Looks like Trump going to start a crypto exchange and a USD stable coin… 🤔
.@WorldLibertyFi is helmed by @realdonaldtrump's sons, @EricTrump and @DonaldJTrumpJr and the 18-year-old Barron Trump is the project's "DeFi visionary.” https://t.co/PSKhQWyQKu
— CoinDesk (@CoinDesk) September 13, 2024
26 comments:
After Kamala wiped the floor with him in the "debate", it's time to look for new business ventures.
NYT has 99.7% Trump…
What's he aim to accomplish with this crypto fixation?
I think an effort to attract more young male voters.
What's he aim to accomplish with this crypto fixation?
Musk
https://www.forbes.com/sites/digital-assets/2024/03/15/to-the-moon-elon-musk-makes-dramatic-return-crypto-front-lines-amid-unprecedented-price-boom-thats-boosted-bitcoin-ethereum-xrp-solana-and-dogecoin/
Musk made Trump change his mind
He has quietly been acquiring money-transmitter licenses across the U.S. and has said it plans to "revolutionize" the payments system.
Just what happens when billionaires get together and rule the world and don't like paying tax. Show how little the pay when they become President.
Musk was saying he was giving all this money to the Trump campaign because of blah, blah, blah, blah.
He was giving money to his campaign to get this in return. As it is an Oligarchy.
You don't quietly buy money-transmitter licenses across the U.S if it is a no go. You buy them after bribing who you want to win the election on the agreement you get the green light of the candidate you bought wins.
Musk will announce what all this means in due course if Trump wins the election.
No way in hell would I do my banking with Elon Musk.
You sell a USD stable coin that does not pay interest, take the USD you receive for the coin and invest it dollar for dollar in US govt bonds and collect the interest on the bonds for yourself…. So if you sold $1B of your coins and put the $1B in 10 yr USTs right now you get 3.7% or $37M every year for ten years just to operate a blockchain system…
This is what the USDT people are doing last I heard they sold $65B of their coin they are making a fortune.,,
X Plans To Replace PayPal, Visa And Banks Quietly Accelerates.
https://www.forbes.com/sites/digital-assets/2024/01/16/elon-musk-reveals-surprise-crypto-holdings-as-x-plan-to-replace-paypal-visa-and-banks-quietly-accelerates-amid-bitcoin-price-swings/
BlackRock and Jamie Dimond is On board.
https://www.forbes.com/sites/digital-assets/2024/01/14/this-is-just-the-beginning--blackrock-ceo-reveals-massive-crypto-plan-after-etf-sparks-wild-bitcoin-and-ethereum-price-swings/
Trump will leave it them to implement and design. Just like he did with Rex Tillerson and Gary Cohen's energy dominance policy.
Art of the deal. Trump gets paid huge sums and those who paid the huge sums can basically do what they want.
That's why Black rock and the big banks are changing their minds on it Matt.
Always comes back to this ...
https://www.crisesnotes.com/the-night-they-reread-pozsar-in-his-absence/
The most important paper from Pozsar related to the issue of deposit insurance is a paper entitled
“Institutional Cash Pools and the Triffin Dilemma of the U.S. Banking System”.
First, some terminology. Pozsar uses the term “institutional cash pools” for those institutions, such as pension funds, university endowments, insurance companies or bank trust departments that invest large monetary sums in order to get a “sufficient” return. Typically, these entities have a fiduciary and/or trustee relationship to others, which provide legal parameters for how these assets should be managed. Economist Hyman Minsky used the phrase “money manager capitalism” for the same phenomenon. Some assessing this development have replaced references to “money” with “asset” i.e. “asset manager capitalism”. This is meant to reflect that only a small percentage of the assets institutional investors invest in are “money” or have a high degree of “moneyness”.
there are a wide set of institutions which manage literally trillions of dollars of assets. Just like you or I do, these institutions have to hold a certain amount of their funds in “cash”, in order to manage their investments and meet outflows. Deposit insurance caps are a problem for this wider network of institutions, because these caps are sized relative to most household “cash balance needs”. By contrast, they are almost laughably tiny compared to the monetary needs of these institutions. This “mismatch” is a gigantic problem. What the financial services part of the financial system ecosystem did ( and does) is create new financial products in an attempt to solve these problems- for a fee. In short, they invented new types of “money”.
Musk has always had this problem.
