I strongly believe that money itself has been corrupted lately, this then causes all number of bad flow on effects to happen. A massive shift happened when central banks started getting involved in direct purchases of various asset types and we started to see a major distortion happen in monetary policy that which has distorted the functioning of money itself. For example who would care if their business is completely unprofitable if it could get access to freshly printed money every quarter to prop it up. What then happens to all the other businesses who don't get access to that freshly created money? When we have situations like the BoJ owning more than 60% of the Nikkei 225 we really ought to be asking some serious questions about if we really have free markets? We also should be asking some questions about the properties we desire in money itself. If a central monetary agency can go about unconventional monetary policy such as purchasing equities we can quickly have a situation whereby an unelected group of bureaucrats can damages the ability of money to be used as a means to convey information. Further there's questions about picking winners and losers that comes up there too. As a whole I think people need to ask what money is again and have some serious conversations about what money and the monetary system should be. It seems that these difficult questions really fell out of favor a while ago and as a result things have been drifting in a direction that many people aren't comfortable with.
If we don't ask these questions then technological approaches to money, like various cryptocurrencies and other financial technologies are unlikely to actually cause long lasting improvements. We have some serious monetary policy problems in the world right now and while some tech could help (in some cases) these aren't primarily technological problems.
You're merely documenting how current regulations are inefficient at catching current abuses. With proper regulations, these kind of abuses could be mostly prevented. With anti-regulation sentiment permeating government and politics right now, this becomes much, much more difficult. People will use the failure of antiquated regulations that need to be updated as justification for removing or kneecapping them, because "clearly they don't work anyway".
All systems trend towards chaos eventually. The answer is always more or better regulation. Sometimes better means more, sometimes better means "take these 50 regulations, get rid of them, and replace them with one simple one that gives you better outcomes". We don't want a rulebook so large no one could ever read all of it (we already have that). We don't want the complexity of the regulations to spiral out of control along with the system -- regulations need to be adapted over time to handle the current (and near future) complexity of the system. And we don't want no regulations -- then the system itself will spiral out of control.
The whole idea of legal precedents works against this too -- the logic is inverted --- instead of constantly coming up with new takes and new rules to govern old and current situations, we hark back to a decision someone made 50 years ago and we say "this is set in stone", when we should be constantly updating and modifying those precedents to better fit the current state of the system. Eventually new laws get passed, but the judicial system itself is largely a damper on progress in this regard, dragging us into the past and making changes that could take 5 years take 50 years. We see this reflected in our astounding incarceration rate, and a number of other areas.
The pace of technological and societal evolution has grown to be much faster than the pace at which we upgrade our regulations. We are speeding towards a brick wall.
Anti-regulation != anti-government. I am okay with regulation and being regulated, but I absolutely am not okay with any of our existing governments having any part of that process. Revolution does not require anarchy as an outcome; indeed, my preference simply would be to install better governance.
Turning the law into a set of constantly shift sands would make it impossible to do business, because that could end up rivaling anarchy. Risks can be taken only when the consequences can be predicted in advance. Without precedents, every single legal case would turn into a gamble. Only fools and the insane would ever stick their necks out; not far from where we are now, I suppose.
I've been reading about the philosophy of Law, and how other cultures deal with legal codes. One of the most intriguing takeaways was critically examining our own system and just how verbose it is. American (and just about all Western Legal Codes) are extremely detailed and contain tons of clauses that are explicitly enumerated.
Whereas an older society might have a law as simple as "Do not break into other people's houses", we will have dozens of codes defining what constitutes breaking and entering, determining what kind of property was being broken into, the scale of theft, whether or not there was intent, and more. And, there are sentencing differences depending on what kind of tools the burglar was carrying, if at all. To me, now that I've seen how other cultures handle law, this is complexity overkill.
We don't seem to be comfortable with "common sense" laws because they are considered too vague. But the alternative is a really dense legal code you have to be professionally trained to understand, and one that is so complicated that offenders can avoid prosecution based on dozens of technicalities.
One thing I've been thinking about lately is that human behavior is inherently complicated and because legal systems need to account for human behavior there's no getting around the introduction of complexity into the system. There's just a question of where that complexity lives.
