Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin • Hacker News Board

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#261

Post by md_ » Mon, Dec 13, 2021, 4:26 PM UTC

lowkey wrote: post #256

md_ wrote: post #246

Earlier quoted context omitted.

OK. And what if the borrower defaults? Per https://docs.anchorprotocol.com/protocol/money-market#borrow... , it seems like there'd be zero risk as long as the LTV is >= 1.0, but that sort of defeats the point of loans. ;)

> it seems like there'd be zero risk as long as the LTV is >= 1.0, but that sort of defeats the point of loans. ;) Help me see what I am missing, what is the point of loans that is defeated by requiring an LTV >= 1.0? To my knowledge all collateral backed lending is based on the principal that the collateral value must always be greater than the value of the loan in order to remain solvent. Since crypto is a volatile…

Of course, even collateralized loans to buy real estate are not, despite what you said earlier, risk-free--see 2008 (and google the term "CDO", in case you've never heard of it) for a rather dramatic example of this.

More to the earlier point, though, this is really not how most lending works, so the idea that this somehow means that "absent central bankers, we'd all make 2% APY risk-free on bank deposits" is just silly. The global equity market is $50T, the global corporate bond market something like $100T. Total cash-equivalents (M2) in the US is $21T.

Even if "pledging shitcoins as collateral for speculating on coinbase" were zero-risk--which of course it isn't--the market for such loans is, unfortunately, too small for all of us to retire risk-free.

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#262

Post by lowkey » Mon, Dec 13, 2021, 9:04 PM UTC

md_ wrote: post #260

lowkey wrote: post #259

Earlier quoted context omitted.

It’s more like I will lend you $1 if you post >$1 in collateral. In crypto, this is often in the form of a speculative token that is growing at potentially 200+% per year. The borrower is posting their collateral as security for the loan but they continue to own the collateral and enjoy the upside of price appreciation as long as the loan is in good standing. As the sister comment pointed out, it is currently a $50 B…

I'm aware of this. But again, your original claim was “If it were not for central bankers printing money into existence, a person could work their life, save a portion for retirement in a bank account or other fixed income product, while enjoying a positive return on their investment, without taking on market risk of loss of funds.” I've yet to understand where you got that idea from, or what it has to do with all of…

> I've yet to understand where you got that idea from, or what it has to do with all of your nonsensical followup comments.

Which of my comments do you find non-sensical, specifically?

> original claim was “If it were not for central bankers printing money into existence, a person could work their life, save a portion for retirement in a bank account or other fixed income product, while enjoying a positive return on their investment, without taking on market risk of loss of funds.”

Let me lay out my logic:

- If not for central bankers, artificially printing money and putting it in circulation, there would be no inflation. No printing by central bankers = No dilution of the purchasing power of everyone's money -> therefore no inflation.

- In a no inflation environment, any nominal gains are real-gains because there is no inflation to worry about

- In a no inflation environment, for a banker to attract deposits from savers, they would have to offer savers a nominal rate of savings in order to attract those deposits

- In a no inflation environment, any nominal rate paid on savings is a real return, since there is no inflation

- In an FDIC insured savings account savings are insured, therefore not risk

- Unfortunately in our current environment where the Fed is printing money at 25-40% increases in M2 y/y, and CPI reaching 6.8% at last reading, and bank savings accounts paying 0.1%, it is hard to appreciate that a bank account could ever pay a real rate on savings, net of inflation. However, in a world without central bank money printers this is exactly what we would enjoy.

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#263

Post by haskellandchill » Tue, Dec 14, 2021, 9:37 PM UTC

lowkey wrote: post #248

UncleMeat wrote: post #155

Earlier quoted context omitted.

Inflation is not caused directly and only by printing. But imagine it was. We'd see inflation apply evenly everywhere. So wages would rise too. Inflation would not eat into your earnings in any compounding fashion.

The reason inflation isn’t applied equally everywhere is called the Cantillon Effect. Here are the details https://azizonomics.com/2012/08/07/the-cantillon-effect/ For a given level of money velocity, what other factors cause inflation - other than money printing? Clearly money printing is the most obvious cause of artificial manipulation of the money supply and in my understanding the primary cause of inflation. Wha…

> For a given level of money velocity, what other factors cause inflation - other than money printing?

Many economists consider that view a myth by the way: https://blogs.cfainstitute.org/investor/2021/04/19/myth-bust...

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#264

Post by denpieter6 » Wed, Dec 15, 2021, 9:46 AM UTC

When my herpes started interfering with my daily life. And my lips always bother me every damn day. I remember going to the hospital when I was around 25 years old cuz my whole lips were burning like hell. And a nurse came to the waiting lobby and said sorry there are no doctors here. So I had to go back home. My lips were burning like hell and I felt so uncomfortable that night so I turned to the internet where I found a Dr Ortiz the Nauturopathic. I don’t know what would have healed me from this virus if not for the product. I took a comprehensive STD blood test last week again and everything came out negative ,thanks to Dr Ortiz https://www.facebook.com/DrOrtizthenaturopathic

Re: Bitcoin Failed in El Salvador. The President Says the Answer Is More Bitcoin

#265

Post by lowkey » Wed, Dec 15, 2021, 4:39 PM UTC

haskellandchill wrote: post #263

lowkey wrote: post #248

Earlier quoted context omitted.

The reason inflation isn’t applied equally everywhere is called the Cantillon Effect. Here are the details https://azizonomics.com/2012/08/07/the-cantillon-effect/ For a given level of money velocity, what other factors cause inflation - other than money printing? Clearly money printing is the most obvious cause of artificial manipulation of the money supply and in my understanding the primary cause of inflation. Wha…

> For a given level of money velocity, what other factors cause inflation - other than money printing? Many economists consider that view a myth by the way: https://blogs.cfainstitute.org/investor/2021/04/19/myth-bust...

These are the same economists who predicted there would:

- be no inflation, then

- inflation would be mild, then

- inflation would be transitory, then

- inflation isn't really a problem

Still, I'm waiting for your response on what causes inflation, other than money printing. If we look at correlation, money printing appears to be related to inflation. What am I missing?