Is there room for a State Run Cryptocurrency?

[tee-rex]

Haha we're back to this again?  Thought experiment:   if Central Bank suddenly stopped printing money,  would the money supply still increase? Or would it remained capped?

Thats basically the argument we're having

Back to what? Now you seem to be trying to avoid cornering at all means. Banks that create money through credit are a Central Bank's proxies. And if the Central Bank would somehow want to stop for some fancy reason its currency from circulation, no bank would be able to create money in the form of this currency "out of the thin air". I think I made it pretty evident. Central Bank money printing is a metaphor, credit money is just another way of emitting money into circulation by a Central Bank through its proxies (though there are other ways as well).

You are only talking about commercial banking.  Man why don't you read what I posted about shadow banking and see if you still come to the same conclusion.  Otherwise just agree to disagree.  Stick w your neoclassical view

Why do you send me somewhere to read something? Couldn't you explain your point yourself without outside references? Did I ever ask you in my posts to go read anything besides just my posts? I can explain in layman terms everything that I talk about since I understand what I write. Can you say the same about yourself?

Hmmn, I tried to explain it in layman's terms but you kept saying you don't get it.  I thought something common like car finance you would understand but apparently not.  There are non-commercial banks where credit money is being created.  In fact before the 2008 GFC more money was from this shadow bank sector than commercial bank sector.  Like other neoclassicals, you are missing half the picture.  That's why their models don't work

So you are now just saying that I'm not capable of understanding you explanations. Okay then. But you only answered one half of my question, that is that bitcoins cannot be created by banks, but you failed to address the issue how they can create state-controlled fiat. I think you wouldn't deny that the credit money allegedly created by banks out of thin air is the same money that is issued by the state?

[tee-rex]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer has the ability to print money as needed and if needed, so this question makes no sense in respect to him. In short, bank debts will be socialized. But I was actually asking about risk-free interest paid on bitcoin deposits, if there would be such. So no FDIC and no printing press at Fed that would help a failed bank's depositor out.

[Mobius]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

[tee-rex]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

So, if the FDIC runs out of money (because of multiple bank-runs), the U.S. government will print as much money as necessary to cover the FDIC deficit, thus making the taxpayers pay all the debts.

[twiifm]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free.  

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

So, if the FDIC runs out of money (because of multiple bank-runs), the U.S. government will print as much money as necessary to cover the FDIC deficit, thus making the taxpayers pay all the debts.

How do you figure taxpayers pay?  

[blumangroup]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

So, if the FDIC runs out of money (because of multiple bank-runs), the U.S. government will print as much money as necessary to cover the FDIC deficit, thus making the taxpayers pay all the debts.

The FDIC should prevent bank-runs. The reason the FDIC would run out of money would be because insurance premiums would not cover losses.

[polynesia]

The FDIC should prevent bank-runs. The reason the FDIC would run out of money would be because insurance premiums would not cover losses.

A bitcoin bank run would be instantaneous. 

[tee-rex]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

So, if the FDIC runs out of money (because of multiple bank-runs), the U.S. government will print as much money as necessary to cover the FDIC deficit, thus making the taxpayers pay all the debts.

How do you figure taxpayers pay?   

How dare you ask me questions now having not answered my own?

But never mind, I know that you can't answer anything coherent, so it doesn't matter. Regarding the taxpayers money, it is called socialization of debts, when ordinary people ("taxpayers") would indirectly pay for the bank debts by lowering their standard of living through inflation since the government would print money to cover the debts  (this is called seigniorage, i.e. "a right of the lord (seigneur) to mint money" from French).

[twiifm]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

So, if the FDIC runs out of money (because of multiple bank-runs), the U.S. government will print as much money as necessary to cover the FDIC deficit, thus making the taxpayers pay all the debts.

How do you figure taxpayers pay?   

How dare you ask me questions now having not answered my own?

But never mind, I know that you can't answer anything coherent, so it doesn't matter. Regarding the taxpayers money, it is called socialization of debts, when ordinary people ("taxpayers") would indirectly pay for the bank debts by lowering their standard of living through inflation since the government would print money to cover the debts  (this is called seigniorage, i.e. "a right of the lord (seigneur) to mint money" from French).

What does this have w FDIC running out of money?   FDIC has $500B line of credit @ Treasury. 

Are you talking about QE "printing money"?   Please show inflation if thats what you claim.   

[tee-rex]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

So, if the FDIC runs out of money (because of multiple bank-runs), the U.S. government will print as much money as necessary to cover the FDIC deficit, thus making the taxpayers pay all the debts.

How do you figure taxpayers pay?   