Here in the US, we have three branches of government: legislative, executive, and judicial. One way we could deal with complexity is at the legislative level by writing extremely specific laws. So in your example the legal code expressly spells out in detail what constitutes breaking and entering, exceptions, etc.
Another way to deal with that complexity would be for the legislative branch to write a fairly broad set of laws and grant the executive branch power to write detailed regulations. So from that you end up with administrative agencies that write very detailed regulations, which, while not quite "laws" (since they weren't written by the legislature), nevertheless function in a similar way.
A third way would be at the judicial level. If the laws are fairly broad and there is no specific regulations, then edge cases end up in court and judges make the decision. So over time there ends up being a large body of case law that handles all the edge cases (or at least, all the edge cases that have been explored so far).
So there's really no way around it. You can put your complexity in the legal code itself, in administrative rule making, or case law, or some combination of all three. There are probably advantages and disadvantages to the different choices, but I don't think simplicity is an option.
Right, but society has accelerated. 50 and 100 year precedents used to make sense. Now it seems like they need to be updated at least every 10 years, because that's how long it takes for society to fundamentally change at the current rate of progress.
Regarding government, if you don't like your current government, then if you think hard about it, what you really want is either 1) additional regulations or restructurings that prevent the government from having the bad traits it currently has, or 2) the removal of existing regulations that are preventing the government from being better in your eyes.
If your statement is "I don't like the current state of the government" then you are simply for transforming it into something you do like. This can be done through a regulatory framework.
If you don't trust the government as it is, then you are one more voter for regulating X, Y and Z such that you do trust the government.
There is also a cultural element though. The laws and regulations may encourage corrupt behaviour, but if there was a strong cultural expectation that the most upstanding people go into government to serve their communities - and if that were actually who was attracted to the role - that wouldn't matter all that much.
I'm trying to encourage a discussion about what money itself should be. I think without this discussion it will be very hard to make effective regulations around money and the implications this has on the operations of the banking system. Once people are more informed about these topics better regulation will be possible. Frankly I don't see people talk about the fundamentals of money much, the current monetary system is convenient enough for most people such that they don't have to think about the details of how it works in their day to day lives.
What money is in what sense though? In a centralized/decentralized sense? In a philosophical sense? Are we considering going back to bartering?
My point is, you see companies abusing bailouts and say "oh no, our fundamental concept of money is changing because bailouts". I see that same situation and say "oh no, our regulations are so antiquated that they are 50 years behind in terms of the abuses they are able to prevent, we need to update our regulations and create new ones, and create a framework for rapidly adjusting regulations going forward, because the current rate is untenable."
This problem extends well beyond money and touches every area of society. Society and technology are evolving faster than the legal frameworks that supposedly govern them. Limiting the scope of the discussion to just cover money would do just that, limit the scope of what should be a much wider discussion.
> But this is exactly the "we need fewer regulations" approach, implemented sanely.
The problem is that people conflate "fewer regulations" with "less regulation".
We certainly need fewer regulations (there are too many and they are too complex). But we need more regulation (too much falls outside of the current regulations' scope).
Both aspects of the status quo seem to be a result of regulatory capture by concentrations of capital and power.
Specifically, we need more regulatory coverage coming from a fewer number of regulations. That is the guiding star. More restrictions, more elegant / simpler rules / fewer actual rules.
It’s always refreshing to see a fellow skeptic of legal precedent in the wild. The precedent set by making the just ruling in one specific case may set up far greater injustices in the future.
I'm not sure why you'd take from this that I'm ignoring the role of regulation when I'm commenting on a situation whereby the regulatory framework of central banks allows them to take actions that damage the signaling power of pricing. I most definitely think that banks and central banks must be carefully regulated because they have the special privilege of creating money and with this comes a lot of responsibility.
The other part though is that if money is corrupted it impacts the process of regulation itself. For example creating good regulation to tax companies is made far more difficult when there's fundamental differences between the nature of the money that those companies themselves have access to. I'm sure it would be possible with a large amount of effort to have regulations with non-fungible money but there's challenges there that would be substantially difficult to address and the complexity of that regulation would come with it's own non-zero costs to society.
In simpler terms, for any complaint you come up with, here's a regulation to fix it. Problem solved.
If the problem is a regulation, let's remove or modify that regulation. Problem solved.
If your problem is there are too many regulations, let's get rid of 20 of them and simplify down to just this one. Problem solved.
