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

The Future of the Monetary System [pdf]

credit-suisse.com

Post reply on HN
Print view View original

51–60 of 67 posts

Re: The Future of the Monetary System [pdf]

#51

Post by crq-yml »

smallmancontrov wrote: post #38
cupcakecommons wrote: post #28

Earlier quoted context omitted.

What's the vector you think a super power would use to kill it?

1. Just ban it. Kick it off the app stores, prevent financial services companies from dealing with it, and maybe make an example of a renegade bitcoin ATM company to stop nerds like us from getting ideas. 2. Attack the blockchain itself. It can stand bozo-scale hacks, but NSA scale? They control the internet backbone. They can just drop the packets. They have hardware backdoors all over the place and have been known…

What's actually happened in practice: A huge number of politicians became entangled in SBF's operation, and the direct attacks made to date could be construed as attempts to get in at lower prices or control local onramps.

Government officials that seek crypto bans end up with conflicts of interest. This is a recurring theme across the various countries that have announced such things. They don't deploy the secret taxpayer dollars to combat it, because they quickly get an angry phone call from a so-and-so on the inside.

The superpower system works within an imaginary of imperial expansion, where everyone's motives converge on putting more assets on their balance sheet even if it means lying about how the books got that way. During the rise of the modern nations that meant supporting a stronger state and a bigger bureaucracy. If we define the quality of the accounting at scale as the goal, then blockchains are just a next progression in technology. That's still compatible with governance and power-seeking, it just changes the landscape of power in a way that shifts around the motives. The number of middlemen involved isn't zero, it doesn't stop corrupt dealing, but it has some substance, particularly in the largest scale of international finance, where you really can't "look to an authority".

Re: The Future of the Monetary System [pdf]

#52

Post by nradov »

zer00eyz wrote: post #12
user90131313 wrote: post #6

Earlier quoted context omitted.

Until a gold has a military and economy behind it, it’s a toy. That is what a gold as a rock represents: power and trust.

Gold is not a currency, it's a commodity. It has been used for 1000's of years for adornment, because of its mailability and luster. Recently it also has application in industry at an unprecedented scale. Bitcoin is a token that represents an amount of wasted electricity. It has no value other than the intrinsic ones people place on it, like a currency. We can decide that bitcoin is worthless tomorrow and it would be…

The US military is mostly irrelevant for maintaining the value of the dollar. If you treat the dollar as worthless or use other currencies they won't bomb you.

It's really more civilian law enforcement that maintains the value of the dollar and blocks alternative currencies from widespread adoption. If you incur a tax liability to the US government then you have to settle the debt using dollars: they won't take gold or Bitcoin or cattle. And if you fail to pay then eventually they'll use violence (or the threat thereof) to seize your assets.

Re: The Future of the Monetary System [pdf]

#53

Post by jpc0 »

carlosjobim wrote: post #37
sambeau wrote: post #25

Earlier quoted context omitted.

Central banks do not deal in gold and have not for decades, some for nigh-on a century.

From 2023: "China has spearheaded record levels of central bank purchases of gold globally in the first nine months of the year, as countries seek to hedge against inflation and reduce their reliance on the dollar. Central banks have bought 800 tonnes in the first nine months of the year, up 14 per cent year-on-year, according to a report by the World Gold Council, an industry group." https://www.ft.com/content/abc39…

> hedge against inflation and reduce their reliance on the dollar

If I am dealing in X I don't buy more X incase X's value decreases

The parent comment is correct, gold hasn't been a standard for a long time to base the value of currency on. It is simply a commodity with a relatively stable value up until now.

The only thing currency value is based on is how much people are willing to pay for it and as correlation to that how many people are willing to accept it as payment.

I invite you to walk into your local grocery store and attempt to pay in anything other than your local currency, you will fins out just how worthless that is as a currency.

So for me, a non-US citizen who isn't doing any dealing with people willing to accept dollars, dollars are as much a currency as pet rocks are. They can be converted into currency but they are not currency. Gold holds the same property although I would much rather hold gold than US dollars and that is where your quote on central banks come in.

I'm much more likely to get the same amouny of currency from gold than from US dollars on the future should I choose to sell it.

Re: The Future of the Monetary System [pdf]

#54

Post by randomname93857 »

pants2 wrote: post #40
user90131313 wrote: post #2

[flagged]

Whatever your thoughts on crypto, it seems short-sighted not to include some discussion of it in a "Future of the Monetary System" paper. You have countries like El Salvador moving to a Bitcoin standard, BlackRock's CEO saying "tokenization will be the next evolution in markets," Norway testing Ethereum-based CBDCs, etc.

>> countries like El Salvador moving to a Bitcoin standard

Could you please list the countries that are moving to bitcoin, as you say?

Re: The Future of the Monetary System [pdf]

#55

Post by someplaceguy »

imtringued wrote: post #47
zer00eyz wrote: post #26

Earlier quoted context omitted.

Gold can be made into currency, aka a coin. As can silver or bronze or zinc. https://en.wikipedia.org/wiki/Debasement as an example of what happens when gold ends up a currency.

