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Wandering_Dog

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  1. I think that is the point of contention: the basic law states a basic minimum existence is a legal right, and therefore it is illegal to impose constraints. For example, if an individual voluntarily fails to search for work, payment cannot be withheld, as that would violate their human right to a minimum subsistence existence within German legal jurisdictions as stipulated by the basic law. As such, the law provides for a truly unconditional universal basic income, as it is written. EDIT: And that's the fight being fought now, essentially--at least that was my understanding of it.
  2. Germany's constitution has basic income written into it. It was a provision, afaik, mandated by the US following the war, in order to prevent such outcomes (liberal economic system failure) in the future. Germany must provide a basic income to its citizens (subsistence existence as a minimum human right), by law. If you're against it, you're assuming liberal economic systems are stable--which as a German, you should be familiar with the empirical evidence against this. https://www.dw.com/en/germany-court-rules-welfare-sanctions-unconstitutional/a-51115790 https://www.researchgate.net/publication/331624696_Casenote_--_The_Fundamental_Right_to_the_Guarantee_of_a_Subsistence_Minimum_in_the_Hartz_IV_Decision_of_the_German_Federal_Constitutional_Court
  3. Different use of the term. I'm talking about assassinations of political figures, burning down parliament/central banks/treasuries, and domestic involvement of the military in their primary role (killing people).
  4. The inflation hedge thesis. The trouble is, we won't see consumer goods and services inflation. We'll see asset price inflation. So it's not a hedge against degrading purchasing power unless you are rich, some irony there, for what it's worth. Political unrest is sure to follow if they let this continue.
  5. At the time I'm sure they were not predictable at all! Looking at a log chart now, one would swear a 5th grader could make money on it. Every 2-3 years, you have a major run of prices, like what we're seeing now. It's absurdly regular now, such that, one could argue, it shouldn't exist. But here we are.
  6. Why is it then timed somewhat sequentially with other historical crypto runs?
  7. I don't think crypto is a hedge, although I thought previously it certainly was possible. The behaviour it exhibits is a risk-asset. It tanks in downturns. Risk assets are on the run, crypto is on the run as well. If we're arguing that CB money is pumping asset prices (we know this), then a hedge thesis, I would would argue, will get you burned. Do the exchanges report their fiat inflows in a reachable place? Is this another tether print prump?
  8. Nothing happened? Globally central banks and gov treasuries converted assets to cash or added fresh money to the economy at a rate of $3 trillion per month, just to get from March to May. There is a global moratorium on all mortgages and rental payments, and billions of household members have been given money outright as basic income. All to save asset prices. And now we see late cycle ramping behaviour... I'm all for acknowledging a tremendous amount of debt that has been wiped out households and some firms balance sheets leading contributing to this. However, there has been a monumental increase in zombie debt added as well. And everything is relying on more CB intervention. This is certainly the craziest moment for a crypto ramp, I'm all ears for causes.
  9. JFC, that presentation could have been summarized in 5 slides and taken 3 minutes. Who took over Tar's account and is now posting TA and conspiracy theories?
  10. I took a quick read through what I could find on 'FXRP', and after a few misplaced links I think I read what you are talking about, but I didn't really get much useful info from it. If you have a link that might help.
  11. US municipalities are facing tax revenue shortfalls, as spending has fallen, incomes drop, forcing local gov to cut employment and services. The risk is micro deflationary spirals in small local economies that may increase political instability on the local level (violence). This effect is largely politically motivated at the Federal level, and may have lasting impact on US cities, which are often surplus generators for inter-state redistribution and largely represented by the democratic party. Ignoring the political dynamics and focusing purely on short term economic effects of unemployment and service shortages, we can identify an interesting problem the XRPL can resolve: Problem: Local municipalities are experiencing currency shortages. Problem: Local municipalities do not have resources available to develop their own ledgers with a new denomination of local currency, commonly referred to as a 'complimentary currency'. There is a use case for development of a user-interface for municipalities to issue their own currency on the XRPL, and a wallet service that local constituents would then use to make tax payment in local currency back to the issuing municipality. How the solution works: 1) Municipality creates new denomination of local currency via XRPL. 2) Municipality redenominates a local tax upon local residents in terms of the new currency. 3) Municipality then offers to covert new local currency for USD 1:1. Because every municipality would share the same base ledger, conversions between local-local and local-usd could be instant and nearly costless. Thus most frictions found in multi-currency regions would be eliminated, while creating demand locally for local currency would provide municipalities with additional fiscal space typically only available to sovereign governments.
  12. Its a paraphrased quotation of Werner, which can be viewed on YouTube in several of his interviews. The legal operations of deposit creation have multiple sources that we can draw from, and endogenous money theory is hundreds of years old. However Werner is particularly quotable despite being a non-native English speaker.