Oh, that simplification created its own problems? Let's create new regulations covering those three scenarios. Problem solved.
But if we are much slower at creating regulations than we are at creating new situations that require regulation, it creates the perception that regulations don't work, which leads to rapid de-regulation of everything. Our current legal and political framework simply wasn't designed for this. It was designed for 13 small colonies writing paper letters back and forth, where waiting 3 months for a court to make a decision or 1+ years for congress to pass a bill was considered quite timely and fine. We now live in a society where there is probably a need for 2-3 new regulations per day, and 1-2 adjustments to existing regulations, per day, and an AI chat bot that will tell you whether something is legal based on current regulations.
> As a whole I think people need to ask what money is again and have some serious conversations about what money and the monetary system should be.
Money is not some concrete thing that has some inherent value. It's never been that. It's always been a promise, an abstract thing backed by collective trust.
Fractional reserve banking was not a coup d'etat of an elite few performed to disenfranchise the 99% in order to ballast the 1%. It was a considered decision by rational actors and was necessary to enable economic growth since its introduction.
In many ways it's wonderful that the current generation is questioning the old ways of doing things. This is how progress is made. I'm down. But money, government, everything which is the product of historical trial-and-error is a Chesterson's Fence: you really do need to understand why it's there before you try to rip it out and replace it with something else. And it's just so clear to me that basically nobody trying to replace fiat currency with crypto or whatever actually understands why fiat came to be.
It would seem that the temptation to set the price of everything is increased when there are impediments to setting the interest rate (since this removes an important monetary policy lever). I think this has been seen lately as the zero-lower-bound on nominal interest rates has started to come into play in many places.
> As a whole I think people need to ask what money is again and have some serious conversations about what money and the monetary system should be.
Yes! This is an incredibly important conversation and this conversation is already happening. You see MMT becoming mainstream. Because MMT is a description of how money works today. That it's a technology (and always has been) for governments to provision themselves.
In fact, I doubt you would have had the stimulus package we had with COVID without that conversation. And it helped millions of people. It also had the unfortunate side affect of growing inequality. We also have the euro, which is, in my opinion a bad implementation of money (central bank without democratic oversight). And of course bitcoin based on the idea of hard currency economics.
One discussion I don't see at the moment is a vision for society without money. That's a discussion the communists had over 150 years ago. It's a serious question because money IS a technology. Is the telephone the best communication technology? No, we moved on from the telephone. We should be asking the same thing about money. Because money is a technology designed around organizing economic activity. But is it the best technology?
Example, the value that money represents is a single value. But why is it a scalar and not a vector? For example, why isn't everything priced with a value and a carbon cost? That would make prices vectors instead of scalars. In fact people value things across many dimensions and have to come up with a price, a single value. Imagine playing a video game where, instead of 3d vectors, everything is represented as the length of the vector. That's a lot of information that is just thrown away.
In fact, markets have a known flaw called externalities. This flaw is created partly from the fact that value is a scalar. This flaw is so severe that major pollution has been created by economic activity (global warming, ozone, etc) that risks all life on this planet.
People need to have imagination if we are going to survive as a species.
> Example, the value that money represents is a single value. But why is it a scalar and not a vector? For example, why isn't everything priced with a value and a carbon cost? That would make prices vectors instead of scalars. In fact people value things across many dimensions and have to come up with a price, a single value. Imagine playing a video game where, instead of 3d vectors, everything is represented as the length of the vector. That's a lot of information that is just thrown away.
The whole value of monetary prices is that they're fungible - rather than having to compare the value of things in x different dimensions, you reduce everything to that scalar concept of value.
> In fact, markets have a known flaw called externalities. This flaw is created partly from the fact that value is a scalar. This flaw is so severe that major pollution has been created by economic activity (global warming, ozone, etc) that risks all life on this planet.
On the contrary, having value be a scalar is the solution, because it allows us to make tradeoffs between value and pollution. Cap and trade works (it worked for acid rain); the missing part is the will to actually do it.
All that said, you might be interested in China's "social credit" system - that's the main example I know of this concept of "vector value", because it exists to impose a standard of behaviour on individuals that's not tradeable and fungible.
There are glints, Rainbow Gatherings, for example, are small transitory communities that function entirely without money. There are "intentional communities" that operate (in various ways) without money (althoug usually not without some formal accounting?) And things like Ithaca Hours, a "local currency".