As the limits of slicing and spreading growing institutional cash pools in fixed, insured increments across a shrinking number of banks and against binding unsecured exposure limits were reached, institutional cash pools faced two alternatives:
(i) holding uninsured deposits and becoming uninsured, unsecured creditors to banks, or
(ii) investing in insured deposit alternatives—that is, safe, short-term and liquid instruments—such as short-term
(ii/a) government guaranteed instruments or
(ii/b) a range of privately guaranteed instruments (secured instruments and money funds) issued by the so-called “shadow” banking system.
With only a limited appetite for direct, unsecured exposures to banks through uninsured deposits, however, institutional cash pools opted for the second set of alternatives. Relative to the aggregate volume of institutional cash pools, however, there was an insufficient supply of short-term government-guaranteed instruments to serve as insured deposit alternatives [...[ With a shortage of short-term government-guaranteed instruments, institutional cash pools next gravitated—almost by default—toward the other alternative of privately guaranteed instruments.
What matters is that the key element of uninsured deposits is that they are “unsecured” i.e. not collateralized. This has two issues. On
1) you’re less protected against loss because you’re exposed to all of a bank’s potential losses, rather than simply the value of one asset (the collateral).
2) Worse, you have the threat of illiquidity. Even if you will ultimately be paid back, the time it takes the FDIC to fully dispose of the bank’s assets can potentially be quite long. In the meantime, you have a “receivership certificate” which, to say the least, is not an attractive asset to hold.
The attractive feature of secured claims- that is collateralized IOUs- is that in case of default you can sell the collateral- and typically quite quickly. Even the extreme case of taking the exact same loss with shadow money that you would have with uninsured deposits favors shadow money because you realize the loss quickly and have liquid funds on hand rather than an illiquid claim that will take- at the very least- months to resolve itself. At least, in theory.
This search for collateralized shadow monies to replace uncollateralized uninsured deposits is not some harmless, costless process. Indeed the very term shadow banking was coined by Paul McCulley in 2007 to describe a set of “non-bank” financial institutions which ultimately themselves experienced a run… A “shadow bank run”, if you will.
Recall that the thing that makes today’s shadow money valuable is that “even” in the case of default, and you can sell the underlying collateral quickly and easily. In other words, the collateral is safe and liquid. Just as losses (whether unrealized or realized) can cause a run by uninsured depositors, potential losses can cause a run by shadow money holders.
Remember 2007 and 2008? Remember a little instrument called a Mortgage-Backed Security? It should not surprise you to learn that these were one of the key forms of safe collateral which “collateralized” shadow money.
That there was a “shadow” bank run is one of the less discussed elements of the financial crisis in popular culture, it's a key element of the whole episode. It’s also important to understand that while loss fears triggered these runs, the key deadly element was the collapse of liquidity. Ultimately, the highest rated private mortgage backed securities (AAA) were the principal taken-as-safe collateral for these shadow monies.
AAA MBS securities ultimately took only a couple percentage points of losses on average. Collateralized Debt Obligations (CDOs) are a different instrument entirely.
The point is that ultimately, even the extreme and fraudulent activities which emerged during the 2000s housing boom were not enough to create losses in the safest portion (or tranche) of Mortgage Backed Securities. In this sense, the financial engineering actually worked. The problem was all the financial byproducts (the lower- especially the lowest- tranches) and the inappropriate further use of these financial engineering tools.
Where the financial engineering completely failed is in creating an asset that truly had the liquidity of government securities. The losses may have ultimately been small, but there was no way to know that in the moment. That fear made these assets illiquid.
You might even remember the terminology that emerged at the time to describe this: toxic assets. What the public did not understand at the time is that while fear of losses may have made them toxic, the real issue of toxicity was “liquidity”. The shadow banking system had collapsed as a result of runs which meant the multi-trillion dollar system which financed them no longer existed. The only possible solution was the chartered banking system directly financing the holding of AAA mortgage-backed securities (which it was in no position to do) or else the government stepping in. The money creation process which generated liquidity in these securities markets collapsed and only government balance sheets- i.e. government money creation- could fill the void. You know the rest of the story from here.
The larger issue Zoltan Pozsar is highlighting in this paper is that when you look beyond narrow measures of “the money supply”, deposit insurance is providing less and less protection as these financial net worth pools grow and grow. He says this outright in the paper:
" Indeed, if institutional cash pools continue to rely on banks as their credit and liquidity put providers of last resort, the secular rise of uninsured institutional cash pools relative to the size of insured deposits is going to make the U.S. financial system increasingly run-prone, not unlike it used to be prior to the creation of the Federal Reserve and the FDIC. Put another way, the secular rise of cash pools reduces the effectiveness of deposit insurance in promoting system-stability, if depository institutions are wired to serve as insurers of last resort for the world’s uninsured dollar liquidity"
Pozsar himself proposes various incremental policy reforms which would limit these issues. He does not suggest getting rid of the deposit insurance cap himself.
