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Setelinleikkaus: When Finns snipped their cash in half to curb inflation

jpkoning.blogspot.com

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Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#131

Post by lutusp »

> ... snipped their cash in half ...

Actually, they snipped their cash in two, not in half.

This is one of several afflictions that lurk in modern language, ignored by nearly all. Another is the use of phrases like "similar effect to ..." where "effect similar to ..." is the correct form. Notwithstanding how it grates on one's ear, this second egregious malaprop seems to be the preferred form.

Oh, well. Since print is today either dead or dying, largely replaced by chatbot-generated prose, this kind of complaint might be likened to critical assessment of a cave drawing.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#132

Post by hgomersall »

FuriouslyAdrift wrote: post #126
hgomersall wrote: post #67

Earlier quoted context omitted.

Please do show this very strong evidence that the effect is any more than the supply chains sorting themselves out. Even some within the CBs are doubting the causality. Japan had the lowest inflation of any major economy post COVID, and yet persisted with essentially a ZIRP. There's a good argument that in our high reserves world, interest is actually inflationary.

This is the result of demographic crash and stagnation more than anything else...

You mean interest rates don't necessarily control inflation?

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#133

Post by kmeisthax »

_heimdall wrote: post #68
mock-possum wrote: post #5

The convenience of cutting paper money in half is a really anachronistic element of this tale - I’ve got a fair amount of money saved up, and approximately none of it exists as paper, so much as it exists ‘on paper’ - that is, as figures marked in a bank’s digital ledger, somewhere in a server farm. How would an effort like this be handled today? … a new crypto currency?

That is basically one of the conspiracy theories I have heard related to central bank digital currencies. As the tale goes, eventually major banks will run into another financial crisis (possibly intentionally if you really like conspiracy theories). The government will say they have no choice but to step in, and their solution will be to open the federal reserve to the public as a government-run bank. All funds lost…

The weirdest problem I see with this conspiracy theory is that I don't see the actual conspiracy?

Like, USD is a fiat currency, it's backed by taxes. The only difference between a paper dollar in your hand, a dollar in a traditional bank account, and a dollar on the hypothetical FedCoin blockchain is how easy it is to spend, what gatekeepers are involved, and what anti-fraud/anti-theft tools you can avail yourself of. Moving from a traditional bank account to a CBDC doesn't make it any easier for the government to seize your funds - they already can do that just fine with basically anything.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#134

Post by mbar84 »

xadhominemx wrote: post #122
insane_dreamer wrote: post #98

Earlier quoted context omitted.

That's just one mechanism, but not the primary way in which the Fed controls interest rates. The Fed is a large provider of short-term loans ("fed funds") to cover interbank exchanges. It also is the lender of last resort and lends to banks directly ("discount rate"). By changing these rates, the FED can influence the rates the banks charge each other for loans, and down the line to consumers.

You are correct. Striking how many HN commentors are so often confident and yet wrong...

Was he really that wrong? Isn't a bond just another debt instrument? It's not obvious to me, that there is any fundamental difference between the operations that both comments describe.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#135

Post by noinsight »

Seasandthequote wrote: post #108
Yawrehto wrote: post #81

I wonder what the cleansing element of it in Finland was, given that they voted to join the Axis.

you mean WWII? If so, this is just wrong, no-one in Finland "voted" to join the Axis, she was not technically a part of Axis and didn't want to side with Germany at all. GB and Sweden were first asked but they weren't able to help in the defence from Soviet Union. AFAIK they weren't fighting anywhere but their own territory

Finland did cross the old borders in parts, but we specifically didn’t participate in the Siege of Leningrad and refused all German demands for assistance.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#136

Post by poincaredisk »

nostrebored wrote: post #116
ArnoVW wrote: post #29

Earlier quoted context omitted.

From your perspective the war started in 2022. In reality that phase of the war started before. Russia did not improvise this war. They started disrupting the supply in 2021 to ensure that Europe would not fill their strategic reserves / winter storage during the summer, thus insuring maximum leverage when they needed it. This is well documented [1] Note that this is just talking about this phase of the war. Hostilit…

Nobody has sabotaged European energy security more than European governments. The divestment from nuclear and reliance on LNG was an obvious disaster in the making. Taiwan has made a similar blunder and will pay the price at the next whiff of geopolitical instability.

You've just read how Russia literally sabotaged European energy security and you compared this to... some European countries taking a suboptimal decision?

And Europe is not a single country. My country still happily digs out and burns tons of coal (annoying our neighbors in the process). I hope you're proud of us.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#137

Post by rpmisms »

jmyeet wrote: post #130
eru wrote: post #25

> It's not just the size of Operation Gutt that is striking to the modern eye. It's also the oddity of the tool being used. Today, we control inflation with changes in interest rates, not changes in the quantity of money. To soften the effect of the global COVID monetary overhang, for instance, central banks in the U.S., Canada, and Europe began to raise rates in 2022 from around 0% to 4-5% in 2024. It's a bit more i…

> Simplified: the central bank decide on an interest rate that they want to see. This is incorrect. Using the US central bank example, the Fed has a target for inflation. It uses interest rates to try and hit that target. If inflation is higher than 3% the Fed will raise rates to cool the economy. The Fed sets interest rates directly because lending money to the Fed is viewed as "risk-free" (as the US government has…

The false equivalence of a profits tax and redistributing wealth to the poor is quite funny.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#138

Post by poincaredisk »

lutusp wrote: post #131

> ... snipped their cash in half ... Actually, they snipped their cash in two , not in half . This is one of several afflictions that lurk in modern language, ignored by nearly all. Another is the use of phrases like "similar effect to ..." where "effect similar to ..." is the correct form. Notwithstanding how it grates on one's ear, this second egregious malaprop seems to be the preferred form. Oh, well. Since print…

This is a standard English idiom: https://dictionary.cambridge.org/thesaurus/cut-in-half. You may not like it, or think it's illogical, but that doesn't make it incorrect.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#139

Post by _heimdall »

kmeisthax wrote: post #133
_heimdall wrote: post #68

Earlier quoted context omitted.

That is basically one of the conspiracy theories I have heard related to central bank digital currencies. As the tale goes, eventually major banks will run into another financial crisis (possibly intentionally if you really like conspiracy theories). The government will say they have no choice but to step in, and their solution will be to open the federal reserve to the public as a government-run bank. All funds lost…

The weirdest problem I see with this conspiracy theory is that I don't see the actual conspiracy? Like, USD is a fiat currency, it's backed by taxes. The only difference between a paper dollar in your hand, a dollar in a traditional bank account, and a dollar on the hypothetical FedCoin blockchain is how easy it is to spend, what gatekeepers are involved, and what anti-fraud/anti-theft tools you can avail yourself of…

I believe the conspiracy portion of that theory is that the financial crisis would be triggered, or allowed, intentionally to create the excuse for a CBDC and fed bank.

I don't see it as likely, just a theory I've seen floated.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#140

Post by rf15 »

xadhominemx wrote: post #122
insane_dreamer wrote: post #98

Earlier quoted context omitted.

That's just one mechanism, but not the primary way in which the Fed controls interest rates. The Fed is a large provider of short-term loans ("fed funds") to cover interbank exchanges. It also is the lender of last resort and lends to banks directly ("discount rate"). By changing these rates, the FED can influence the rates the banks charge each other for loans, and down the line to consumers.

You are correct. Striking how many HN commentors are so often confident and yet wrong...

You are wrong. Striking how many HN commentators are so often confident and yet wrong in their assumption that everything is about the US.
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