> the value that money represents is a single value. But why is it a scalar and not a vector? For example, why isn't everything priced with a value and a carbon cost? That would make prices vectors instead of scalars
Suppose for the sake of the argument that the main countries making up the world economy agree to re-price everything in terms of length 2 vectors (standard_cost, carbon_cost). The former element is measured in units of USD say, and the latter is measured in units of kg CO_2(e), say.
Suppose I go to shopping to buy a new CPU. Vendor A offers CPU_A for ($200, 15 kg CO_2(e)) while vendor B offers an equivalent product CPU_B for ($198, 50 kg CO_2(e)).
In the current economy, where externalities of global warming caused by market participants are not priced or regulated, I will purchase CPU_B, as it costs me $198, and I save $2 . I choose the product with the additional CO_2(e) footprint of (50 - 15) = 35 kg CO_2(e). The negative impact of that additional 35 kg CO_2(e) pollution is amortized over 8 billion humans [1], so everyone in the world pays the price of an additional 35 kg CO_2(e) / 8 billion = 4.375e-7 grams CO_2(e) per person. Myself as the end-user and the counterparties in the transaction (merchant, distributor, manufacturer, suppliers, etc) get to share in the value generated from the transaction, but most of the 8 billion people in the world do not get a cut of the value or utility, they only pay the cost.
As well as making the prices vectors, it would be necessary to add some other kind of limited resource into the vector-money economy, to constrain individuals from making decisions with large carbon pollution externalities, otherwise we're back to the same situation where we started, but with a lot more bookkeeping that nearly everyone will ignore.
One way to do this could be introduce regulation for a greenhouse gas pollution rationing system: for argument's sake, suppose we allocate each of the 8 billion people in the world an equal quota of kg CO_2(e) / year pollution they are permitted to emit [2]. Suppose there's roughly 40 gigatons of CO_2(e) pollution per year, and roughly 8 billion people in the world. That gives a quota of 5000 tons of CO_2(e) pollution allowance per year per person. Assuming humanity manages to hold the rate of carbon emissions steady and hold population steady, that gives a quota of 5000 kg CO_2(e) per person per year. Each time you purchase a good or a service, the carbon cost is deducted from your personal carbon budget. For efficiency, suppose we also allow carbon quotas to be traded between market participants. Now we have a carbon market where people exchange $ for CO_2(e) carbon emission allowance.
Now, arguably, we can go back to having scalar prices: Instead of the price of CPU_A being the vector ($200, 15 kg CO_2(e)), it can be the scalar $200 + carbon_price * 15 kg_CO_2(e) . Similarly for CPU_B .
If we assume a carbon price of around $200 / ton of CO_2(e) , as has been proposed in Canada for ~ 2030, that gives prices of $200 + 15 kg * $ 0.2 / kg = $203 for CPU_A , and a $198 + 50 kg * $0.2 / kg = $208 for CPU_B . So as a selfish individual trying to make choices that are good for me, now I am incentivised to pick CPU_B , which is also (relatively) a better choice for the rest of society.
[1] conservative working assumption that the current generation of 8 billion humans is the last generation, and no new humans are born. if we assume future generations, then there's even more humans to amortize the cost of pollution over.
[2] in the real world, not everyone is going to get an equal carbon quota. we don't have a world-scale regulator able to regulate a world scale problem. as has been demonstrated throughout human history, individuals and groups with more power will use that power to wrangle a better deal for themselves at the expense of others. we're not all in it together, even if it is a problem with a global pollution sink becoming full. e.g. i am an australian, in our country we have a per-capita carbon footprint of around 21,000 kg / CO_2(e) per person per capita. That's over four times higher than the pollution per-capita if everyone in the world polluted an equal amount. No domestic politician is going to get elected running on a platform of "unilaterally reduce everyone's carbon footprint by 75%" - the stakeholders who would benefit most from that are the 99.6% of humanity who live in other countries, and they aren't allowed to vote in Australian domestic elections. Dear reader, if you have read to the end of this rant, please lobby your government to put tariffs on your trading partners until they introduce carbon taxes -- particular us in australia.
Would this vector stop at length two? How about other "nudge" worthy metrics? See existing cross-border tariffs for a long list of physical properties which influence tariffs for a perceived and often disputed, social objective.
