211–220 of 246 posts
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You are wrong. Striking how many HN commentators are so often confident and yet wrong in their assumption that everything is about the US.
When it comes to the government treasury markets by volume (which back the global financial system), it objectively is.
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I'm Russian, and I've been following the mess in Ukraine very closely since 2014. The key word in my single sentence is "workable". All Russian peace deals so far essentially amount to 1) they get all the territory they claim, and 2) they pinky promise to not invade Ukraine again, but 3) Ukraine is forbidden from taking actions - such as joining NATO - that would actually guarantee that such an invasion wouldn't re-o…
Appreciate the clarification. That said, I'd be curious to know why you seem to implicitly accept the Russian regime's currently stated (or reasonably inferable) terms as the only "workable" terms. Is it because you think it has that much of an upper hand in the situation (to get its way no matter what the West does in the coming months) -- or because the Trump administration will likely simply cave in to pretty much…
What's actually workable in the end depends solely on how far the West is willing to go, IMO. There's no realistic scenario in which Ukraine retakes all the captured territories without direct Western military involvement - air at the minimum - which is certainly not politically tenable in either US or Europe (although my personal opinion is that both will eventually regret not getting directly involved now, because they will be forced into a larger war later anyway).
Russia will definitely not give up Crimea without getting military defeated there; quite aside from any military value of Sevastopol, the symbolical and political value is just too high, especially for a regime that desperately needs to be seen as "patriotic" by the populace - that is their only real source of legitimacy in the absence of real democracy. Abandoning LNR and DNR would be easier in some ways, but harder in others because the government agitprop has already spent so much time vividly describing how "Ukrainian Nazis" are supposedly ethnically cleansing Russian speakers to justify the invasion, abandoning them now would also be very costly in terms of popular support.
OTOH I could see the pre-2022 de facto borders as something Putin would accept. They could still justify the war then by claiming that, at least, LNR and DNR were "rescued" and are now safe from further depredations, and that people from other regions that couldn't be "liberated" will be resettled, so - mission complete, oooorah etc.
However, I don't see why they would do that if the West keeps dragging its legs on military support to such an extent that Ukrainians can't even reliably hold what they already have. The way things are going, Russia can keep doing what it's doing, even despite the insane cost in human lives, for longer than Ukrainian military can hold the line. Ukrainians have less of basically everything - artillery, drones, people. They make do by making much more efficient use of what they have than Russians do, but it's still too skewed to be sustainable.
And meanwhile the West hasn't even drawn any clear red lines on how much of Ukraine Russia would need to take before the support would be seriously ramped up - if at all. So then, when Russia sees that support is already at levels insufficient to sustain Ukraine, and it's likely to dwindle significantly with Trump, and it has the upper hand in terms of momentum right now... I don't see why they'd suddenly want a deal.
OTOH if US and Europe doesn't get involved directly but start treat their role as the "arsenal of democracy" in this conflict seriously, it might just be enough for Ukraine to hold the line in the east and in Kursk. And then they might be able to trade that captured Russian land for a peace deal with some concessions - maybe not quite pre-war borders, but at least push the new border away from large cities like Kharkiv and Kherson. However, any such deal would be pointless for Ukraine unless they get proper security guarantees; and, given the whole history with Budapest Memorandum, the only guarantee that Ukraine will actually believe in at this point is NATO membership. AFAIK that is the main reason why popular support there is still in favor of continuing the war and rejecting the current Russian offer - they elected Zelensky largely as a peace offering to Russia and effectively acknowledged the de facto existence of LNR and DNR, and all they got for that is an even larger invasion, so it's a "fool me twice" kind of deal now.
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>> This is what drove and still drives inflation directly and indirectly QE is fascinating. On the one side of QE you have central banks, absolutely baffled by the fact they create all these reserves, we’re talking utterly un-relatable numbers for a human, numbers that belong in the field of astronomy rather than finance. And yet they fail to hit their inflation targets for over a decade. On the other side you have a…
> We don’t have fractional reserve in the USA, the UK, Aus etc and haven’t had for a number of years at this point. What do you mean by that?
- Currency no longer has to be backed by some fraction of shiny objects,
- Banks do not need to arrange CB reserves before making loans -- they make loans and then secure the needed CB reserves.
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> The onset of inflation correlates more closely with global energy supply shocks than with changes in QE policy or “printing” money in Covid stimulus. Hmmm. [1] > USA, the UK, Aus etc and haven’t had for a number of years at this point Indeed, the US abolished the 10% reserve requirement in 2020. Crazy. I hope you guys also save in inflation hedges. [1] https://fred.stlouisfed.org/series/M2SL
Canada (and other places) never had a reserve requirement, and they are doing fine. Reserve requirements are mostly bullshit anyway. What you want is for banks to have enough loss absorbing capital. Reserves are almost meaningless.
