261–270 of 496 posts
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> That's why bank runs can quickly lead to economic disaster. That is true, but arguably not a consequence of money being digital, but rather of fractional reserve banking. Physical vs. digital accounting is largely orthogonal to full/fractional reserve banking.
No that's not how it works. Bank runs are possible even with full reserve banking. If banks make any loans at all then obviously they don't hold enough cash to redeem all depositors. Regardless of reserve ratios, the only way to reliably prevent bank runs is with a central bank that provides liquidity upon request.
These are contradictory. The banks with full reserve banking can't make loans from easily withdrawable deposits. They can do that only with term deposits that can't be withdrawn for a specific period
While, in principle, I support sanctions against Russia for their actions, I can't help but think they are using Ukraine as part of a larger economic game. Basically, they are forcing countries to take sides to some degree, and any country that wants to continue trading with Russia will have to adopt an alternative financial system/network, one that is not Dollar-centric like most of the world currently uses. I think…
The potential for bad consequences for Russia in the months ahead depends to a large degree on how China reacts.
CEO and co-founder of Routefusion here, a cross-border bank to bank payment API. We use the SWIFT network regularly. I can 100% confirm that all money in the world is just literally numbers, and it is balanced by the different federal reserve systems around the world to ensure no one can "create" money without notifying everyone. I guess if I was super cool I would do an AMA because this is the only thread that is re…
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That's my point. The ruling class is free to exploit, manipulate, and abuse the working class, up until they're really needed for something important, like bailing out banks, or pressuring another country's government. I guarantee we all share more in common with the working class from different cultures than we do with our own ruling class.
I would submit that most of the commenters in this forum have more to do with the ruling class than with the working class. (The median personal income in the US is about $36,000/year. ( https://fred.stlouisfed.org/series/MEPAINUSA672N ))
If we "cut" off SWIFT it would hurt Europe and the States just as much as it would Russia because this is how all money moves. Think paying for natural gas, oil, commodities, etc etc.
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I'm sorry that this is the case, but, I'm pretty sure that's the idea. At this point, your government is not acting with anyone's best interest in mind, including that of its citizens. It's up to the rest of the world to make it clear what the consequences are for that, in the hopes that if your leaders don't change their mind on their own, you'll do it for them.
That's the propaganda used to justify sanctions, but historically, no government has been overthrown due to sanctions. The sanctioned country can just use the sanction as an example of hegemony, which isn't exactly inaccurate. What sanctions do accomplish is that they give you an avenue for more aggressive intervention. An example of this is America's sanctions against Imperial Japan before WWII.
I often wonder how money is stored. It can't be just a number on a computer in a bank, right? Otherwise some Russian bank could just increase that number to whatever they like. And say "Look, we own 100 Trillion USD. Now let's go shopping.". So I guess USD needs to be recognized by the US somehow? Could the US simply "void" all USD that are owned by Russia?
A bank could easily create fake money into its own accounts, but it would have trouble transferring that money over to other banks. I wrote extensively about this topic here: https://www.attejuvonen.fi/money-out-of-thin-air/
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That's the propaganda used to justify sanctions, but historically, no government has been overthrown due to sanctions. The sanctioned country can just use the sanction as an example of hegemony, which isn't exactly inaccurate. What sanctions do accomplish is that they give you an avenue for more aggressive intervention. An example of this is America's sanctions against Imperial Japan before WWII.
And the alternatives to sanctions are?