Rereading Pozsar illustrates that the “sophisticated cash management” which has been invoked to criticize “unsophisticated” uninsured depositors has a downside. Shadow bank runs are no better than bank runs. Indeed, in some ways they are worse because shadow banks don’t have direct discount window access. When 13(3) is invoked to effectively give them discount window access, they get the benefits of banking powers without the costs (bank regulation). In this sense, I salute “unsophisticated” uninsured depositors. They have been an unheralded defender of financial stability. We don’t need shadow banking to expand further.
None of it is about careful monitoring of balance sheets and credit risks because these “financial net worth pools” do not have the benefits of deposit insurance. Instead, this piece has mostly been about collateral. In some fundamental sense, institutional investors want collateral because they don’t want to do careful credit monitoring. The dream of “market discipline” crashes against a wave of financial engineering in the real world.
This is what Crypto has always been about in my view.
ideally creditors would like to replace creditworthiness with collateralworthiness.
Leaning completely on collateral is the opposite of careful monitoring of balance sheets. Asset managers seek out being “fully collateralized” precisely to limit the number of actors whose default uncertainties (and overall credit worthiness) they have to assess.
This is clearest in the case of the latest innovation in shadow money- “cash sweep” programs.
Use financial technology to take your large uninsured deposit and break it up into literally hundreds of insured deposits at various banks. If every uninsured depositor used cash sweep type programs, then there would be no “market discipline” i.e. uninsured depositors monitoring bank balance sheets.
Uninsured depositors monitoring bank balance sheets. This would be functionally the same as uncapped deposit insurance, except formally uninsured depositors would pay a fee for that service upfront. Under full deposit insurance, banks would instead have lower interest rates on deposits or find some other mechanism to “recoup costs”.
These “brokered deposits” products essentially transform uninsured deposits into shadow monies. These shadow monies simply have the unique feature that they emerge from within the banking subsidiary, and the collateral is insured deposits themselves.
This is a kind of reductio ad absurdum of shadow money which shows that shying away from eliminating deposit insurance won’t provide “liability side discipline”, it will just generate more shadow banking system instability. At best, these “cash sweep” innovations (and other similar devices) will effectively create a consumer unfriendly version of unlimited deposit insurance. The difference will be that the pressure for corresponding asset side regulation will dissipate in a fog of complexity.
With all these millionaires and Billionaires the Oligarchy has created the problem they face is where can they store their savings safely ?
Wall street doesn't want to eliminate the cap on deposit insurance. So we end up with a merry go round of madness and tweets like that from Trump.
As they try to come up with a myriad of ways to horde their rent seeking wealth safely.
Musk framed it this way..
"You know what, dogecoin is the people's crypto, I'll support it," Musk claims he said, recounting a similar experience at his rocket company SpaceX. "Lots of rich people are supporting bitcoin but if people [working in factories] want me to support dogecoin, I will. Dogecoin is for the workers"
When he toured a Tesla factory and was asked by workers to endorse dogecoin.
His Twitter followers fell for that bull shit and his fairy tales.
It has absolutely nothing to do with workers and the working class it is the complete opposite.
Like saying get rid of social security to help pensioners.
It is all for the Oligarchy and always was.
Rip the bandaid off, eliminate the cap on deposit insurance and let’s have the real policy debate.
The best book ever written on the Subject
Moral Economies of Money: Politics and the Monetary Constitution of Society by Jakob Feinig
Which describes the US monetary system from the very first settler foot landing on American shores right up to today.
Shows history is just repeating itself.
Crypto Bro's are just the very same working class idiots as the working class gold standard supporters hundreds of years ago. How the Oligarchy at the time defeated the idea of a bank of the people. By controlling the information space and brainwashing workers to support the gold standard.
Easily manipulated to believe those that support crypto are doing it for them. How the gold bugs won and defeated the bank of the people faction way back then.
https://moneyontheleft.org/2023/04/05/bank-of-the-people-history-for-moneys-future/
What I love about the book Moral Economies of Money: Politics and the Monetary Constitution of Society.