> Would this vector stop at length two? How about other "nudge" worthy metrics?
that's a good point. there's definitely other societal goals that can be nudged toward through prices.
but on another hand, i'm not sure thinking about prices as vectors is that helpful. to change behaviour a regulator needs a way to internalise the external costs into prices, or some equivalent mechanism, and some enforcement mechanism for non-compliance.
but if you have all that, it isn't clear what use price vectors are. and if you only had price vectors but the extra components weren't reflected in the price, with no enforcement mechanism, then they won't change behaviour.
> A massive shift happened when central banks started getting involved in direct purchases of various asset types and we started to see a major distortion happen in monetary policy that which has distorted the functioning of money itself.
Historically, Western democratic states owned a significant amount of assets as measured as a percent of national income - it was only in the period 1970-2008 that the value of total state-owned assets shrunk to near-zero (or even became negative in some cases). So the large increases in value of states' balance sheets (and corresponding impacts) is not at all unusual. That being said, you're correct to point out that Central Banks heading these trends is a little concerning, mostly because it basically represents democracy outsourcing these important decisions to unelected bureaucrats.
I think there's a massive difference between the government owning things and the central bank owning things for the reasons you mention about accountability.
Exactly. I watched read about 2009 watched the Big Short and watched all these USELESS tech companies thrive on empty promises and venture caps where rich people are basically playing the lottery.
The financial system captured our society a while ago.
I really don’t get why so many smart people come up with every possible theoretical solution and yet they fail to observe that Bitcoin was engineered to solve this exact problem
Bitcoin had design goals in mind to avoid certain downsides of centralized currencies. The cryptocurrency space however lives inside the broader economy and questions about what money is and the regulations around it don't go away just because a specific cryptocurrency thought about some of these aspects in it's design. Even if bitcoin were to solve everyone's problems as some maximalists would claim how do we even implement this? Considering much of the world doesn't have holdings in bitcoin what are we to do? Similarly what do we do about people who don't have the infrastructure to run full nodes? What about dealing with interference with using the cryptocurrency imposed by external actors?
There's good reasons why people discuss these ideas, bitcoin, much like anything else is just part of the direction things can go in and it doesn't exist in isolation from the rest of the world.
Assuming bitcoin fixes this like the maximalists claim, the way forward is to continue educating people on bitcoin and more importantly what’s wrong with the current monetary system. Way too many people buy into the narrative of bitcoin being harmful for the environment and being an outdated technology (“Blockchain, not bitcoin!”).
Much of the world doesn’t own bitcoin but as long as you have a mobile phone and an internet connection, there’s a way to buy some. The technology’s been working for 12 years now and it can scale just fine, no need to tamper with anything. People don’t need to run full nodes, it’s already decentralized enough. I have one running off a raspberry pi and a 1TB hard drive, but it’s just because I want to and not because I think the additional node is needed for the network. Bitcoin is resilient against external actors by design, maximum decentralization and security. Remember when China finally cracked down on all bitcoin mining in May? The hashrate has recovered by now and China lost almost all of its 50% foothold on global bitcoin mining. The rest of the world’s bitcoin miners thanks China for its contribution.
It seems to me like Bitcoin is dismissed too easily by people who haven’t done enough unbiased research on it. For me, it’s not so much that Bitcoin is such an awesome invention and everyone should worship it like a cult. My question is what happens after fiat currencies collapse? Every single government backed currency has collapsed from hyperinflation in the past, and there’s still a good number of countries with hyper inflating currencies today. Historically, after chaos and war, some people’s debts are flushed away at the expense of everyone else and a new currency is issued by the affected jurisdiction. Do we just want to repeat that cycle when the USD collapses? I think that a free market currency that cannot be controlled by any organization (including governments) deserves more limelight.
I have to say I thought the most ridiculous name I'd see in this space was coins named after people's dogs. This not-even-a-name might be even more ridiculous. It reminds me of those spam emails where they the writing forms an effective filter on the people who reply, the idea being that they are so ludicrous that only a sucker would reply (hence saving the time of the scammers on interacting with people who reply but won't fall for the scam). I have to say I'm super sick of all the bullshit happening in the crypto space at the moment because I think it really tarnishes the reputation of everything in the space including some decentralized apps and decentralized finance stuff that could actually be a massive net positive to everyone.
