EU referendum, brexit and the aftermath

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^^ With a currency, you're already in a position that as single entity controls that currency, bounded by it's own economic interest.

With crypto /shells / leaves, once a single entity has enough of it, it corners the market and sets the price.

My point is that it's almost no different from fiat in that respect.

The regulation of "value" in crypto currency is built in.

For fiat it needs to be imposed, by a fiscal authority, or by something like the gold standard.

For example:

Whereas a fiat currency can be devalued by QE, and this needs regulation, the same is just not possible in a crypto model.

Maybe not now - but we're talking about the hypothetical of crypto usurping fiat.

Someone somewhere is making promises of paying a certain amount of crypobits for borrowing, and providing a line of credit for that.

Scale it up, and you have only a few steps to QE.

Unless of course you're regulating it back the supply of cryptobits, in which case you've got a gold standard instead.

But ask yourself why devaluation is such a concern to you? It's mostly rich cunts and crypto enthusiasts that obsess over the danger of inflation.

As an average Joe Bloggs I prefer the trade off of having democratic control over my currency with the relatively small risk of runaway inflation. Most of my wealth is in stuff rather than cash anyway.

Everyone knows that toilet rolls is the new post-Brexit currency

We have democratic control over the £ ? :)

Very indirectly yes...quantive easing always helps big business though.

And potatoes :p

We have democratic control over the £ ?

Yes.

A bit for sure by who we vote in but monetary policy is mostly set by the central bank isn't it?

Not given any input if we want quantive easing to go to big business or if we all get £1000 to spend in the UK.

I would have similar complaints about the euro and democratic input.

A bit for sure by who we vote in but monetary policy is mostly set by the central bank isn't it?

Yes - Brown removed the ability for the Treasury to set interest rates and gave it to the BoE very early on when he was chancellor. I'm not sure the reason for it though.

I think (not sure as I was quite disinterested at the time...) that prior to that in theory at least, the Treasury could change rates at any time, on any day

Not just in theory

https://en.wikipedia.org/wiki/Black_Wednesday

Someone somewhere is making promises of paying a certain amount of crypobits for borrowing, and providing a line of credit for that

Doesn't this not work with crypto stuff as you can't just make up money as a loan as is done currently, all the currency and transactions are recorded in the Blockchain or whatever.

OK. Go to a shop. Try and buy something with money. If they give you the thing in return for the money, then the currency is evidently working as intended as a universal medium of exchange.

Isn't that money rather then fiat currency though, money has been around for bloody ages longer than fiat. I took the convince me it works comment as money has become so massively unequally distributed that it's obviously not working for everyone.

OK. Go to a shop. Try and buy something with money. If they give you the thing in return for the money, then the currency is evidently working as intended as a universal medium of exchange.

Of course it works at that level, I'm referring to the larger monetary & financial system, not just the spendy bit. Though if my bag of crisps that costs 50p today would cost £50 next week due to a (admittedly rare) hyperinflation event then it'd suggest the system has failed people at that level at that point in time. That kind of event here may force us to choose dollar or euro to reset things.

On cash though, Some folks are nervous about cash being refused in many shops now. I'm undecided. It will be interesting to see if cash returns once the world is covid-safe.

Indeed. But saying that a given system isn't perfect isn't a particularly productive use of bandwidth unless you have a genuine alternative.

I dunno, folks can't voice an opinion without offering a solution? I'm acknowledging that I can't solve this, greater (and more altruistic than our money managers) minds are needed.

conflating the use of a fiat currency with political policies on the economy generally.

Probably. I'm at/beyond the limit of my brain here tbh, as evidenced above no doubt ;)

Money in the non-fiat-currency sense is just ad-hoc credit or debt, though.
At least, according to some book I read.

Anyway, worriers about the immaterial nature of fiat currencies seem unlikely to be much happier with everyone continually issuing their own currencies in the form of tabs, tally sticks and reputation.

Money in the non-fiat-currency sense is just ad-hoc credit or debt, though.

Which worked fine for buying crisps from your local shop pre fiat.

worriers about the immaterial nature of fiat currencies seem unlikely to be much happier with everyone continually issuing their own currencies in the form of tabs, tally sticks and reputation.

That may not work so well, crypto stuff might well help there. I dunno really either but I can see how currently the monetary system doesn't to work in a lot of ways for a lot of the earth's population.

I took the convince me it works comment as money has become so massively unequally distributed that it's obviously not working for everyone.

I missed your post as I wrote my reply on the same point.

I see 3 problems:

1) Unequal distribution, particularly where originally created via colonial activities etc and to some degree still maintained.
2) Depletion/destruction of natural resources to convert to money/currency/value/whatever.
3) It's a trust/confidence based system. Believe it'll be fine forever and it'll be fine forever.

