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(Guardian)   England signals crypto dip. Or a bubble and a squeak. Maybe just a fool. Subby used a list of traditional England dishes   (theguardian.com) divider line
    More: Asinine, Money, high-street banks, Money supply, rise of digital currencies, Fractional-reserve banking, Central bank, central bank, Bank of England  
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318 clicks; posted to Business » on 07 Jun 2021 at 11:12 PM (7 days ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



18 Comments     (+0 »)
View Voting Results: Smartest and Funniest
 
2021-06-07 9:11:26 PM  
cdn.influenster.comView Full Size
 
2021-06-07 10:15:21 PM  
Safer to stick with bangers and cash.
 
2021-06-07 10:42:13 PM  
Subby is a meatball made from minced off-cuts and offal, especially pork (traditionally pig's heart, liver, and fatty belly meat or bacon) together with herbs for flavouring and sometimes added bread crumbs.
 
2021-06-07 10:47:48 PM  
Nervous Central Bankers give me an erection so hard I have to go to the E.R.

Fark user imageView Full Size
 
2021-06-07 11:25:16 PM  
It's all beer and skittles.
 
2021-06-07 11:27:01 PM  
Maybe if banks would offer more than .05% interest on savings people wouldn't have to look for alternatives. Not that crypto is in any way safe, but at least it has a chance to return at a rate that beats inflation.
 
2021-06-07 11:30:48 PM  

Palined Parenthood: [cdn.influenster.com image 600x600]


Maybe mucky dripping or rumbledethump.
 
2021-06-07 11:52:20 PM  
I read a lot of economics and legal texts (most books I read have chapters on this stuff), but I ahven't seen this distcintion before:

Most UK households and businesses already use central bank money in the form of cash, and private money in the form of bank deposits.

Bank deposits are not company scrip. I think the dollars in cash and the dollars in digital bank records were the same dollars backed by the same government. So... I guess I'm confused. I think the article is just plain wrong, but that's crazy talk.
 
2021-06-08 12:02:51 AM  
Crypto market is down 10% today.
 
2021-06-08 1:51:30 AM  

Bennie Crabtree: I read a lot of economics and legal texts (most books I read have chapters on this stuff), but I ahven't seen this distcintion before:

Most UK households and businesses already use central bank money in the form of cash, and private money in the form of bank deposits.

Bank deposits are not company scrip. I think the dollars in cash and the dollars in digital bank records were the same dollars backed by the same government. So... I guess I'm confused. I think the article is just plain wrong, but that's crazy talk.


Different money supplies? Sounds like our equivalent of M2, minus M1. Kinda weird way to name them, but I guess it makes sense if you consider it as something that came from fractional reserve lending, which comes from private institutions as opposed to a central bank.

mcreadyblue: Crypto market is down 10% today.


Gonna be interesting to see how BTC/DOGE shakes out. BTC hit resistance at it's EMA 200 on the quarterly chart, and DOGE didn't even come close. On the monthly DOGE just crossed that as of this post, BTC crossed the same a couple days ago. At that point, DOGE became oversold; BTC just became oversold last evening.

Someone on reddit made the observation that in the past couple weeks when crypto has bad days meme stocks go up. Thanks to Silbert and his stupid gambit shorting DOGE the gears are finally moving on Cohen's plans for Mars' first Gamestop location. 😂
 
2021-06-08 2:18:32 AM  

Stibium: Bennie Crabtree: I read a lot of economics and legal texts (most books I read have chapters on this stuff), but I ahven't seen this distcintion before:

Most UK households and businesses already use central bank money in the form of cash, and private money in the form of bank deposits.

Bank deposits are not company scrip. I think the dollars in cash and the dollars in digital bank records were the same dollars backed by the same government. So... I guess I'm confused. I think the article is just plain wrong, but that's crazy talk.


Different money supplies? Sounds like our equivalent of M2, minus M1. Kinda weird way to name them, but I guess it makes sense if you consider it as something that came from fractional reserve lending, which comes from private institutions as opposed to a central bank.


[google google goolge] Okay. I always thought taht the money leant by commercial banks (and merchant banks) had to be, eventually, backed by governments. When the loans are paid off, the value was created by labour. When the loan is defaulted, the value has to be printed by the mint because labour isn't creating the value. The story I've bene using explains why business ha to be supported by government, mprevented from failing (Too Big To Fail), why defaulting on loans to commercial banks weakened "the economy," and could destabilize currency value, and even destabilize a government.

If fractional reserve lending really is money created by the commercial lender, and not an estimate of value created by the debtors' future labour (backed by government promise of emergency bailout - the prmise of creating whatever value labour can't produce), then there would be no consequences for loan failures and no conequences for govenrments refusing to back currency. It seems to good to be true. Which is my 20 minutes of thinking about it hot-take. Keynes' book is in another room and I'm too lazy to go re-read it tonight. (It's been a few years).
 
2021-06-08 2:57:26 AM  

Bennie Crabtree: Stibium: Bennie Crabtree: I read a lot of economics and legal texts (most books I read have chapters on this stuff), but I ahven't seen this distcintion before:

Most UK households and businesses already use central bank money in the form of cash, and private money in the form of bank deposits.

Bank deposits are not company scrip. I think the dollars in cash and the dollars in digital bank records were the same dollars backed by the same government. So... I guess I'm confused. I think the article is just plain wrong, but that's crazy talk.


Different money supplies? Sounds like our equivalent of M2, minus M1. Kinda weird way to name them, but I guess it makes sense if you consider it as something that came from fractional reserve lending, which comes from private institutions as opposed to a central bank.