At this point inflation (if it happens) will most likely be a policy driven affair since growth doesn't seem to be the main driver for monetary expansion at this moment in time. I think there's reasons this could happen with debt to GDP at such historical high levels the only way out of this is to inflate the debt away or to have debt defaults.
To me this is exactly right. Demand isn't what's going to drive inflation, demand strength is still running on fumes from the previous fiscal bazooka. What will drive inflation will be the inevitably monstrous fiscal response to whatever the next catastrophe is where rates start near zero and the Fed balance sheet is already enormous.
I think we have basically seen the peak of inflation for this short term iteration but absolutely have not seen the last of it for this decade.
If anything the lack of demand could be the impetus for the coming stimulus and therefore inflation.
I think the stimulus feedback loop you mention is exactly the situation that could provoke strong inflation. Were the markets free of this intervention/interference I'd be strongly in the deflationary camp because fundamentals worldwide are not good at all. But that's the bothersome thing, since the repo crisis of 2019 I've not been bullish on fundamentals but yet asset prices just keep inflating regardless. The pullback in 2020 being the shortest bear market I've ever seen followed by all time highs is what changed my mind on the potential of inflation, before that point I just didn't see it as possible at all given the weak global fundamentals. But yet there we say a situation where fundamentals were terrible but the market rebounded so fast. The upside-down stimulus driven market where bad news implies more stimulus implies higher asset prices could turn what would traditionally have been a strongly a deflationary situation into one where inflation occurs via rampant monetization and fiscal/monetary interventions. The question I keep asking is if the interventions can outpace the deflationary fundamentals? The introduction of Central Bank Digital Currencies would be a major change if for no other reason than they allow more monetary interventions to be done faster and more directly than before.
I think reducing the harms that are done by trolls and various other bad actors on the internet is an important question for this era. But this might not be the main motivation behind these new proposals. One of the most concerning parts of this is that the rules around what trolling is and who gets to determine who is a troll have not been a prominent part of the discussion. There's important recent political context here that international readers may be missing, the current federal government campaigned at the last election with a promise to introduce a independent federal anti-corruption commission but in recent times has completely backflipped on this (https://www.smh.com.au/politics/federal/morrison-must-honour...). Australia's mass media ownership is remarkably centralized with Murdoch owning an extremely high percentage of the print media in the country (https://www.abc.net.au/news/2021-04-14/fact-file-rupert-murd...). This has led to a number of high profile people including two former prime ministers from both side of the political divide to speak out and say there's a major problem (https://www.theguardian.com/australia-news/2021/apr/21/forme...). This is also why we had that legislation that aimed to force social media to pay the print media for links, there's very clear evidence that the Murdoch media machine has very deep influence with the current system of Australian politics. This is relevant because for many years this same media organization was being exceedingly supportive of the Berejiklian government in NSW and was actively avoiding reporting on their corruption and generally reported in a persistent positively biased way on certain people in that government (and important to note that this positive reporting was done on people who's conduct wasn't ethical). As a result a lot of local populace just simply didn't know how bad things were, discussions on other non-Murdoch media and social media was the way in which many people became aware of just how bad the corruption really was in NSW. I mean sure you didn't have to dig that hard, or maybe even at all, because the deputy premier liked to boast about how he engaged in pork barrelling and other such conduct (for foreign readers, this is not satire or an exaggeration, he literally used to openly claim this as a badge of honor: https://happymag.tv/barilaro-blue-mountains-bushfire-relief-...). But the corruption was by Australian standard bad: https://jacobinmag.com/2021/10/australia-nsw-premier-berejik..., had it been other politicians involved it would have been in the newspapers frequently. Once news of this finally got out this eventually led to the leaders of the NSW State government being ousted. The persistent corruption and unethical behavior of a small group was brought into the open by an investigation of the NSW anti-corruption commission and the news was impossible to ignore at this point. This episode also involved the arrest without a warrant (with proper process not being followed, the questioning of the attorney general about this is entirely worth watching: https://www.youtube.com/watch?v=lcKBDveFXCU) of a journalist who was investigating this corruption. There was also a defamation case brought up by the deputy premier against a Youtuber who was documenting the corruption of the deputy premier. After the scandal was well and truly out in the open the deputy premier resigned and settled the defamation case as a defense based on truth of claims looked fairly certain to prevail and the political backing he once had was gone (https://www.abc.net.au/news/2021-11-05/john-barilaro-settles...). Since this episode of NSW politics has unfolded the pushes to have a federal independent corruption commission have once again been prevented from moving forward. The main thing that concerns many people is that these defamation laws might in practice be used only to silence people talking about corruption and other political opponents much like what was seen very recently in 2021 in NSW. It is entirely possible that the stated aim of reducing harm to people in the community won't actually be a priority here at all. Hopefully an informed discussion can be had here and good laws can be created, there's most certainly issues with trolls and various bad faith actors online so hopefully good policy can be made in this space.
