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Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

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Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#61

Post by [deleted] »

tyre wrote: post #54
tlb wrote: post #35

Earlier quoted context omitted.

Every bank and credit card is also an unsanctioned mint. It works fine. The actual minting of money has not been a major factor in managing the money supply in a long time. It's all done by setting interest rates.

> The actual minting of money has not been a major factor in managing the money supply in a long time. Very much not true. Quantitative easing, the process of minting money to inject liquidity into the economy, was a core tenet of the Obama administration’s* response to the Great Recession. Literally trillions of dollars created to purchase bonds and mortgage backed securities to prop up the economy. Edit: It was dur…

[deleted]

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#62

Post by WheelsAtLarge »

Interesting that Powell does not address the power that FB gets by having its own currency. Having billions of users gives it the power to create its own economy and by extension its own government. If you give it enough time FB will be able to set its own monetary policy and rules. It won't happen today or tomorrow but give it time and it will.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#63

Post by wonder_er »

politician wrote: post #12
traek wrote: post #8

Earlier quoted context omitted.

This is how every bank works.

Fractional reserve banking usually requires some non-zero percentage of deposits to be withheld.

The requirement is between zero percent and ten percent. [0]

Basically, for assets less than $124 million, the reserve requirement is 3%.

For more than $124 million, the requirement is 10%.

In other words, for every $100 on deposit at a bank, it can create "out of thin air" $90 and loan it out.

If someone then gets that $90 and puts it in a checking account at the bank, the bank can create and loan out $81, then $72, than $64, $57.6, $51 etc.

[0] https://www.federalreserve.gov/monetarypolicy/reservereq.htm

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#64

Post by Wowfunhappy »

benj111 wrote: post #43
buboard wrote: post #31

Earlier quoted context omitted.

E-gold was a scam IIRC, while libra's assets : > the assets in the Libra Reserve will be held by a geographically distributed network of custodians with investment-grade credit rating to provide both security and decentralization of the assets. And BTC is not backed by anything, it has intrinsic value now so it's wrong to call it a scam.

What is the intrinsic value of btc? I can't eat it, use it to heat my house. It has value, most of it isn't intrinsic though.

Can you do any of those things with gold?

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#65

Post by conanbatt »

DiseasedBadger wrote: post #9
conanbatt wrote: post #2

After 10 years of the crypto-crazies of bitcoin denouncing the power of central banks, a private company announces to do a version of a crypto-currency and is under fire from a central bank. Clearly they got something right.

Nothing about Libra denounces the power of central banks. Facebook just becomes an unregulated central bank.

They can't be a central bank because they are not a government.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#66

Post by conanbatt »

wil421 wrote: post #3
conanbatt wrote: post #2

After 10 years of the crypto-crazies of bitcoin denouncing the power of central banks, a private company announces to do a version of a crypto-currency and is under fire from a central bank. Clearly they got something right.

If we knew which government, I mean person, created bitcoin would the same apply? Or would the Feds be all over Satoshi Nakamoto? FB has been the subject of several congressional and parliamentary hearings around the globe recently. Why would they not question Libra?

I think what is happening to Libra right now is a good example of why Bitcoin is so censorship-resistant minded.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#67

Post by drexlspivey »

TheRealPomax wrote: post #14
traek wrote: post #8

Earlier quoted context omitted.

This is how every bank works.

Yes, and banks are bound by incredibly tight laws, including laws around not being allowed to recirculate all the money you get as part of an exchange operation. If all the Libra association members are willing to be bound by the same laws, then cool: but do you trust Vodafone, or Facebook, or Andreessen Horowitz, to not try to bend the rules so they can make more money?

Banks follow fractional reserve so they have to keep 10-20% of the deposits in cash. Libra and most stablecoins keep 100% reserves so it's even stricter. Libra claims that every coin is backed by fiat currency so investing the deposits is not how they plan to make money off of this.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#68

Post by conanbatt »

asveikau wrote: post #18
conanbatt wrote: post #2

After 10 years of the crypto-crazies of bitcoin denouncing the power of central banks, a private company announces to do a version of a crypto-currency and is under fire from a central bank. Clearly they got something right.

Alternatively, a private entity which is typically described as under-regulated in its existing businesses thinks it can pivot into central banking without scrutiny.

Having a currency is not the definition of a central bank. Central banks are public institutions with responsibilities within a government. Casinos that issue their own chips are not central banks.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#69

Post by mushufasa »

tyre wrote: post #54
tlb wrote: post #35

Earlier quoted context omitted.

Every bank and credit card is also an unsanctioned mint. It works fine. The actual minting of money has not been a major factor in managing the money supply in a long time. It's all done by setting interest rates.

> The actual minting of money has not been a major factor in managing the money supply in a long time. Very much not true. Quantitative easing, the process of minting money to inject liquidity into the economy, was a core tenet of the Obama administration’s* response to the Great Recession. Literally trillions of dollars created to purchase bonds and mortgage backed securities to prop up the economy. Edit: It was dur…

>> Very much not true

?? The parent comment is correct that about the 'actual minting of money' not being a huge factor, in the sense of printing dollars and coins. Quantitative easing increases the money supply, but not via physically printing money.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#70

Post by H8crilA »

tyre wrote: post #54
tlb wrote: post #35

Earlier quoted context omitted.

Every bank and credit card is also an unsanctioned mint. It works fine. The actual minting of money has not been a major factor in managing the money supply in a long time. It's all done by setting interest rates.

> The actual minting of money has not been a major factor in managing the money supply in a long time. Very much not true. Quantitative easing, the process of minting money to inject liquidity into the economy, was a core tenet of the Obama administration’s* response to the Great Recession. Literally trillions of dollars created to purchase bonds and mortgage backed securities to prop up the economy. Edit: It was dur…

That's because interest rates were already at zero. Look over to what BOJ did - they straight up bought equity ETFs as a part of their qe, even more hardcore. Still, not much inflation!
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