Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bank failures come in waves

yarn.pranshum.com

Post reply on HN
Print view View original

171–180 of 259 posts

Re: Bank failures come in waves

#171

Post by prottog »

ricardobayes wrote: post #158
frozenwind wrote: post #117

Earlier quoted context omitted.

CBDC is a another puzzle piece of a future dystopia. We're exchanging freedom for the sake of a security façade.

On the other hand, imagine what level of services we could have if it wasn't for the tax dodgers and cash in hand payments. I reckon we could fund universal basic income just from whitening the economy, in any given country.

Imagine if we just had a land value tax to replace all other taxes. Can't dodge that particular tax, unless someone is able to hide a piece of land from being seen.

> I reckon we could fund universal basic income just from whitening the economy, in any given country.

I reckon that no economy, no matter how advanced, is so productive that you can provide a systemic incentive for everyone to not produce anything yet still be guaranteed to be supported. Will some work even when they don't have to? Sure. Will more people not work than before? Almost definitely. Will this effect compound over time and topple the system sooner rather than later? Guaranteed.

Re: Bank failures come in waves

#172

Post by ss108 »

ricardobayes wrote: post #158
frozenwind wrote: post #117

Earlier quoted context omitted.

CBDC is a another puzzle piece of a future dystopia. We're exchanging freedom for the sake of a security façade.

On the other hand, imagine what level of services we could have if it wasn't for the tax dodgers and cash in hand payments. I reckon we could fund universal basic income just from whitening the economy, in any given country.

Do you think the reason why we don't have that is because of a lack of money, and not a lack of political will?

Re: Bank failures come in waves

#173

Post by hanniabu »

vishnugupta wrote: post #95

Continuing the theme of the article the current banking crisis has exposed two conflicting functions of money i.e., store of value and a vehicle of investment both of which are facilitated by banks. Keeping money safe, whether physically or digitally, comes at a cost. Banks absorb this cost because they make money through credit creation, maturity transformation, and interchange fees. They even pass on some of that p…

> CBDC: If you want safe custody of your money.

That's cash. CBDC is if you want no control over your money. At the flip of the switch you can be put on a denial of service list. Except unlike when PayPal does it, you can't just switch providers.

Re: Bank failures come in waves

#174

Post by JeremyNT »

insaneirish wrote: post #7
bubbleRefuge wrote: post #4

Pretty Simple fix. Have the fed backstop all depositors to infinity. Today there are no limits on the number of 250k FDIC insured deposits. Logically the same thing as insuring a single account to infinity.

> Pretty Simple fix. Backstops have a cost, and infinite backstop subsidizes risk taking activity of deposit taking institutions. I'm not even saying that what was done in the wake of SVB and Signature was wrong, per se, but making it formal policy that all deposits in a bank are insured is a fundamental change to the foundation of banking in the US. It may be "right" or it may be "wrong", but the one thing it is not…

> Backstops have a cost, and infinite backstop subsidizes risk taking activity of deposit taking institutions.

To me this makes intuitive sense, but are the only options 250k or infinity?

What's the "magic" behind that $250k number? Is there some reason to expect that this is an optimal number? I feel like maybe it's cargo-culting - it isn't even re-adjusted for inflation is it?

Re: Bank failures come in waves

#175

Post by OhNoNotAnother1 »

pnut wrote: post #137
vishnugupta wrote: post #95

Continuing the theme of the article the current banking crisis has exposed two conflicting functions of money i.e., store of value and a vehicle of investment both of which are facilitated by banks. Keeping money safe, whether physically or digitally, comes at a cost. Banks absorb this cost because they make money through credit creation, maturity transformation, and interchange fees. They even pass on some of that p…

After some internet searching, apparently CBDC means "Central Bank Digital Currency" https://www.investopedia.com/terms/c/central-bank-digital-cu...

[dead]

Re: Bank failures come in waves

#176

Post by shagymoe »

v4dok wrote: post #170
cflynnus wrote: post #120

Earlier quoted context omitted.

Thinking CBDCs are “safe” is extremely naive. They’re a dystopian nightmare. They’re every dictators wet dream. This is why Bitcoin matters. Bitcoin = freedom.

An economy run on Bitcoin is an absolute dystopia. You reluinquish monetary control to a deflationary coin, being in the whim of Bitcoin whales. People who advocate for it, either are whales or they are stupid. Ask south europe how well it worked for them having no power over their monetary policy.

Continuing this charade of "the government and banks are competent at monetary control" is more stupid. Inflation is theft.

Re: Bank failures come in waves

#178

Post by msm_ »

hanniabu wrote: post #173
vishnugupta wrote: post #95

Continuing the theme of the article the current banking crisis has exposed two conflicting functions of money i.e., store of value and a vehicle of investment both of which are facilitated by banks. Keeping money safe, whether physically or digitally, comes at a cost. Banks absorb this cost because they make money through credit creation, maturity transformation, and interchange fees. They even pass on some of that p…

> CBDC: If you want safe custody of your money. That's cash. CBDC is if you want no control over your money. At the flip of the switch you can be put on a denial of service list. Except unlike when PayPal does it, you can't just switch providers.

If you don't trust your government, how is it different than being arrested at the flip of the switch?

Re: Bank failures come in waves

#179

Post by enriquec »

acjohnson55 wrote: post #55
brightball wrote: post #38

Earlier quoted context omitted.

In all circumstances. It’s a nonsense theory that is entirely based on the idea that everybody in the world will accept the value of our currency is maintained while no other country on earth gets this benefit. The sarcasm was warranted.

I'm not an expert on MMT, but I've never heard anyone say that. MMTers say that a government cannot be forced to default on debts denominated in its own currency, but that doesn't mean it can control exchange rates if it chooses to prints money to pay them. MMT encourages a broader range of thinking about what's possible, but those possibilities aren't free of consequences.

You've never heard anyone say the main - and very popular - counter argument? (which is correct IMO)

Seems disingenuous.

Re: Bank failures come in waves

#180

Post by rtkwe »

JeremyNT wrote: post #174
insaneirish wrote: post #7

Earlier quoted context omitted.

> Pretty Simple fix. Backstops have a cost, and infinite backstop subsidizes risk taking activity of deposit taking institutions. I'm not even saying that what was done in the wake of SVB and Signature was wrong, per se, but making it formal policy that all deposits in a bank are insured is a fundamental change to the foundation of banking in the US. It may be "right" or it may be "wrong", but the one thing it is not…

> Backstops have a cost, and infinite backstop subsidizes risk taking activity of deposit taking institutions. To me this makes intuitive sense, but are the only options 250k or infinity? What's the "magic" behind that $250k number? Is there some reason to expect that this is an optimal number? I feel like maybe it's cargo-culting - it isn't even re-adjusted for inflation is it?

At the time it's probably the level that covers most people's deposits. It's pretty rare for a person to have >250k in pure savings deposits so setting it at that level protects most people lessening the pressure causing bank runs. It doesn't work so well for banks like SVB where a few huge businesses make up a majority of their deposits.

250k probably still covers 90+% of people in the US.

Post reply on HN