I think reducing the harms that are done by trolls and various other bad actors on the internet is an important question for this era. But this might not be the main motivation behind these new proposals. One of the most concerning parts of this is that the rules around what trolling is and who gets to determine who is a troll have not been a prominent part of the discussion. There's important recent political context here that international readers may be missing, the current federal government campaigned at the last election with a promise to introduce a independent federal anti-corruption commission but in recent times has completely backflipped on this (https://www.smh.com.au/politics/federal/morrison-must-honour...). Australia's mass media ownership is remarkably centralized with Murdoch owning an extremely high percentage of the print media in the country (https://www.abc.net.au/news/2021-04-14/fact-file-rupert-murd...). This has led to a number of high profile people including two former prime ministers from both side of the political divide to speak out and say there's a major problem (https://www.theguardian.com/australia-news/2021/apr/21/forme...). This is also why we had that legislation that aimed to force social media to pay the print media for links, there's very clear evidence that the Murdoch media machine has very deep influence with the current system of Australian politics. This is relevant because for many years this same media organization was being exceedingly supportive of the Berijiklian government in NSW and was actively avoiding reporting on their corruption and generally reported in a persistent positively biased way on certain people in that government (and important to note that this positive reporting was done on people who's conduct wasn't ethical). As a result a lot of local populace just simply didn't know how bad things were, discussions on other non-Murdoch media and social media was the way in which many people became aware of just how bad the corruption really was in NSW. I mean sure you didn't have to dig that hard, or maybe even at all, because the deputy premier liked to boast about how he engaged in pork barrelling and other such conduct (for foreign readers, this is not satire or an exaggeration, he literally used to openly claim this as a badge of honor: https://happymag.tv/barilaro-blue-mountains-bushfire-relief-...). But the corruption was by Australian standard bad: https://jacobinmag.com/2021/10/australia-nsw-premier-berejik..., had it been other politicians involved it would have been in the newspapers frequently. Once news of this finally got out this eventually led to the leaders of the NSW State government being ousted. The persistent corruption and unethical behavior of a small group was brought into the open by an investigation of the NSW anti-corruption commission and the news was impossible to ignore at this point. This episode also involved the arrest without a warrant (with proper process not being followed) of a journalist who was investigating this corruption. There was also a defamation case brought up by the deputy premier against a Youtuber who was documenting the corruption of the deputy premier. After the scandal was well and truly out in the open the deputy premier resigned and settled the defamation case as a defense based on truth of claims looked fairly certain to prevail and the political backing he once had was gone (https://www.abc.net.au/news/2021-11-05/john-barilaro-settles...). Since this episode of NSW politics has unfolded the pushes to have a federal independent corruption commission have once again been prevented from moving forward. The main thing that concerns many people is that these defamation laws might in practice be used only to silence people talking about corruption and other political opponents much like what was seen very recently in 2021 in NSW. It is entirely possible that the stated aim of reducing harm to people in the community won't actually be a priority here at all. Hopefully an informed discussion can be had here and good laws can be created, there's most certainly issues with trolls and various bad faith actors online so hopefully good policy can be made in this space.
