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Bank failures come in waves

yarn.pranshum.com

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Re: Bank failures come in waves

#191

Post by hkt »

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.

> Bank: If you want to lend your money in return for a yield. And as with any lending, you take the risk of a borrower defaulting.

Ideally, depositors in a CBDC would also get at minimum the central bank rate.

Re: Bank failures come in waves

#192

Post by bannedbybros »

prottog wrote: post #171
ricardobayes wrote: post #158

Earlier quoted context omitted.

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 st…

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Re: Bank failures come in waves

#193

Post by throwaway173738 »

shagymoe wrote: post #188
enumjorge wrote: post #184

Earlier quoted context omitted.

If Bitcoin had a history of stability your point would have more weight, but as it stands I don’t know how people can present it as a viable alternative with a straight face. Banks are having a crisis—-Bitcoin seems to have at least one every year.

If Bitcoin were the default currency, the value would not fluctuate, it would just slowly rise. Responsible savers would be rewarded. Irresponsible risk takers would generally be punished.

You mean the people who bought in early would benefit.

Re: Bank failures come in waves

#194

Post by bannedbybros »

meh8881 wrote: post #146
zizee wrote: post #41

From what I understand, when someone takes out a loan, a bank doesn't lend out depositors' money. Instead money is "created" by the bank (on behalf of the fed), and the bank needs to pay the fed interest. The bank also needs to pay the loan back by an agreed uppn time (which destroys the money). Why can we not have a similar system for deposits? A bank takes a deposit, the fed "destroys" the money, but pays interest…

> From what I understand, when someone takes out a loan, a bank doesn't lend out depositors' money. Instead money is "created" by the bank Nah it’s simpler. You put a dollar in the bank. The bank loans 80 cents to Bob. Bob puts 50 cents of that 80 cents in the bank. The bank loans out some of that. Even without going beyond Bob, the same dollar is now in the bank twice. That’s what people mean by money being created.

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Re: Bank failures come in waves

#195

Post by shagymoe »

throwaway173738 wrote: post #193
shagymoe wrote: post #188

Earlier quoted context omitted.

If Bitcoin were the default currency, the value would not fluctuate, it would just slowly rise. Responsible savers would be rewarded. Irresponsible risk takers would generally be punished.

You mean the people who bought in early would benefit.

Undeniably, in the beginning, yes. Eventually it would be distributed more evenly as those people spend or die. We already have billionaires and the difference is that, with the current system, their money will not become distributed. They fail and then the government prints more to rescue them or they just print it and give it to them directly to "prime the economy". i.e. The Cantillion effect.

The people should control the money and that's only possible with Bitcoin.

Re: Bank failures come in waves

#196

Post by f_devd »

AdamN wrote: post #132
d1sxeyes wrote: post #115

Earlier quoted context omitted.

Most EU banks have always charged a fee for maintaining deposits (at least for private individuals). In the UK, banking is normally free, but on the continent, you normally pay for the account itself and any cards you may hold. Some banks may offer fee waivers for those whose salaries get paid into the account, or if you have a cardless account etc, but it is fairly common practice to charge a small fee for the bank…

In addition to the fee they are leveraging your deposits - and European banks are no less risky for the depositor than the US ones (just look at the 2008 era). Having a 'true bank' that does not leverage your money and has no investment risk would probably be useful to a certain segment of people but the assets would still have counterparty risk and everything else so in the end a very niche market since the best way…

Since 2008 EU banks have gotten more stringent requirements per regulations compared to the US, the degree of additional risk is hard to know for sure without a large scale collapse.

Re: Bank failures come in waves

#197

Post by AlexandrB »

shagymoe wrote: post #176
v4dok wrote: post #170

Earlier quoted context omitted.

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.

If we define "theft" this broadly then employment is theft, taxes are theft, interest on loans is theft, etc. Meanwhile deflation favours early adopters forever, and while you could chide me for "missing the boat" that doesn't really work, morally, for people not yet born.

Re: Bank failures come in waves

#198

Post by AlexandrB »

shagymoe wrote: post #195
throwaway173738 wrote: post #193

Earlier quoted context omitted.

You mean the people who bought in early would benefit.

Undeniably, in the beginning, yes. Eventually it would be distributed more evenly as those people spend or die. We already have billionaires and the difference is that, with the current system, their money will not become distributed. They fail and then the government prints more to rescue them or they just print it and give it to them directly to "prime the economy". i.e. The Cantillion effect. The people should con…

> Undeniably, in the beginning, yes. Eventually it would be distributed more evenly as those people spend or die. We already have billionaires and the difference is that, with the current system, their money will not become distributed.

Why would a bitcoin billionaire's money be distributed more than a traditional billionaire's? At least a traditional billionaire will invest his fortune in assets like stocks and thus help fund some innovative companies to protect his fortune from inflation. The bitcoin billionaire can just hold his fortune in bitcoin forever since it's deflationary.

Every time I see a bitcoin backer talk about finance, the things said fly in the face of Econ 101 and basic common sense. I guess I "just don't get it".

Re: Bank failures come in waves

#199

Post by HDThoreaun »

sgsag33 wrote: post #90

Why do we even need banks? If they make money by lending money that mostly belong the people (state/feds) anyways, I guess we all would be better if banking was just a state monopol. I guess I'm just missing some points here so maybe someone can help and explain me why this is a bad idea?!

The government doesn't want to be responsible for making all the loans banks do. It's not easy to do and if the government makes bad ones and loses money people will complain.

Re: Bank failures come in waves

#200

Post by guessbest »

jpmattia wrote: post #190
mejutoco wrote: post #154

Earlier quoted context omitted.

Exactly. And regarding > only a central bank can fully guarantee a deposit The buck stops at the government, as we are seeing with changing laws to allow Credit Suisse acquisition or by Biden and European representatives statements abou "doing whatever is needed" or similar.

> The buck stops at the government, as we are seeing with changing laws... Not to mention the majority party in the US House is threatening default.

The party in the House always threatens to not raise the debt ceiling if the POTUS is of a different party. It has been like this for decades.
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