  13. A ledger is not a legal instrument. It's just a method for tracking something. If someone writes into a ledger that they own or owe something, or have X of some currency, this is not a legal right or obligation, its just an arbitrary number in a ledger. Swap line contracts dictate how much a foreign CB can borrow and what the fx rate will be. The ledgers are just tracking how each entity has used the contract. Say the ECB and Fed enter a swap line contract for $10, and when the ECB requests $10 the Fed inadvertently types in $100, this entry has no impact on the contract. The contract prohibits such an outcome, and the parties must correct the error, in this case the Fed deletes a zero. [I went looking around the Fed website for an actual contract but didn't find one. If you take a look around online you'll find one eventually]. In the Thai Baht example, the US spent the Baht on something, and it promised to repay that amount in the future. The Thai CB must be interested in creating some kind of economic activity by making that loan. Maybe it wanted the US Gov to spend on goods and services in Thailand, which would increase GDP. Then later, when the US needs to repay, it has to engage in some form of economic activity to reacquire Baht from other account holders. When the US refused to repay, those deposits sit out in the economy, in some Thai commercial bank, rather than being removed from the economy by the repayment. If the Thai CB wanted, it could freeze the accounts of the recipients, in order to reduce any additional economic activity, such as if they were concerned about inflation or financing terrorism. Does it matter? Sort of: those deposits are purchasing power. If the Thai CB had given them to you, and you bought Lambo's, then you get Lambo's and the economy gets increased demand for luxury sports car imports. Is that good for the Thai people in general? Probably not. The Thai CB could loan out for spending on anything, but its constrained by the legal system not to, and this is an entirely different conversation about how we choose to organize our economy politically, who holds the power to create purchasing power and why. That power has been delegated to commercial banks. Excess reserves mean that some group of people made bad loans, and had to sell assets to the CB in order to make debt payments, which defends the (asset) price level. So, the system became fragile, the CB intervened, and now there are excess reserves and the commercial banks are scared. They think by tightening lending standards they will reduce their risk exposure to future defaults, but they actually are just reducing the amount of deposits in the economy, which increases defaults. This is a feedback loop. So yes, I think. Technically CB "money" is also credit, as its a non-convertible liability. How you want to define things in English is up to you, the speaker, just make your definitions clear. Credit is money. Note that money is not created through a 'fractional banking' process. Just let that go. Bank loans create their own deposits. The bank is purchasing a security from you (the loan) in exchange for its own liabilities (the deposits). If you want to get specific, think of everything in existence as having a parameter value called "moneyness". This parameter takes a value between 1 and -1, when its 1 its used for final settlement of any contract on Earth, when it's 0, its unusable garbage that no one wants, when its -1 it's harmful radioactive waste (like an oil future in March). And this parameter changes over time according to the behaviour of system participants themselves. So, in your example, a Fed reserve deposit has a moneyness value of 1, it is the final unit of settlement. But ironically, the moneyness of reserve deposits changes depending upon the system itself: If someone had an account at the Fed with $10 in it, you couldn't accept it in payment because you have no account at the Fed. [moneyness ≠ 1] If you have an account at a commercial bank, you can accept it, the bank can hold the deposit on your behalf. [moneyness = 1] If they convert those reserve deposits to cash at the Fed, you can accept cash anytime. [moneyness = 1] If you are a store that doesn't accept cash, you won't accept cash. [moneyness ≠ 1] So all credit is money, but it's moneyness varies--sometimes it's not really money at all, it depends.
  14. It's fun to think about. The swaps have been unwound, you can check out the Fed's balance sheet here and the track swap line changes here. I was talking about on a CB's ledger. The CB USD swaps are settled on the Fed ledger with USD. If the US CB enters into a contract to borrow Baht from the Thai CB, the position is recorded on the Thai CB ledger. It is settled there when another account holder at the Thai CB transfers Baht to the Thai CB (which is recorded as deletion of that money). The US CB will record something on their own ledger accordingly, but that US ledger entry doesn't have any effect on the contract between the US and Thailand, its just an accounting entry. Resolution of the contract would be in the contract terms or fall into some international court according to existing international law, here you'd have to talk to the more legal-focused economist types for specifics. In general however, there is nothing preventing the US from saying 'eh, whatever' and not ever getting anyone on the Thai CB ledger to transfer that Baht, and the Thai CB is of of luck (but not really, its just accounting entries to them). Because Thailand has no power over the US legal system. Pretty much. It's just typing in numbers in a computer. Operationally its probably similar to opening Excel and typing +100 in cell A1. The Fed has no control over the total money supply, its fully privatized (by commercial banks and shadow banks). If the Fed gives you an account at the Fed, and marks up your account by 1000, and you then spend that, they they would be affecting the money supply. To control it, they would have to take a much more active role dictating lending to the banks themselves, such as in Japan post WW2. Reserve balances are uncorrelated with bank lending. There may even be a case for negative correlation, as high excess reserves is a signal of fragility, and banks don't lend into that environment, they tighten lending standards instead. When assets roll off the CB balance sheet, the total amount of reserve deposits decreases, as the reserves are used to pay off the maturing asset and the CB only accepts reserves as payment. For this to occur without any issues, the structure of obligations must be robust, as the total amount of settlement balances is decreasing. Typically, this is not the case. Given some level of reserve deposits, banks then take on additional risk using those deposits as a 'foundation' assumed to always exist. This is the basis of Minsky's financial instability hypothesis: reckless behaviour only increases over time, it never decreases. There is nothing stopping banks from improving their behaviour, reducing risk, lending more productively. Empirically, the opposite always occurs. So yes, the balance sheet may reduce as the assets roll off. However, you will generally see a large increase to the balance sheet as the structure collapses and intervention is required to defend the price level. Fed RR can be seen here.
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