In the modern world we primarily have banking systems that are based on fractional reserve banking and currencies without any explicit backing. This means that from a forex point of view the currencies are only worth as much as there is confidence in them. (National currencies often derive power in a practical sense due to taxes having to be paid in those currencies even without any explicit backing of the currencies value). Because of these dynamics if everyone were to try to withdraw their money from the bank at the same time there would be a major problem because the banks don't have the money to cover it. An event that makes people in a country all want to withdraw their money will cause a crisis just about everywhere at the moment. Sure you'll get people from the central bank saying they can create enough money to pay everyone out, which they can pretty easily do due to the fact that most money now is just entries in a database. But the problem in all modern banking crisis situations isn't so much the act of giving people money its what you can buy with that money. (A caveat, when things get really bad like they did in Venezuela the currency degraded so much that the government had problems paying for the printing and transport of new banknotes with even more zeros, but that's a rather exceptional case that occurred very late in a crisis, again the money was buying less)
Banking crisis conditions can come about for a variety of different reasons but they all involve some lack of confidence in the ability to be able to exchange money for goods at a later point in time. This can come about because people aren't able to access their money in the banks (Eg Cyprus crisis) or because the value of the money is rapidly deteriorating (Eg Yugoslavian Hyperinflation) or because there's some event that devalues the currency. This is by no means an exhaustive list, but it shows that different things in different places can cause crisis situations to emerge. There's some interesting work that was done by the Bank of International Settlements about the early warning indicators for systemic banking crises. Seeing what was happening in Turkey inspired me to write about bank bail ins. Along with bail outs this is something that you'll likely see in banking crises. More detail about the early warning indicators and bail in mechanisms here: https://www.lesinskis.com/bank-bail-ins.html
I also talk about this in the article but I don't think it's easy to neatly determine where currency crisis situations "start". There's at least 14 countries in the world that are in what could be the early stages of a banking and currency crisis but it's likely that people will only say they are in a crisis at a much later stage where the problems are so big they are impossible to ignore. Other places like Canada get ignored routinely but the situation there could rather easily turn into a major crisis unless something changes there.
I'm aware that capital requirements have mostly taken over from reserve requirements over time (in such a way that the banking system is even less sound than the average person assumes), but the point I was making is that in all these these systems there will be liquidity issues if all the depositors were to try to withdraw their money to spend it on something at the same time.
Its not a real black swan because it's so painfully obvious to anyone who's looked at it in depth but the demise of Tether will have an enormous impact on BTC.
Basically the COMEX changed the rules explicitly to disadvantage the Hunt Brothers. The changes made to margin requirements is what made the difference here. I don't think anyone could claim that the silver market is an entirely free market, I remember last year a press release where the COMEX said they weren't sure how much they actually had in their vaults in eligible and registered, with a plus/minus 50% figure being given on their estimates. I can't think of any other major market where someone would come out and say they didn't know how much inventory they had and that their best estimate could be 50% off. And the participants in the silver market are still rather ridiculous to this day: https://www.reuters.com/business/finance/jpmorgan-pay-60-mln...
Would some cryptocurrency stuff count? We have no idea how much a handful of whales control Bitcoin or Eth. The tether thing seems really shaky too with how much they actually have in reserves. Same with a number of exchanges or major market players.
Cryptocurrency is also a bit wonky because of always including forever lost access to a solid percentage of the currency. Bitcoin is the most notable.
Tether is an enormous fraud and the financial reporting of the reserves has just never been up to generally accepted standards.
The thing with crypto is that much like some of these other commodity markets there's less real trading volume than many people think (there's been a lot of wash trading going on: https://cryptobriefing.com/binance-wash-trading-icebergs-tip...). Where crypto is very different from the futures markets is that you can just buy the stuff directly because the costs of holding it are much lower. Say I want to invest in oil, it's a massive pain in the ass to build warehousing to start taking delivery, whereas something like crypto is much easier for a company or individual to hold. From this point of view there's very real non-regulatory reasons why trading futures for oil makes sense whereas this is not so for cryptocurrencies.
Bitcoin is best example. Somehow currency we aren't sure how much is reachable anymore should come some sort of gold standard... Like at any moment significant fraction of it could be dumped on market. Probably won't, but it is not entirely certain...
I think a lot of people in the comments are focused on the various sales aspects of why black Friday prices move the way they do however I think this year is an example of high inflation being more of a factor than anything else. I'd think this is an indicator that it is probably a good time to buy some inflation hedges instead of discretionary consumer goods.
If we don't ask these questions then technological approaches to money, like various cryptocurrencies and other financial technologies are unlikely to actually cause long lasting improvements. We have some serious monetary policy problems in the world right now and while some tech could help (in some cases) these aren't primarily technological problems.