Is that it uses actual newspaper clippings from 200 years ago to highlight the propaganda at the time.To convince the workers the gold standard was for them.
No different to today just reframed and dusted off for modern times. Crypto bro's fall for it hook line and sinker just as the settlers did back then.
Destroy an economy and money is worthless. Do the .1% not realize that?
The Chaos of Canadian Colonial Money
Money in colonial British North America was a mess. And the colonies were in a tight spot trying to fix it. The law generally forbid colonies from issuing their own money, either through establishing their own mints or issuing bills of credit. Further, as of the 1820s, the British government required that all colonial accounts be denominated in sterling. All the while, continuous growth and a trade balance favoring England constantly tapped the money supply, leading to near constant calls for more liquidity.
That's how America set up the EU. Controlling the information space convinced the inhabitants the Euro was a good idea. They did to the Europeans what the British did to the colonies.
The colonies responded to this with legislative ingenuity. With jurisdiction over their own revenue and courts, they would declare coinage of various nations “current” within their borders, meaning that such designated coins would both satisfy debts to the colony and count as legal tender. They would then “rate” those varieties of coin under their own unit of account – granting each a domestic value that differed from (and typically exceeded) either its face value or what value it would acquire in foreign markets. While the official unit of account was English, many goods were priced in dollars, and most actual coins in people’s pockets were Spanish. This process, known as “overrating” coinage, fomented a currency mélange throughout the colonies that immensely complicated even basic everyday transactions.
Still, the colonies enjoyed a brief reprieve from this complexity during the war of 1812. To fund that conflict, the British forces issued legal-tender “Army Bills” directly to soldiers and suppliers.
These bills not only serviced the war effort but also were widely adopted and appreciated by the settler population at large. Typically denominated in both dollars and pounds, they greatly simplified everyday exchange, offering settlers a paper currency that was, more or less, worth the value listed on its face. Significantly, the bills were issued in good supply, reaching a peak of £1.5 million in 1814. The result granted the colonies a level of liquidity they would not know again until for decades. Exposed to their first paper money in good supply, the colonists thus experienced previously unparalleled liquidity through public money–even if a money, of course, issued for military conflict.
In spite of such achievements, the British fully redeemed the Army Bills after the war. Retiring the bills led to a deep and profound monetary contraction. And it was this specific moment that directly inspired the chartering of Canada’s earliest banks. First was the Bank of Montreal in 1817, followed by the Bank of Quebec in 1818, the Bank of Upper Canada at Kingston in 1819, the Bank of New Brunswick in 1820, and, as will be discussed below, the Bank of Upper Canada founded in the town of York (later incorporated as Toronto) in 1821.
The first Canadian banks were universally run by wealthy, politically connected and conservative individuals, often with direct ties to England.
They were chartered to offer a public service. They could store varieties of legal tender coinage and issue notes that, like the Army Bills, listed their value on their face. While not legal tender, these banknotes could thereby replace legal tender coin for much everyday exchange. Banks could additionally issue more notes than the amount of coin they kept in reserve, thereby directly increasing the money supply for the still liquidity-starved colonies. Thus while certainly commercial enterprises driven by private profits and interests, the early Canadian banks (as with many chartered corporations at that time) were not merely commercial institutions, but expressly political ones. They were individually chartered and empowered by statute, run by politically-connected colonial elites, and specifically charged with a public service in simplifying and augmenting the money supply.
Crucially, such elite banks “of issue, discount and deposit” were not primarily held out as savings institutions or mere intermediaries, but money issuers. Generally, they built their reserve of specie by selling shares rather than attracting depositors, and their primary purpose was to clean up the colonial money supply and expand monetary circulation. Banknotes almost immediately became the predominant currency for everyday use in the colonies.
Where government had receded, government-supported for-profit enterprises were called in. But private bank money came with very new terms. Whereas Army Bills offered payment to individuals, banknotes were issued through loans, meaning that they came at a cost and with a commitment. To many, this new money felt less a monetary expansion, than a shift of obligations – away from the state and towards these new, undemocratic corporations.
Sound familiar ?
When you read every conservative and Republican manifesto today. As their ideology is always to replace government spending with bank lending. So the banks get to allocate skills and real resources as a bunch of unelected technocrats.