[google google goolge] Okay. I always thought taht the money leant by commercial banks (and merchant banks) had to be, eventually, backed by governments. When the loans are paid off, the value was created by labour. When the loan is defaulted, the value has to be printed by the mint because labour isn't creating the value. The story I've bene using explains why business ha to be supported by government, mprevented from failing (Too Big To Fail), why defaulting on loans to commercial banks weakened "the economy," and could destabilize currency value, and even destabilize a government.

If fractional reserve lending really is money created by the commercial lender, and not an estimate of value created by the debtors' future labour (backed by government promise of emergency bailout - the prmise of creating whatever value labour can't produce), then there would be no consequences for loan failures and no conequences for govenrments refusing to back currency. It seems to good to be true. Which is my 20 minutes of thinking about it hot-take. Keynes' book is in another room and I'm too lazy to go re-read it tonight. (It's been a few years).


I'll go out on a limb and say that the government backs all of it because money is fungible regardless of where it's at at any given time, whether that be coins, bank accounts, or bonds. "Too big to fail" seems like a political characterization. On one hand, something too big failing might cause the wealthy to be mildly inconvenienced, and on the other, assets may have been so misplaced that government intervention in the short term is worth it compared to calling into question the economic soundness of a nation in general. The latter would be a situation where if not handled properly the consequence would be capital flight from the nation, its currency and assets, leading directly to depression.

My functional handling of macroeconomics isn't terribly astute, but I believe your description of fractional reserve lending as a metric of the future value of labor is theoretically and technically correct. In reality, it's all too often that foolhardy institutions may become too greedy, and wind up issuing far more money than the macro fundamentals may justify. (Like how the current stock market climate is heavily extremely speculated and largely decoupled from fundamentals.) In such a case an institution may become overleveraged and fail, having taken on too much risk for the amount of capital held. At some point an institution's positions may not be unwound without toppling dominoes elsewhere and in other institutions, including serious injury to the overall economy, its citizens, and potentially threaten national security.

Obviously the government won't allow that to follow through if it wants to maintain its status on the world scene, let alone a situation where its very survival is at risk. Government isn't necessarily obligated to cover for institutional failure or economic collapse, but in an economic crisis there are political ramifications no matter what course of action is taken.

Taken to the extreme, suppose America defaults on it's debt. What's the world gonna do about it? Well, they could take out their money from the economy, refuse to accept our currency or at least severely devalue it against their own, and they may rip up treaties and trade agreements. We could recover from such a situation, but it would be extremely painful, lead to a severe and prolonged depression, and ultimately relegate us to third world status when we do recover.

On a more realistic example, suppose a local bank fails. Well, sucks to be you if you were a customer with more than the $250k FDIC coverage, should have picked a better bank. Caveat emptor, biatches!
 
2021-06-08 4:00:05 AM  
FTFA: "The rise of digital currencies could lead to a flood of withdrawals from high-street banks, risking financial stability and the wider economy, the Bank of England has warned."


Yeah, it's totally the digital currencies' fault that miserable interests on bank deposits is making people withdraw their money. It can't possibly be all the central bank dumping free money on the banks instead.
 
2021-06-08 4:44:38 AM  
What crypto nerds miss, is that governments demand taxes in fiat currency forcing citizens to acquire  said currency by engaging in economic activities, such as providing hand jobs to truckers. Therefore if we collectively decide to ignore bitcoin, it will go to zero, but $ £ € and ¥ will have some value as long as their respective governments can extract taxes.
 
2021-06-08 9:30:46 AM  

mcreadyblue: Crypto market is down 10% today.


Well, a lot of folks got reminded that governments have this thing called "power", and that it enables them to cancel/take the crypto-poins any f**king time they want.
May have given a few of the "Galt's Gulchers" food for thought.
Or what passes for thought in that world.
 
2021-06-08 9:36:01 AM  
If you look at the chart, you can see that Bitcoin is entering a reverse double teacup handle phase indicating that it's preparing to enter a bull run and that things are cooling off between J Lo and Ben.
 
2021-06-08 10:09:12 AM  

Rapmaster2000: If you look at the chart, you can see that Bitcoin is entering a reverse double teacup handle phase indicating that it's preparing to enter a bull run and that things are cooling off between J Lo and Ben.


Okay, but who's on first?
 
2021-06-08 11:43:20 AM  

Stibium: I'll go out on a limb and say that the government backs all of it because money is fungible regardless of where it's at at any given time, whether that be coins, bank accounts, or bonds. "Too big to fail" seems like a political characterization


Thank you for the deep reply.

Yes, I suppose you are right that TB2F is a political characterization. Or, another way, an ethical characterization. ("What is money? Here is what it should do, here is why a different version would not work"). The fungible quality of money is a better way to look at it, because that also expands the responsibility of government into every activity that involves money. If government is responsible (which is political) then government's power is present so it can make choices when individuals run into problems.

Also, your observation that institutions over-leverage might be a symptom of an economy that runs on credit. Large busineses can get a loan, sell to people who buy on credit, who themselves are working for another company that is paying them with a loan, and so forth. The leverage on future labour gets pushed further into the distance by more layers of credit and interest payments. In which case, nobody can agree on which labour is backstopping the valule of which payment, or when.

Cryptocurrencies would be invented by observers who decide the over-leveraged credit economy's money is based on fictions. Crypto is invented by people who think it doesn't matter who chooses the fictions behind money, or what those fictions are. In reality, thoguh, the invetors of cyrptocurrency (except parodies like Doge), seem to think that Everyone maintains the fictions. ...I don't think that if money has become so leveraged that it means money is actually baed on fictions. Seeming and being are not the same. But I also think that people who participate in a system might not be responsible for maintaining it. Crypto is selling a fallacy in that regard.
 
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