Finance

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#1
The financial system is needlessly complex, its unclear if this is intentional in order to hide whats actually going on.

Its unclear what even counts as money, in the united states the following system exist

M0: The total of all physical currency including coinage. M0 = Federal Reserve Notes + US Notes + Coins. It is not relevant whether the currency is held inside or outside of the private banking system as reserves.

MB: The total of all physical currency plus Federal Reserve Deposits (special deposits that only banks can have at the Fed). MB = Coins + US Notes + Federal Reserve Notes + Federal Reserve Deposits

M1: The total amount of M0 (cash/coin) outside of the private banking system[clarification needed] plus the amount of demand deposits, travelers checks and other checkable deposits

M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).

MZM: 'Money Zero Maturity' is one of the most popular aggregates in use by the Fed because its velocity has historically been the most accurate predictor of inflation. It is M2 – time deposits + money market funds

M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements.

M4-: M3 + Commercial Paper

M4: M4- + T-Bills (or M3 + Commercial Paper + T-Bills)

L: The broadest measure of liquidity, that the Federal Reserve no longer tracks. L is very close to M4 + Bankers' Acceptance

Money Multiplier: M1 / MB. As of December 3, 2015 it was 0.756.[36] While a multiplier under one is historically an oddity, this is a reflection of the popularity of M2 over M1 and the massive amount of MB the government has created since 2008.
 

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#2
About national debt
A lot of countries have most/all of their debt in their own currency and therefore its very unlikely they will default on their debt, instead whats very likely to happen is that the central bank will step in lending out money to the government directly or indirectly.

The obvious issue with having the government lend money from itself is that it increases the effective money supply (inflation) which is very likely to cause increased prices measured in your national currency.
 

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#3
Why no digital equivalent to cash?
A digital equivalent of cash does not really exist, the closes is the deposit central bank account but that is typically only available to some banks. The closest think you can get to digital banknotes as a private citizen is government bonds but you can typically get a better interest by simply having an ordinary savings account insured by government (up to a fixed amount).

There isn't really any good reason for the government to prop up private banks by guarantying deposits up to a certain amount (for each bank). It would be better to have a digital equivalent to cash that is not being landed out to anyone. Several central banks are currently working on this but it takes a lot of time.

An interest of 1% could be given up to a fixed amount benefitting citizens with small to medium savings.
 

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#4
Gold
Unlike fiat currencies like bitcoin and dollar gold has intrinsic value and unlike government money it cannot just get printed, its very expensive to mine more gold and the more you mine the harder it become to find more.


Unfortunately dealing with physical gold is unpractical and a bit costly. If you sell your gold you will typically get significantly less than the metal value while you need to pay more than the metal value to buy it, especially if you buy smaller amount.

https://findbullionprices.com/closest-to-spot/?category=gold&

Gold is still useful (especially for governments) as a way to store value, its a lot more solid than foreign currency which is why a lot of countries (china, russia, india, etc) have increasingly switched over to it instead of holding US government bonds that over time get closer and closer to zero in value.
 

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#5
Is the dollar about to collapse?
Eventually if the money printing continue the value of the dollar will collapse, this however may not actually happen, instead we might see an deflationary implosion due to the central banks trying to prevent an hyperinflation apocalypse Weimar republic style.

 

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#6
2 catastrophic scenarios
Central banks have for a long time drastically inflated the money supply, this has fueled various bubbles such as the cryptocurrency insanity (currencies backed by nothing being worth over a trillion $).

Eventually if a central bank continue with the money printing insanity their currency will implode wimer republic style which will be a total economic disaster, in that case your only good option for preserving a significant portion of your wealth is precious metals like gold, platinum, palladium, rhodium. The issue with silver is that you need too much of it to store a big amount of value and thus its not really practical in the case you need to re-locate quickly taking your valuable metals with you.

But will central banks really let their currency collapse? most will probably resort to hiking their interest rate in an attempt to combat CPI-inflation and in that case gold might actually drop in value, same with stocks and housing.

Stocks will only really do well if neither of these 2 extremes comes to fruition. In the case of catastrophic ilfation stocks will fall relative to gold while increase nominally (which will be taxable if you sell unless you use special savings account).
 

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#7
Why workers co-ops is a terrible idea
The issue with worker co-ops is that the ones building the company will not get proper ownership of it. Instead you only get the profit from the period you worked there and thus there would be a perverse incentive to prioritize short-term profits since once you leave it doesn't matter what happens to the company.

There is nothing wrong with workers owning stock in the company, it's actually a good thing since humans generally want to belong to something bigger and if the employees own stock they will get a share of the profit and thus be more motivated to work hard. It's especially important that executives own stock.

Facebook stock ownership was initially limited to people who actually worked for the company and arguably this helped making facebook a success. The people who helped build the company actually got the fruits of their labour.

https://www.businessinsider.com/first-20-facebook-employees-where-are-they-working-now-2017

We should introduce a system where shareholders of a company they work for get taxed less and allow people to get paid in stock and have it not be taxed until they sell (dividents will be taxed via the normal capital gains rate).
 

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#8
The way some worker co-ops try to solve the issue of rewarding people who join early is to require you to pay money to become a member

Once membership is mutually accepted, the worker has 36 months to contribute his or her initial capital share of €15,000, which represents the system’s minimum annual salary. This can be amortized through salary deductions, or in some cases borrowed from a bank as “capital to work.”
https://drpop.org/mondragon-how-do-you-become-a-member/

The issue is still however that you do not get proper ownership, they may find out that they do not need you and then you get let go.
 

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#9
Modern monetary theory
Of course when you can print the money you owe to other people you can always avoid technically going default.

Why worry about being like Greece if we have the option to be like Zimbabwe instead?

fee.org/articles/modern-monetary-theory-debunking-the-latest-incarnation-of-government-s-magic-money-tree/

This is arguably a case in favor of the Euro, then governments cannot as easily resort to money-printing to finance their budget deficits, there is actually a real risk for default.
 

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#10
Why UBI/NIT is better than the current welfare system
With the current welfare system people essentially get trapped into welfare dependence since if they start working even a little they will lose out on welfare benefits and not earn much if anything extra from it, in addition they might not be able to get their welfare back since they have now demonstrated that they are capable of working.

It's especially bad for people wanting to start a business since you will generally not be allowed to get welfare benefits as you are building up your company (possibly because the left wants to keep people in welfare dependence).

Financing UBI
It's relatively simple, you simply severely cut traditional welfare and raise the tax-rate on people who earn a small income. With more people working (since it would become incentiviced to earn your own money) the government would earn more allowing for bigger UBI than what we could afford today with the current tax-base.

Negative income tax
It's just a different description of what is effectively the same system.

With NIT you will get back money from the state (instead of having to pay money in taxes) if your income is small resulting in people in effect having a universal basic income since your income cannot be smaller than a certain amount (unless you lose money).

non-egalitarian basic income
Instead of giving the same amount to everyone different people can be given different basic income, this can be determined by your citizen-class.

For example we may want to give more money to young people and less to the elderly (that are less useful and cannot really rebel anyway).
 
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