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About Wandering_Dog

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  1. Anonymity undermines financial stability several ways. First, it conceals the underlying structure of debt in an economy (who owes what to who, due at what times, and what amounts). All contracts are built and will be built on this debt structure. The inability to perceive this structure prevents economic agents from making the best possible spending decisions to correct system imbalances. Second, anonymity conceals the distribution of income and wealth, which increases the rate of tendency towards monopolization in an economy. Monopolies secure rentier positions by using their initial, competitively obtained, surpluses to inhibit competition through political means--concealing this data from the public makes this problem worse. Third, anonymity conceals the flow of pre-existing funds and the flow of money creation in an economy, which increases the tendency of a monetary economy to generate unproductive investment and reduces our capacity to respond to financial crises. Simply put, it's difficult to identify mal-investment and mis-allocation of credit money if you can't see where it is going or who doesn't have enough. Fourth, anonymity increases the power of centralized institutions, especially in the banking sector. Hiding balance sheets from public view makes democratic oversight of the financial system impossible. Most importantly, I think, is that the idea of monetary privacy implies that people want to conceal information from the public in order to manipulate economic outcomes in their favor. This is true also of our avatars, we wish to conceal our identities in order to protect our true selves from the excessive risks we are willing to take under the guise of a pseudonym. This undermines the basis of a monetary economy--relationships. Money is credit, and credit is a system of relationships. Severing or obscuring those relationships inhibits healthy, productive economic activity.
  2. One option could be... the purchase of shares in secondary markets outside of your domestic currency area, such as the purchase of British or American company shares denominated in GBP or USD using EUR, for example?
  3. Sounds great, send me your labor for 100 days, here's 1 Trillion Wander Dog Token deposits, its recorded on my balance sheet, have fun. Walk me through Barclay's recapitalization, and show me which part of it was self funded and which was credit created on its balance sheet, the balance sheet of Qatar, and the ECB. My point exactly, we create something from nothing, and it controls everything.
  4. There is always a free lunch. Come join the realm of sovereign currencies, leave your municipality "Germany" behind. Not every loan is collateralized, unsecured debt is a thing. Furthermore, a self-funded capitalization through a willing borrower has no collateral. It's based on nothing. The ledger is nothing, and it commands us all.
  5. How so? I expand my balance sheet to a colluding borrower creating a loan and the deposits, we exchange shares for deposits, I create new deposits for you, then declare the loan unrecoverable and reduce my tax burden. (Note that this was assuming I had to settle this transaction with reserves, but according to you, my deposits have value based on the borrower, so I won't be settling with reserves, you should be ready to accept the deposits themselves in exchange for goods and services. Hence the need for me to juggle my balance sheet in such a way, as Barclays did for example, is unnecessary, and my solvency is irrelevant.)
  6. Well, why do we have a central bank with reserve deposits at all, @tar? According to your claim that the value of a bank's liabilities (a bank deposit) is a function of the solvency of the borrower, then bank's can settle transfers of their liabilities using their own assets, or even derivatives based on those assets, according to who the borrower is. But we don't see that do we? Furthermore, think about what you just said. The solvency of a borrower is a function of bank lending, that's circular. Hence the value of bank deposits is a function of bank deposits--not very useful information. Barclays can type any number into its ledger that it wants. If it wanted to over capitalize in 2009, it could have typed 6 trillion into its ledger rather than 6 billion, or any number. The Qataris would likely be indifferent, considering the interest rate can be set to 0 and repayment delayed forever, or erased entirely just as easily. Why? Think about it. I can issue you bank deposits in my fictional bank. Here's a trillion. Will you accept my unconvertible liability as payment?
  7. This was assuming that ILP involved actual bank deposits with bank account holders acting as a payment layer. This isn't what ILP is, per Evan Schwartz above, ILP doesn't use bank deposit money and is not currently connected to any monetary system, making it an arbitrary tally record. If you or I recorded our monopoly money tx's in a T account online, then currently the 2 systems would be equivalent. The descriptions of ILP above are incorrect.
  8. If you or I start a business as connectors, or if we conduct business as connectors under our own names, are we not payment providers, or providing some form of payment service?
  9. I'm assuming that implies a hierarchical relationship between the 2 banks, as why would a bank, equivalent of another bank, agree to hold their liabilities as an asset, when those liabilities ultimately have no "value", given that the bank can create an infinite amount of them. Unless we have data on Bank of America holding deposits at Wells Fargo, for example. It strikes me as making little sense.
  10. Just to be clear, you are saying that a bank can open an account with another bank, and hold some of their competitor's bank deposits, and vice versa, correct?
  11. Hm, private parties who want to be connectors disperse their bank deposits to multiple commercial banks, and create a private payment layer below the Fed using banks' existing infrastructure? If the flow is balanced, would banks need reserves? They create money through loans and all payments could be settled on this new layer. Banks make money with zero risk (!), effectively pushing their liquidity risk onto participating private citizens who borrow from the banks? If flow is unbalanced, each bank has its own interest rate that connectors face as a constraint on their activity, pushing up connector fees on deficit commercial bank ledgers and down in surplus commercial bank ledgers? Is a citizen, acting as a connector, then considered a bank, and are they then regulated as such? Edit: ILP currently acts as a point keeping system, it doesn't involve settlement and doesn't involve the transfer of "actually money" ie bank deposits (and perhaps not crypto either). As with all things, it requires the adoption of the gov to function beyond a point keeping system.
  12. Any "transfer" of a bank deposit liability between 2 banks, for example, involves 3 ledgers. The bank, the fed, and another bank. So if the Fed is not running interledger, what is going on? 2 banks can't transfer anything without communicating with the fed. So a bank may send ILP packets to another bank, but who is communicating with the Fed to actually settle the transaction?
  13. You'll have to explain the mechanics behind a margin call on an instrument that isn't created on margin, I don't get it.... Or do you mean people are using credit ("margin") stable coins to purchase other securities?
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