An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Thursday, October 21, 2021
Zero Hedge — "We Could Not Ignore It Anymore" - Houston Firefighters Pension Fund Piles Into Crypto
"alternative assets"? Even tulip bulbs have some real value. Crypto has no real value and creates no income stream. It is impossible to evaluate.
Moreover, crypto is not scarce. There are many forms of crypto and no limit on the creation of more. The assumption that Bitcoin is scarce and will remain scarce is gratuitous.
Agents with a fiduciary responsibility to principals should not be permitted to "invest" in extremely speculative vehicles. It's not only irresponsible but crazy.
On what basis is it logical for the state, acting for the public, to provide risk-free savings — essentially free money — for the benefit of a minority, most of whom are well-off. That needs to be justified.
The justification of pensions funds is also of dubious merit, since the state acting in the public interest can just provide the funds for pensions directly with currency issuance without going through the present charade that masks the actual institutional operations.
A 6% us govt security is authorized for ERISA accounts by the ERISA law passed over 40 years ago… that’s why…
No problem, just issue it as free money for a good cause and don't confuse the issue the way it is now.
Tom youre too old (I’m too old) to understand crypto
Matt, neither of us are too old to understand that there is no basis to crypto as an asset in the traditional sense. Crypto is neither an asset nor a currency they way these are defined. The use of the terms is analogous rather than univocal and the analogy is very weak. As a speculative vehicle it is "blue sky." ("The term first appeared in a supreme court decision by Justice Joseph McKenna in 1917 and he defined blue sky as "speculative schemes which have no more basis than so many feet of 'blue sky'"….)
They are putting together systems as alternatives to the Fed and other systems of central banks
And we know why modern central banking was put in place in the early 20th c. as the lender of last resort. The purpose is to provide ultimate resilience to the financial system that lies at the heart of modern monetary production economy.
The larger issue, however, comes in a couple of decades when climate change threatens severe economic contraction, if not civilizational collapse and potentially a mass culling. The rage the oncoming electorate is going to be feeling at the derelict irresponsibility of previous generations that has left their mess to the coming generations will be off the charts.
Practically speaking, there doesn't seem to be any way of dealing with this owing to political conditions, both domestic and international. And this is now pretty much baked in, even if there are no big wars or more pandemics.
“ And we know why modern central banking was put in place in the early 20th c. as the lender of last resort.”
lol that’s not what they do… they create the crises by increasing reserve assets at the Depositories “to lend out,” and then DONT lend they get Congress to do an appropriation…
Bitcoin is a “utility coin” it is used for settlements globally … it is valuable for this reason…
iow from an anti nationalist perspective the best system would be fixed exchange rates at parity… 1 USD = 1 CNY = 1 EUR = 1 JPY etc
Then if you export to other nation and get paid in that unit, you just come back to your country and get your CB to exchange you out at 1:1 …
Then the decision just comes down to whether you want to send the goods or materials to the other nation or not… this is how it used to be done..,
This is what Bitcoin does in effect it’s the same coin in every nation…
The tech people are trying to get around the current systems of central banks run by Art degree morons who can’t even apply eighth grade algebra and think Accounting abstractions are REAL.. so they created this global utility coin…
With interest rates at zero (which is all these kids have ever known) everything can be done with net 30 or net 60 trade credit… don’t really need the banks to provide credit… all you need is a settlement system when you are at permanent ZIRP…
If it had legs, I would be supporting it. On one hand, it's a utopian dream, and on the other it is a scam.
What I do support is an international system in which nations are currency sovereigns under actual democracy, you know, governance of, for and by the people, rather than an oligarchy, which is what a republic is because it was designed to be.
It is premature to support internationalism because it is now bourgeois internationalism controlled by the factions that hold status, wealth and power. The push for globalism is by global elites for global elites based on trickle down, which is what neoliberalism is.
The notion that Bitcoin is going to change this for the better is just delusional.
"alternative assets"? Even tulip bulbs have some real value. Crypto has no real value and creates no income stream. It is impossible to evaluate.
ReplyDeleteMoreover, crypto is not scarce. There are many forms of crypto and no limit on the creation of more. The assumption that Bitcoin is scarce and will remain scarce is gratuitous.
Agents with a fiduciary responsibility to principals should not be permitted to "invest" in extremely speculative vehicles. It's not only irresponsible but crazy.
"Idiots proposing ZIRP"
ReplyDeleteOn what basis is it logical for the state, acting for the public, to provide risk-free savings — essentially free money — for the benefit of a minority, most of whom are well-off. That needs to be justified.