How dare you ask me questions now having not answered my own?

But never mind, I know that you can't answer anything coherent, so it doesn't matter. Regarding the taxpayers money, it is called socialization of debts, when ordinary people ("taxpayers") would indirectly pay for the bank debts by lowering their standard of living through inflation since the government would print money to cover the debts  (this is called seigniorage, i.e. "a right of the lord (seigneur) to mint money" from French).

What does this have w FDIC running out of money?   FDIC has $500B line of credit @ Treasury. 

Are you talking about QE "printing money"?   Please show inflation if thats what you claim.

No, that was not my claim, you just see what your eyes want to see. I was not talking about QE "printing money". There is no inflation out of this, since the QE money doesn't leak into circulation. I was talking about how debts are socialized and the burden of them is passed on to the taxpayer in general (by means of inflation).

[twiifm]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

So, if the FDIC runs out of money (because of multiple bank-runs), the U.S. government will print as much money as necessary to cover the FDIC deficit, thus making the taxpayers pay all the debts.

How do you figure taxpayers pay?   

How dare you ask me questions now having not answered my own?

But never mind, I know that you can't answer anything coherent, so it doesn't matter. Regarding the taxpayers money, it is called socialization of debts, when ordinary people ("taxpayers") would indirectly pay for the bank debts by lowering their standard of living through inflation since the government would print money to cover the debts  (this is called seigniorage, i.e. "a right of the lord (seigneur) to mint money" from French).

What does this have w FDIC running out of money?   FDIC has $500B line of credit @ Treasury. 

Are you talking about QE "printing money"?   Please show inflation if thats what you claim.

No, that was not my claim, you just see what your eyes want to see. I was not talking about QE "printing money". There is no inflation out of this, since the QE money doesn't leak into circulation. I was talking about how debts are socialized and the burden of them is passed on to the taxpayer in general (by means of inflation).

Is this your original claim?  that if FDIC needs money.  Fed prints money.   Inflation follows.   Taxpayers "pay the debt" of the FDIC via "debt socialization"

[Mobius]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

So, if the FDIC runs out of money (because of multiple bank-runs), the U.S. government will print as much money as necessary to cover the FDIC deficit, thus making the taxpayers pay all the debts.

How do you figure taxpayers pay?   

How dare you ask me questions now having not answered my own?

But never mind, I know that you can't answer anything coherent, so it doesn't matter. Regarding the taxpayers money, it is called socialization of debts, when ordinary people ("taxpayers") would indirectly pay for the bank debts by lowering their standard of living through inflation since the government would print money to cover the debts  (this is called seigniorage, i.e. "a right of the lord (seigneur) to mint money" from French).

What does this have w FDIC running out of money?   FDIC has $500B line of credit @ Treasury. 

Are you talking about QE "printing money"?   Please show inflation if thats what you claim.   

The inflation rate has been very low for the entire time that QE has been implemented. This is true throughout the world as many central banks have pumped tens of trillions of dollars into the banking system and the economy.

[tee-rex]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

So, if the FDIC runs out of money (because of multiple bank-runs), the U.S. government will print as much money as necessary to cover the FDIC deficit, thus making the taxpayers pay all the debts.

How do you figure taxpayers pay?   

How dare you ask me questions now having not answered my own?

But never mind, I know that you can't answer anything coherent, so it doesn't matter. Regarding the taxpayers money, it is called socialization of debts, when ordinary people ("taxpayers") would indirectly pay for the bank debts by lowering their standard of living through inflation since the government would print money to cover the debts  (this is called seigniorage, i.e. "a right of the lord (seigneur) to mint money" from French).

What does this have w FDIC running out of money?   FDIC has $500B line of credit @ Treasury. 

Are you talking about QE "printing money"?   Please show inflation if thats what you claim.

No, that was not my claim, you just see what your eyes want to see. I was not talking about QE "printing money". There is no inflation out of this, since the QE money doesn't leak into circulation. I was talking about how debts are socialized and the burden of them is passed on to the taxpayer in general (by means of inflation).

Is this your original claim?  that if FDIC needs money.  Fed prints money.   Inflation follows.   Taxpayers "pay the debt" of the FDIC via "debt socialization"

You might have noticed (well, you actually didn't) that I was talking about how socialization of debts works, and I specifically mentioned "in general". Regarding the FDIC, I don't know how much money they might potentially need, but if you insist, the answer is affirmative. In the worst case scenario, the sequence you described would necessarily lead to inflation (since the money "lost in debt" didn't disappear but just changed hands).

[cbeast]

When everyone is using cryptocurrencies, there will be no need for governments.

