Oddbean new post about login | logout Most of the world is completely unaware that the global monetary system is built on a house of cards, better referred to as a Ponzi scheme. The mass of men believe that the money they hold is good money and that the people who control that money, the central banks, are the smartest people in the room. This class of unwitting men is completely unaware that every central bank around the world is engages in moral hazard on a day to day basis because they are operating in a system with completely perverse incentives. https://tftc.io/central-bankers-are-bragging/
I totally agree. Preach it Marty.
They certainly don’t understand the STAY HUMBLE part. And come to think of it they don’t get the STACK SATS part either.
Interesting. Perverse incentives as dreamed up by John Maynard Keynes. A gay pedophile. Weird...
It's due to a flaw in the concept of fungible money. I'm not suggesting we all trade NFTs, but "printing money out of thin air" only works for the bankers because there's no practical distinction between money backed by real value (i.e. labor, goods, services, energy, etc) and money backed by nothing. In other words, central bankers are printing & minting perfect counterfeit money. #Bitcoin fixes this by making it virtually impossible to create money by fiat and by making all #Bitcoin traceable back to its origin. We may not know who mined the $BTC, who owned it, or what it was for, but at least we know it wasn't created from nothing. It's the product of both time and energy.
Fiat is backed by banks collecting debt in conjunction with courts and the sheriff. Its basic contract law, just like any other agreement.
So in the old days, governments would try to print up money directly. However, they ended up screwing themselves every time because people would dump the currency. So then they tried printing it up and loaning it out. This worked better, because people up to their ears in debt with money, were less likely to dump it. But since governments have no self control, they would eventually overdo it and crush themselves, resuting in a currency blow-out. So then they started to create private banking cartels, supposedly "independent" from government, with a private interest in maintaining their cartel. In theory, the interests of these "private" cartels would keep government from going to far. In practice, they get the entire economy addicted to cheap credit and create a stream of never ending market bubbles. At a certain point, the goals of the banking cartels become indistinguishable from government, and the entire financial system becomes soft-fascist and pushes a national socialist agenda on the publically traded companies they control. Welcome to the USA, a socialist shit-hole.