The justification of pensions funds is also of dubious merit, since the state acting in the public interest can just provide the funds for pensions directly with currency issuance without going through the present charade that masks the actual institutional operations.
It's both dumb and disingenuous.
A 6% us govt security is authorized for ERISA accounts by the ERISA law passed over 40 years ago… that’s why…
ReplyDeleteTom youre too old (I’m too old) to understand crypto… and it doesn’t pay interest either…. All these kids have ever known is ZIRP…
ReplyDeleteTom skim thru this to the parts with Jack Dorsey and Elon musk
ReplyDeletehttps://youtu.be/Zwx_7XAJ3p0
They are putting together systems as alternatives to the Fed and other systems of central banks
A 6% us govt security is authorized for ERISA accounts by the ERISA law passed over 40 years ago… that’s why…
ReplyDeleteNo problem, just issue it as free money for a good cause and don't confuse the issue the way it is now.
Tom youre too old (I’m too old) to understand crypto
Matt, neither of us are too old to understand that there is no basis to crypto as an asset in the traditional sense. Crypto is neither an asset nor a currency they way these are defined. The use of the terms is analogous rather than univocal and the analogy is very weak. As a speculative vehicle it is "blue sky." ("The term first appeared in a supreme court decision by Justice Joseph McKenna in 1917 and he defined blue sky as "speculative schemes which have no more basis than so many feet of 'blue sky'"….)
They are putting together systems as alternatives to the Fed and other systems of central banks
And we know why modern central banking was put in place in the early 20th c. as the lender of last resort. The purpose is to provide ultimate resilience to the financial system that lies at the heart of modern monetary production economy.
The larger issue, however, comes in a couple of decades when climate change threatens severe economic contraction, if not civilizational collapse and potentially a mass culling. The rage the oncoming electorate is going to be feeling at the derelict irresponsibility of previous generations that has left their mess to the coming generations will be off the charts.
ReplyDeletePractically speaking, there doesn't seem to be any way of dealing with this owing to political conditions, both domestic and international. And this is now pretty much baked in, even if there are no big wars or more pandemics.
“ And we know why modern central banking was put in place in the early 20th c. as the lender of last resort.”
ReplyDeletelol that’s not what they do… they create the crises by increasing reserve assets at the Depositories “to lend out,” and then DONT lend they get Congress to do an appropriation…
Bitcoin is a “utility coin” it is used for settlements globally … it is valuable for this reason…
It is anti nationalist you should support it…
iow from an anti nationalist perspective the best system would be fixed exchange rates at parity… 1 USD = 1 CNY = 1 EUR = 1 JPY etc
ReplyDeleteThen if you export to other nation and get paid in that unit, you just come back to your country and get your CB to exchange you out at 1:1 …
Then the decision just comes down to whether you want to send the goods or materials to the other nation or not… this is how it used to be done..,
This is what Bitcoin does in effect it’s the same coin in every nation…
The tech people are trying to get around the current systems of central banks run by Art degree morons who can’t even apply eighth grade algebra and think Accounting abstractions are REAL.. so they created this global utility coin…
With interest rates at zero (which is all these kids have ever known) everything can be done with net 30 or net 60 trade credit… don’t really need the banks to provide credit… all you need is a settlement system when you are at permanent ZIRP…
https://twitter.com/markets/status/1451508524224221187?s=21
ReplyDeleteIt is anti nationalist you should support it…
ReplyDeleteIf it had legs, I would be supporting it. On one hand, it's a utopian dream, and on the other it is a scam.
What I do support is an international system in which nations are currency sovereigns under actual democracy, you know, governance of, for and by the people, rather than an oligarchy, which is what a republic is because it was designed to be.
It is premature to support internationalism because it is now bourgeois internationalism controlled by the factions that hold status, wealth and power. The push for globalism is by global elites for global elites based on trickle down, which is what neoliberalism is.
The notion that Bitcoin is going to change this for the better is just delusional.
It’s only a scam if you keep pricing it in USD terms..
ReplyDeleteTech people are trying to ideally go around the USD system … and the other systems of CBs being administered by Art degree moron assholes…
Just try to discard your USD zombieism and look at it then …
ReplyDeleteIt’s like when the tech people created nuclear weapons and ended all the bloody conflicts…
ReplyDeleteSTEM people are at core “Problem solvers”…
Cullen has an interesting take on it ?
ReplyDeleteDid Bitcoin Kill Gold’s Monetary Utility?
https://www.pragcap.com/did-bitcoin-kill-golds-monetary-utility/
Or has Basel 3_effected the gold price ?