In Toronto and much of Upper Canada, nearly all banknotes were issued by one especially partisan institution, the Bank of Upper Canada. The first chartered bank in the Canadian colonies, the Bank of Upper Canada was founded by Anglican archdeacon John Strachan and his followers in the “Family Compact” – a close-knit conservative political faction that wielded an outsized influence in the colony. Indeed, the bank inscribed its ruling position directly on its notes. The notes proudly announced that the bank was “chartered by parliament.” They bore images of St. George and Britannia, unabashedly mimicking iconography from the Bank of England.
While it never took on exactly the role that ‘The Old Lady’ played in England, the Bank of Upper Canada was explicitly established to represent elite interests and, for a considerable period, it was the only bank chartered in the region. During that period, anyone who needed money would have to either borrow from that bank (in which case they owed it a debt) or work for someone who had previously borrowed from that institution. In either case, money was issued in Upper Canada with lines of obligation running directly to a single, unapologetically anti-egalitarian institution.
This bank’s anti-egalitarian activities were particularly egregious to Upper Canada’s “Reformers” – a political movement directly opposed to the Family Compact that advocated to make the colonial government more responsive to the electorate. To Reformers, banking institutions like the Bank of Upper Canada benefitted from public legitimacy and support, but lacked democratic accountability. If banks were in a fundamental sense government agents, then their control was a political cause. The interest on their loans, furthermore, was akin to taxation, only not paid into public coffers. With this, banking reform became a central plank in the Reform movement.
Sound familiar ?
Of course it does the constant battle between left and right today.
Of course how conservative England controls Scotland. Using all the old techniques of enslavement above. Via the money supply.
The Reformers began by attempting to make the Bank of Upper Canada more accountable, and then by proposing alternate public monetary bodies. Failing in this, a group of Reformers then established their own (unchartered) institution in 1835 named the “Bank of the People.” As with the Bank of Upper Canada, the Bank of the People was erected overtly as a political institution. Its board was made up exclusively of established Reformers, and the bank issued money largely to communities excluded by the Bank of Upper Canada. (Indeed, one of its first loans was to future leader of the Upper Canada Rebellion, William Lyon Mackenzie, to establish his newspaper, the Constitution.) In house, too, the bank joined the politics of credit issuance to the politics of publicity by hosting a newsroom on its premises featuring “the leading liberal Journals.”
Bank of the People notes differed starkly from the Bank of Upper Canada’s, reflecting the different political community to which the bank spoke and the alternative values it sought to express. In the place of British monarchial imagery, its notes feature bustling cityscapes and ports, alongside generic symbols of industry, such as Vulcan and Demeter.
Of course what I strongly believe what Scotland should do and just start issuing our own tax credits.
Of course if it is mentioned the propaganda books of 200 years ago in North America are dusted off and thrown at the Scots today. Via the information space the rulers of the Scots own.
Despite its judicious management, the Bank of the People did not last long. We know it was well run, because it managed to be both profitable and to be the only bank in British North America to not suspend payments during the banking panic of 1837. Still, the Bank lost many of its supporters after the failed Upper Canada Rebellion, and competition with the Bank of Upper Canada led its founders to sell to the Bank of Montreal in 1840.
The monetary system that the Bank of the People actively contested is now the norm, but, all the while, its public nature has become less visible to us. Revisiting such democratizing efforts reminds us of the indelibly public role that banks play, and that they were intended to play, since their very introduction into North America. The Reformers movement equally reminds us that monetary systems that appear resistant to change, may yet be subject to contestation. Faced with the legal inability to make the existing monetary order more accountable, the Reformers turned to establishing their own institution. While short-lived and little-known today, the Bank’s example and influence lived on through its participants to influence Canada’s future monetary order. Similarly, today, current public banking efforts (in, for example, California, New York, Massachusetts, & Pennsylvania) remind us that, regardless of how hard it might be to see at times, there is always the possibility of alternatives to elite, private, and for-profit means of issuing money. Times like this, looking to the past may help us to more clearly see our present, and to imagine our future.
MMT'rs are the reformers of today.
It is incredible to me how Conservatives still have so much power over the monetary system 200 years later. That workers keep voting for them. Shows the importance of controlling the information space. How conservatives have always been the face of the Oligarchy.
It is laughable that the libertarian gold bugs think going back to the gold standard is the answer. Their ancestors would be spinning in their graves.
By controlling the information space you can turn history on its head and get idiots to fight determinedly and bitterly against their own interests while pushing oligarchy objectives.
Trump is the William Douglas of today.
https://moneyontheleft.org/2019/09/13/money-politics-before-the-new-deal-with-jakob-feinig/
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