The whole point of regulation and oversight is to make sure that the minimum reserve is there, not that there isn't too much reserve, and if a bank supposedly had a 100% reserve requirement (because that is what they promise their customers, say), that would , if anything, make it even more important to check that that is actually true.
The whole reason why all of that regulation and oversight exists is not because banks have promised their customers too little, but because banks over and over and over told their customers one thing, but actually did something completely different, and ususally that means something a lot more risky.
The fact that Facebook promises to do something really good is exactly zero reason to do away with mechanisms that exist to make sure that promises are held.
Re: France and Germany Agree to Block Facebook's Libra
#526They say: > “no private entity can claim monetary power, which is inherent to the sovereignty of nations” They mean, "When the establishment rigs the economy by diluting the national currency, then the establishment must not let their citizens escape the damage". People talk about a "rigged economy". Where I found in economics it really happens is 3% inflation that comes from constantly printing money. Low income and…
In the late 1800s the Democratic party under William Jennings Bryan was campaigning for bimetallism, which would cause inflation, in order to help farmers because inflation would make their debts less significant. This is one case of people wanting inflation.
Actually if you look at the history of the gold standard in the United States, and the bimetal gold/silver standard, you'll see that the gold standard is far from a simple solution and it had a lot of problems.
One of the biggest problems: how should the government decide how much gold/silver/whatever a dollar should be worth, and when should that decision be re-evaluated?
Similarly you can look at the economic damage caused by Britain bringing back the gold standard in the 1920s, and also how absurd the Bretton Woods system became over the years as the exchange rates pegged to gold started diverging more and more from economic reality. The gold standard has tons of problems.
Re: France and Germany Agree to Block Facebook's Libra
#527Earlier quoted context omitted.
Let's be honest, if Libra takes hold as Facebook wants it to, given the power Facebook already has over communications, ads and social networks, it very well could affect the capability of states to exert their own monetary policy. Not a single one of the examples you made had such a real possibility of being as big as Libra could be.
It won’t. Germany already doesn’t have control of the monetary policy for the currency it uses (the Euro). Monetary policy != taxation.
EU has many checks and balances, is governed by Germany and other like-minded countries, and has given lots of guarantees as well as an option to leave. If Facebook decides to discuss on that level, maybe an actual agreement could come out of that.
Re: France and Germany Agree to Block Facebook's Libra
#528Earlier quoted context omitted.
I’ll stick to using my money as money thanks. It works fine.
I'm glad that you live in a country with a stable monetary supply, little to no inflation and no capital controls.
Because obviously an instrument backed by foreign currencies will be the solution to capital controls?!
Re: France and Germany Agree to Block Facebook's Libra
#529Earlier quoted context omitted.
That doesn't sound like a full reserve though as its not 100% cash. It says right there that its partially invested in risky assets. Whether they're low risk is just an opinion. But even assuming it was a full reserve, I don't think its fundamentally different enough to be allowed to skirt the existing laws.
Fair point, its not cash. But generally in banking, cash and cash-like products are equivalent. I think they'll make public the actual investment breakdown. It's different enough from banks because its matched one for one with some asset. It's essentially a passthrough investment. The reason banks are so highly regulated is that they participate in fractional reserve banking where they take in deposits and invest in…
> Should Starbucks be regulated as a bank because they let you prepay for a cup of coffee?
In Germany, you might actually need a permit from the financial regulation (BaFin) if you offer gift or prepaid cards, at least if you store the value online (and maybe some other conditions).
Re: France and Germany Agree to Block Facebook's Libra
#530Earlier quoted context omitted.
This situation is a consequence of squandering the company's goodwill. All the big social media companies spent years arrogantly declaring that they --- not the people, not governments, but people in quirky SFBA meeting rooms --- get to decide what you people see, what they don't see, what's true, what's false, what's offensive, what's anodyne, what's legitimate activism and what's dastardly propaganda. As it turns o…
What would the alternative of content control be? I'd rather swap euros for libra than allow the Germans to decide what's in my news feed
but this is exactly what is happening to people not from the US.
People in SF board rooms deciding what is in our news feeds, and now the same company is arrogantly declaring it wants to play with currency too.