Interesting read but the theory about cash going away in 10 years > Cash, which is awkward to immobilize for policy reasons, will be gone in a decade or two Is a risky one. The are many culture where cash is the way to pay, you use credit card for internet but everything else is cash. I'm thinking of North Africa, which we have many of these people in Europe. There are also the old people, of course they will be gone…
Yet, in Sweden, I have legitimately forgotten how money looks. I haven't handled cash in about 7 years (I’m not even embellishing).
On the other hand, getting cash from regular white people was the exception.
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>> This is what drove and still drives inflation directly and indirectly QE is fascinating. On the one side of QE you have central banks, absolutely baffled by the fact they create all these reserves, we’re talking utterly un-relatable numbers for a human, numbers that belong in the field of astronomy rather than finance. And yet they fail to hit their inflation targets for over a decade. On the other side you have a…
> We don’t have fractional reserve in the USA, the UK, Aus etc and haven’t had for a number of years at this point. What do you mean by that?
EDIT hmm that doesn’t link directly to the relevant FAQ:
“Why did the Federal Reserve reduce reserve requirement ratios to zero percent?
For many years, reserve requirements played a central role in the implementation of monetary policy by creating a stable demand for reserves. In January 2019, the FOMC announced its intention to implement monetary policy in an ample reserves regime. Reserve requirements do not play a significant role in this operating framework.
As announced (Off-site) on March 15, 2020, the Board reduced reserve requirement ratios to zero percent, effective March 26, 2020, in light of the shift to an ample reserves regime. This action eliminates the need for thousands of depository institutions to maintain balances in accounts at Reserve Banks to satisfy reserve requirements, thereby freeing up liquidity in the banking system to support lending to households and businesses.”
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Canada (and other places) never had a reserve requirement, and they are doing fine. Reserve requirements are mostly bullshit anyway. What you want is for banks to have enough loss absorbing capital. Reserves are almost meaningless.
What is the difference between a reserve and loss absorbing capital?
In a “model” sense for want of better phrasing that eludes me right now… One is infinite (via the discount window for reserves) and the other is very much finite.
In a hard legislation sense, capital is complicated, Basel regs recognise different types of capital and value them differently. But the tier 1 stuff is the equity you put into the bank to get it started or to support expanding its operations.
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It's not really complex, GP is correct. High energy prices cause high transportation and manufacturing costs which causes everything else to rise. But the main cause of inflation is printing of money, especially when you introduce such a large amount in such a short time. People used to know that, they either pretend it's not true now or they're ignorant. And yes the "bad faith" parrot line is really annoying and doe…
> It's what people say when they don't have a rebuttal Only I have a rebuttal, and came with receipts from Eurostat. So what exactly are you trying to argue? > But the main cause of inflation is printing of money, especially when you introduce such a large amount in such a short time. The original premise (which is still in bad faith, however much you dislike that part) was that money printing was the main cause. And…
> To our modern sensibilities, this is a wildly invasive policy. is it? not really cutting the "value" of money in half always had been a important emergency tool countries had and sometimes used and "moving" half of the value into a found which even pays out some years later is tbh. quite a fair way to do it (instead of just literally halving the money value permanently)
> quite a fair way to do it Are your parents retired? Ask them if they think this was fair.
is it grate, no, obviously not
but it probably the best thing they could do, or at lest relatively close to it
like ware economics are tricky as while they boost economy, especially on paper, they also hollow out a countries economical foundation and avoiding a huge crash when transitioning to peace economy is really really hard
I mean why do you thing the US government helped rebuild (west) Germany after WW2? Good will? German immigrants insisting on it? Maybe on personal level, but not really on governmental decision making level. But what it did was to help them avoid a huge post war economy crash by directing overproduction/monetary value from the US into west Germany. (It also helped in the cold war to not have a weak potentially failing state at the border to the Soviet union, helped geopolitical, and gave them a very huge influence in Europe for decades to come, much much more then they otherwise would ever have been able to get. So a win win win for everyone involved. Still moving monetary value from the US out of it to avoid a huge post ware economy crash was a huge part of it. Through you could argue the US is permanent stuck in a partial war economy and as such their move from war economy wasn't to peace economy but to partial war economy and as such less dangerous, but that is a totally different topic.)
Not everything which is necessarily and in context of the issues of a specific time one of the more fair solutions is fair in other times or good, or liked. But taking things out of context never helped.
> To our modern sensibilities, this is a wildly invasive policy. is it? not really cutting the "value" of money in half always had been a important emergency tool countries had and sometimes used and "moving" half of the value into a found which even pays out some years later is tbh. quite a fair way to do it (instead of just literally halving the money value permanently)
Yes it is. It's the biggest wage theft in history.
Because that would have been on of the alternatives.
With another being to not do anything and everyone losing as much or more due to inflation and a post war economy crash.
Did it suck badly, sure, obviously. But the alternatives weren't exactly better.