People don't seem to understand that money is not much different to a deed that declares your property rights over a house or a plot of land. There is no difference. Whether it is paper or a metal coin, there is no difference since the money is like a legal contract recording how much abstract value you have given to "society" and how much access you have to resources. It is more like a key that opens doors. The prob…

> money is like a legal contract recording how much abstract value you have given to "society" and how much access you have to resources

Finally, someone who understands money. As opposed to the typical "but my military!", as if no country with a strong military had ever had its currency fail...

I would only emphasize the importance of the scarcity aspect of money, which seems to be a (purposely) forgotten lesson nowadays. It reminds me of the historical importance of the Spanish Price Revolution, which with its 1.2% yearly inflation, nowadays it would be considered laughable.

Re: The Future of the Monetary System [pdf]

#56

Post by nimbius »

sedev wrote: post #32

From the Conclusions section: > The main question we tried to answer is whether a significant shift away from the US dollar as the dominant “hegemonic” currency is likely to occur in the foreseeable future, and in which direction the monetary system might develop. The key conclusion was that the fate of the US dollar as the currency hegemon depends on a number of factors, with the degree to which US policy makers wou…

Economic sanctions imposed by Switzerland on Russian individuals and businesses had the most significant impact on the demise of the bank. Credit Suisse held about $33 billion for Russian clients, 50% more than UBS.

What does any of this have to do with "intellectual rigor?" sources are cited in the paper and the authors are among leading global economists. death by association is a cheap way to avoid the real intellectual rigor of refuting legitimate points in the publication.

Political unrest in the US and US over-reliance on sanctions are two of the most damning threats to monetary hegemony in the 21st century. routine defaults on an arbitrary ceiling of debt have precipitously reduced US credit ratings over the past decade. a federal insurrection is also something you might not wish to see in a country that boasts its safe currency.

https://en.wikipedia.org/wiki/United_States_sanctions

the us sanctions about 26 countries and nearly 2300 people. so https://www.cnas.org/publications/reports/sanctions-by-the-n...

Re: The Future of the Monetary System [pdf]

#57

Post by pants2 »

randomname93857 wrote: post #54
pants2 wrote: post #40

Earlier quoted context omitted.

Whatever your thoughts on crypto, it seems short-sighted not to include some discussion of it in a "Future of the Monetary System" paper. You have countries like El Salvador moving to a Bitcoin standard, BlackRock's CEO saying "tokenization will be the next evolution in markets," Norway testing Ethereum-based CBDCs, etc.

>> countries like El Salvador moving to a Bitcoin standard Could you please list the countries that are moving to bitcoin, as you say?

Central African Republic, Fiji and Tonga are currently moving to accept Bitcoin as legal tender[1].

1. https://en.wikipedia.org/wiki/Legality_of_cryptocurrency_by_...

Re: The Future of the Monetary System [pdf]

#58

Post by RandomLensman »

nimbius wrote: post #56
sedev wrote: post #32

From the Conclusions section: > The main question we tried to answer is whether a significant shift away from the US dollar as the dominant “hegemonic” currency is likely to occur in the foreseeable future, and in which direction the monetary system might develop. The key conclusion was that the fate of the US dollar as the currency hegemon depends on a number of factors, with the degree to which US policy makers wou…

Economic sanctions imposed by Switzerland on Russian individuals and businesses had the most significant impact on the demise of the bank. Credit Suisse held about $33 billion for Russian clients, 50% more than UBS. What does any of this have to do with "intellectual rigor?" sources are cited in the paper and the authors are among leading global economists. death by association is a cheap way to avoid the real intell…

Why would the $33B from Russian clients be crucial? Seems far too small compared to the outflows that were happening (q4 22 plus q1 23 more than $150B, I think) for it to be that critical.

Re: The Future of the Monetary System [pdf]

#59

Post by zer00eyz »

someplaceguy wrote: post #55
imtringued wrote: post #47

Earlier quoted context omitted.

People don't seem to understand that money is not much different to a deed that declares your property rights over a house or a plot of land. There is no difference. Whether it is paper or a metal coin, there is no difference since the money is like a legal contract recording how much abstract value you have given to "society" and how much access you have to resources. It is more like a key that opens doors. The prob…

> money is like a legal contract recording how much abstract value you have given to "society" and how much access you have to resources Finally, someone who understands money. As opposed to the typical "but my military!", as if no country with a strong military had ever had its currency fail... I would only emphasize the importance of the scarcity aspect of money, which seems to be a (purposely) forgotten lesson now…

>>> as if no country with a strong military had ever had its currency fail...

Has there been a widely accepted currency (true currency) that hasn't had military might behind it? Has there been a dramatic military failure that hasn't been followed by currency decline?

Military, state and currency are all interlinked on a pretty deep level.

Re: The Future of the Monetary System [pdf]

#60

Post by bankerasexample »

For those who are claiming they should dismiss this paper because it was written by Credit Suisse (who have collapsed), I will weigh in as someone who works in a bank. The people who wrote this would have had absolutely nothing to do with the banks risk management or corporate decision making, and so exist more or less orthogonally from the people who caused its collapse. This is doubly true given European regulation which requires segregation of business lines within the bank: you even see the report is produced by ‘credit suisse research institute’ which will produce+sell research separately from the risk taking parts of the business. Not saying it’s correct/not prone to groupthink but the people writing will be some of the top economists/research analysts out there.
Post reply on HN