[tee-rex]

When everyone is using cryptocurrencies, there will be no need for governments.

Money is just a means to exchange things and not much beyond that. But you still can't buy power with money, for example (what governments are created for, i.e. to exert power upon people).

[Yakamoto]

When everyone is using cryptocurrencies, there will be no need for governments.

Crypto-anarchy, or crypto-libertarian. Best way to describe said scenario.

It would definitely be interesting to see what happens if this would occur, as I doubt governments would just step down and let the masses govern themselves...

[cbeast]

When everyone is using cryptocurrencies, there will be no need for governments.

Crypto-anarchy, or crypto-libertarian. Best way to describe said scenario.

It would definitely be interesting to see what happens if this would occur, as I doubt governments would just step down and let the masses govern themselves...

It's hard to predict what it would look like or how many lifetimes it will take.

[beaknuke]

Royal Bank of Scotland and others, gonna be interesting if you scots break away, then wales will want to i bet.

crypto, well it might work but scotland and england will be messed up a lot by the break up.

[twiifm]

Risk-free interest? In a bank? Are you kidding?

If you pick a large bank, your deposit is within the limit for federal insurance, I guess you could say it is risk-free. 

Who insures the insurer?

The insurer is the FDIC and the FDIC is backed by the US government who can essentially print near unlimited amounts of money without causing massive inflation. The FDIC also can raise premiums that they charge banks for insuring the deposits.

So, if the FDIC runs out of money (because of multiple bank-runs), the U.S. government will print as much money as necessary to cover the FDIC deficit, thus making the taxpayers pay all the debts.

How do you figure taxpayers pay?   

How dare you ask me questions now having not answered my own?

But never mind, I know that you can't answer anything coherent, so it doesn't matter. Regarding the taxpayers money, it is called socialization of debts, when ordinary people ("taxpayers") would indirectly pay for the bank debts by lowering their standard of living through inflation since the government would print money to cover the debts  (this is called seigniorage, i.e. "a right of the lord (seigneur) to mint money" from French).

What does this have w FDIC running out of money?   FDIC has $500B line of credit @ Treasury. 

Are you talking about QE "printing money"?   Please show inflation if thats what you claim.

No, that was not my claim, you just see what your eyes want to see. I was not talking about QE "printing money". There is no inflation out of this, since the QE money doesn't leak into circulation. I was talking about how debts are socialized and the burden of them is passed on to the taxpayer in general (by means of inflation).

Is this your original claim?  that if FDIC needs money.  Fed prints money.   Inflation follows.   Taxpayers "pay the debt" of the FDIC via "debt socialization"

You might have noticed (well, you actually didn't) that I was talking about how socialization of debts works, and I specifically mentioned "in general". Regarding the FDIC, I don't know how much money they might potentially need, but if you insist, the answer is affirmative. In the worst case scenario, the sequence you described would necessarily lead to inflation (since the money "lost in debt" didn't disappear but just changed hands).

In the event that the FDIC fund is insufficient,  the FDIC has credit at the Treasury.   The Fed isn't even in the picture.  Theres no protocol so an act of Congress is probably required to do what you are suggesting

Even if the Fed lends them money,  then the borrower (FDIC)  pays back the loan not taxpayers.   

Please prove the concept of "socialized debt" w real world evidence

[tee-rex]

No, that was not my claim, you just see what your eyes want to see. I was not talking about QE "printing money". There is no inflation out of this, since the QE money doesn't leak into circulation. I was talking about how debts are socialized and the burden of them is passed on to the taxpayer in general (by means of inflation).

Is this your original claim?  that if FDIC needs money.  Fed prints money.   Inflation follows.   Taxpayers "pay the debt" of the FDIC via "debt socialization"

You might have noticed (well, you actually didn't) that I was talking about how socialization of debts works, and I specifically mentioned "in general". Regarding the FDIC, I don't know how much money they might potentially need, but if you insist, the answer is affirmative. In the worst case scenario, the sequence you described would necessarily lead to inflation (since the money "lost in debt" didn't disappear but just changed hands).

In the event that the FDIC fund is insufficient,  the FDIC has credit at the Treasury.   The Fed isn't even in the picture.  Theres no protocol so an act of Congress is probably required to do what you are suggesting

Even if the Fed lends them money,  then the borrower (FDIC)  pays back the loan not taxpayers.   

Do you know what the word "indirectly" means, which I used in respect to ordinary people paying for the bank debts? What regards the real world evidence of debt socialization, Google is your friend (I hope you understand that you are presently not in the position of asking me to prove you anything).