181–190 of 190 posts
Will this basically mean the federal government would have a record of all our transactions?
They already do, they just have to ask Visa/AmEx/Mastercard nicely.
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History hasn't been kind to either of Jefferson's opinions in that sentence. The US did abolish the central bank for a while and nothing good happened as a result. Also, military coups are a problem in many countries, but not the US.
Nothing good has happened after central banking was established either. It's been one financial crisis after another. Also fun fact - back when the US had private currencies, people WILLINGLY preferred to use them despite a gov currency existing. It is only after the government passed high taxes on these currencies(ie having to pay tax for each transaction to exchange them) that they went out of favor. If they were r…
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I dont think the term sound is used by many to imply that the fed is simply following its mandate. if so then the fed has been doing "unsound" monetary policy for most of the last 10 years. Sound is generally used specifically in a connotation of not debasing the currency. Also gotta strongly disagree that the concept of helicopter money has no connotation of amount. to each their own I guess.
> if so then the fed has been doing "unsound" monetary policy for most of the last 10 years. Fed has to work within the tools it has. Especially when government is stuck and fiscal policy is almost never sound or enough. With the tools it has, it has done it right. The problem is that there is zero lower bound.
As you'd be right to point out, almost nobody defines monetary policy in these terms, but it's your definition. The fed balance sheet is 1/4 the size of the total economy, the over night rate is so low that OMO only works in one direction, it takes more than 1.5 Trillion dollars of reverse repo a night to keep banks in operation, and the Fed is so backed into a corner that they purchased bonds and didn't raise rates (expansionary) in January while inflation was at 7%.
Meanwhile former Fed board members, former treasury secretaries, and basically every macro bank analyst in existence is commenting that the Fed has made it's biggest policy error of all time.
So sure, keep arguing that they are doing "sound policy" whatever that means. Most people aren't going to buy it.
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SEPA is often heralded as being that convenient but this isn't complete information. Basically there is a parallel instant SEPA that is only partially implemented in between certain banks in some countries. Cross border SEPA between two SEPA system countries is much more likely to be just as slow as the US ACH system. So the only way people could possibly believe this works is if they and their friends use the same b…
This is not true at all. SEPA payments are cleared five times a day on every business day. Payment Services Directive establishes that money must be credited to a recipient's account at the latest by the end of the next business day. On top of that, about a quarter of all banks already support Instant SEPA, which clears immediately 24/7/365.
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>Such a military force would be facing a very well armed citizen-led guerilla response. Unless enough citizens were on the side of the coup. I don't know why no one ever seems to acknowledge that as a possibility, especially after Jan. 6. Gun owners are just as driven by politics and ideology as anyone else. Plus just because you have a gun in a safe and maybe sometimes shoot watermelons in the backyard with it doesn…
It would be interesting to see how these "3 percenters" would do living in the mountains and eating bush meat for five years.
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Banks in the UK pay out a maximum of 1% interest on even the best savings accounts (i. e. the return doesn't even keep pace with average person's PoV inflation). I am skeptical of this explanation for why we should let the banks hold our money. Or indeed remain alive as anything but a source of borrowing.
> Banks in the UK pay out a maximum of 1% interest on even the best savings accounts (i. e. the return doesn't even keep pace with average person's PoV inflation). Interest paid on deposits is a free market (generally speaking); if that rate isn't worthwhile to people, they will start leaving and the bank will raise its rates. > I am skeptical of this explanation for why we should let the banks hold our money. You ar…
I am fairly certain this isn't true, at least not in the US/UK.
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> Banks in the UK pay out a maximum of 1% interest on even the best savings accounts (i. e. the return doesn't even keep pace with average person's PoV inflation). Interest paid on deposits is a free market (generally speaking); if that rate isn't worthwhile to people, they will start leaving and the bank will raise its rates. > I am skeptical of this explanation for why we should let the banks hold our money. You ar…
> They can't lend money without deposits. The deposits are the money they lend. I am fairly certain this isn't true, at least not in the US/UK.
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What is that based on?
It's been true for a very long time, and unless we see enormous amounts of growth, it will have to stay true. If you look at Fed plans to raise interest rates, you'll see that even in the highest estimates they're looking at fractions of a percent. Meanwhile, we're having months with 8% annualized inflation.
Until this year, we've hardly had any inflation since before 2008, at least. Deflation was a bigger concern. The margin between inflation and interest rates was very small.
I see what you are asserting, but again, what is all this based on?
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Banks in the UK pay out a maximum of 1% interest on even the best savings accounts (i. e. the return doesn't even keep pace with average person's PoV inflation). I am skeptical of this explanation for why we should let the banks hold our money. Or indeed remain alive as anything but a source of borrowing.
> Banks in the UK pay out a maximum of 1% interest on even the best savings accounts (i. e. the return doesn't even keep pace with average person's PoV inflation). Interest paid on deposits is a free market (generally speaking); if that rate isn't worthwhile to people, they will start leaving and the bank will raise its rates. > I am skeptical of this explanation for why we should let the banks hold our money. You ar…
No, that is evidently not happening. When I said "banks", I meant "literally all banks" (minus tiny regional credit unions or the occasional fluke that might give you up to 1.2% - wow, that is so much money, I could retire on it). People generally don't move banks either. They tend to stay with whomever they started banking first.
> You aren't 'letting' them and it's not a collective decision. You personally choose to give them your money. Put it elsewhere if you like.
My main alternative to holding cash in a bank is cryptocurrencies (which are accepted ~nowhere), or holding my money as cash. Handling cash has been in decline even before the pandemic, and nowadays I very rarely see people pay cash. Assuming that cash remains on the current trajectory, banks will become the only mainstream option.
> They can't lend money without deposits. The deposits are the money they lend.
They have enough money saved up in their coffers for that. I also can't imagine that most loans for a higher value than a credit card account would be entirely unsecured. This is especially true for house purchases - it's generally impossible to buy the house you want without a mortgage, and the house is what you lose I'd you don't pay them back.
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Fwiw in hindsight it appears that structural regulation like Glass-Steagal is what stabilizes the banking system. Separating banking, investment banking, and insurance into separate legal entities and preventing the banks from consolidating into mega-banks prevented another a Great Depression for ~70years. Then roughly 8yrs after we repealed all that, we unsurprisingly had another Great Depression level financial cri…
> Fwiw in hindsight it appears that structural regulation like Glass-Steagal is what stabilizes the banking system. This is not at all clear. > Separating banking, investment banking, and insurance into separate legal entities and preventing the banks from consolidating into mega-banks prevented another a Great Depression for ~70years. Then roughly 8yrs after we repealed all that, we unsurprisingly had another Great…
You’re conflating a bunch of unrelated things. The single most economically devastating type of event in a banking system is a credit crisis or credit collapse [1]. That’s what both the Great Depression and the Global Financial Crisis were.
All these other things you reference pale by comparison in the level of harm they can inflict on society. Are they bad? Sure. Are they remotely in the same league of harm as the GD or GFC? No.
The point of structural banking system regulation is to prevent this worst case scenario, not to solve every single problem with the banking system. If you can prevent credit collapses from occurring then you’ve significantly improved the stability of the banking system.