It makes me question why we allow government to be in charge of our money, and the price of money (interest rate meddling by govt contractor federalreserve). I suppose we grow up with it and don't question it.
>It makes me question why we allow government to be in charge of our money
This isn't true. Private currencies exist(ed) and are afaik still legal.
The reason we put governments in charge of our money is that up until about a decade ago it was either the government or a corporation as a decentralizes currency was not really implementable. Do you want to get paid in amazon coins only redeemable on amazon? No, you do not.
>interest rate meddling by govt contractor federalreserve
You need to do that. Any currency needs some mechanism to control issuing. If not the government who else could do that?
> This isn't true. Private currencies exist(ed) and are afaik still legal.
For most of my life, those were ancient history or theoretical. Then in 2009, something changed.
And ever since then, I've seen nothing less than the most zealous propaganda campaign to undermine those... it's bizarre to watch it unfold. I keep side-eyeing everyone, wondering if I'm the only one that sees it. Sure, it doesn't help that the cryptocurrency people are whackjobs that might have screwed it all up without any outside help. But I guess they couldn't trusted to do that, so the help was provided.
Saying that it's "legal" doesn't change the fact that if someone were to come up with a private currency, gigantic forces, government and not, would be arrayed against them to put an end to it.
> Any currency needs some mechanism to control issuing. If not the government who else could do that?
I think the implication here is: who could be trusted to do it in a way that doesn't favor some at the expense of others?
>Saying that it's "legal" doesn't change the fact that if someone were to come up with a private currency, gigantic forces, government and not, would be arrayed against them to put an end to it.
Thousands of private currencies exist right now.
Nobody would care about your currency, since it is useless, and as such worthless. A centralized currency is an enormous social asset. Nobody wants private currencies.
>who could be trusted to do it in a way that doesn't favor some at the expense of others?
Just try to imagine a currency controlled by amazon. Do you think they won't do some hyperinflation making you poor once a decade?
The controller of a currency has enormous power. If the government can't handle it nobody can.
> Just try to imagine a currency controlled by amazon. Do you think they won't do some hyperinflation making you poor once a decade?
Do you think that the US government and the fed don't do this? You don't see it, of course, because they also report the numbers you use to decide if there is inflation.
And who says that it has to be controlled at all, in the sense that some singular entity controls it, rather than an algorithm?
> The controller of a currency has enormous power.
Yeh, and it's no less a problem when it's the government rather than Amazon.
>Do you think that the US government and the fed don't do this? You don't see it, of course, because they also report the numbers you use to decide if there is inflation.
Inflation is an objective measure it is the price increase for a certain basket of goods. Yes, you can fake it to a certain extent, but this is true for everything.
>You don't see it, of course
What? That is totally false. Inflation is one of the easiest metrics to spot.
>And who says that it has to be controlled at all, in the sense that some singular entity controls it, rather than an algorithm?
Practicality. Either the algorithm is extremely simple (BTC) or you will ruin your economy.
>Yeh, and it's no less a problem when it's the government rather than Amazon.
I have thought about building an algorithmic stable coin kind of like RAI but the problem is that actually defining and measuring a price level is the hard part.
Doing that on a nation state level means betting your economy on the algorithm always working correctly.
You also have to be resilient to attacks on your currency and an algorithm gives your oppponent certainty on how you will react. You need human control at some point.
I mean, that is true in the same way that if I want to create some shrutebucks and loan them out at the schrute reserve rate you are also free to loan out shrutebucks at whatever rate you want.
The fed may have a small advantage you are willfully overlooking.
If we believe neoclassical theory then if the fed sets the rate too high we get deflation and if the fed sets the interest rate too low we will get inflation and we will get those things very quickly with very little delay. This means that the policy rate would have to mirror whatever the optimal market rate is.
If we accept some minor inflation, then the fed is always setting the rate a bit too low rather than too high.
In other words. Whatever the Fed does, it is mostly irrelevant.
On the other hand, if there is actually some leeway and elasticity then monetary policy can actually result in increases in economic welfare. In this scenario we want to see some utilitarian meddling.
Because it enables monetary policy which is in large part responsible for the most successful economic century in human history. Why do you think the "natural" interest rate is better than the feds?
Because you get bombed if you don't accept it. There's no "we have allowed", it is "they have imposed", and you and I were born into a slave system. Thank God there are ways to escape, such as crypto and foreign accounts.
I agree, American subjects have a much harder time to escape with foreign accounts, but where there's a will there's a way. The US also has some interesting domestic solutions, since it's a union of states.