(Edit: spooky we both used buying crisps as an example).

Isn't that money rather then fiat currency though, money has been around for bloody ages longer than fiat

To an extent, yes. But when money was made of gold, silver and copper and had an intrinsic value (i.e. the value of the materials it was made from) it wasn't a fiat currency so it sort of made sense. A fiat currency has no intrinsic value, and so the only reason the cash in my wallet or the electronic figures in my bank account have any value is due to the collective self-delusion inherent in a fiat currency. Despite the fact that it is inherently worthless, it still works as a universal medium of exchange.

I took the convince me it works comment as money has become so massively unequally distributed that it's obviously not working for everyone.

Certainly not what I meant it to mean. The point I was making is that a fiat currency works despite the fact that 'money', as a concept, is in fact worthless. If everyone stopped believing that money is valuable, the whole thing would fall apart. It only works because we all agree it works, and because it practice it does work. The distribution of wealth isn't dependent upon whether you have a currency with an inherent value, a currency linked to something with value (such as a gold standard currency), or a fiat currency. That's a function of the prevailing political and economic system. You can have massive disparities in wealth in any economic system, regardless of whether it uses a fiat currency. Feudal medieval states were hardly fair, meritocratic or just but they managed that just fine without a fiat currency.

Of course it works at that level,

We are in agreement then!

I'm referring to the larger monetary & financial system, not just the spendy bit. Though if my bag of crisps that costs 50p today would cost £50 next week due to a (admittedly rare) hyperinflation event then it'd suggest the system has failed people at that level at that point in time. That kind of event here may force us to choose dollar or euro to reset things.

The USD and Euro are both fiat currencies though, so that wouldn't change the underlying collective delusion that money is valuable when in fact it has no intrinsic value. Whether or not your currency is a fiat currency or not, the distribution of wealth is essentially a political issue unrelated to the nature of the currency the state in question uses.

I dunno, folks can't voice an opinion without offering a solution? I'm acknowledging that I can't solve this, greater (and more altruistic than our money managers) minds are needed.

You're right, I'm being overly dogmatic. Identifying a problem is a part of finding a solution, even if the solution isn't immediately apparent. However, whether a currency is a fiat currency or not doesn't strike me as being the underlying problem. The underlying problem is the distribution of wealth and the means by which any currency is distributed amongst the population. What form that currency takes, however, is not the fundamental issue I would suggest. Whether it's shells, leaves, precious metals or the collective delusion of a fiat currency.

The USD and Euro are both fiat currencies though, so that wouldn't change the underlying collective delusion that money is valuable when in fact it has no intrinsic value.

I hadn't meant to imply otherwise, just stating that this would be the likely "correction" if pound sterling fails. There'd be chance euro or dollar could fail similarly eventually, that chance is always there.

I like the term collective delusion.

However, whether a currency is a fiat currency or not doesn't strike me as being the underlying problem. The underlying problem is the distribution of wealth and the means by which any currency is distributed amongst the population. What form that currency takes, however, is not the fundamental issue I would suggest. Whether it's shells, leaves, precious metals or the collective delusion of a fiat currency.

Shells, leaves, precious metals, or even grains of sand would all ultimately be finite means of currencies, whereas collective delusion is potentially infinite.

This means that the wealth inequalities we both agree are a problem can become orders of magnitude bigger than with any of the finite currencies, even grains of sand (eventually).

I think the way financial and monetary systems work are very much linked, if not the whole cause of financial inequality. "Money" at the moment is created by banks as loans, it's not real and is based on belief as you say, but there's loads of it, and therefore debt, circulating around the world, and it mainly seems to be going from people borrowing because they need it to buy a house or food or whatever, and going to wealth hoarders, usually bypassing taxes on the way and then sitting there, making them more money whilst most people get more in debt. If money and debt weren't created in this way then I don't think it would be possible to have the extreme wealth inequality that has been getting worse since the 80s. Fuck knows how to fix it but it ain't right, there shouldn't be billionaires.

If money and debt weren't created in this way then I don't think it would be possible to have the extreme wealth inequality that has been getting worse since the 80s.

I think the serfs in medieval Europe would beg to differ. Quite vigorously. Wealth inequality is getting worse now than it was in recent history, but it's waaaaay better than it has been historically, regardless of the form of currency used. As far as I recall, the Normans had a pretty firm view of wealth distribution, and that was that they should have it all, and that was as way back as the 11th century before fiat currencies had even been thought of. And they did indeed manage to have all the wealth. It doesn't matter what form wealth takes - if the people in power decide that they and their mates should have it all, they will. Because they're in power.

I don't think the collective delusion part is necessarily the problem, but the madness in the way it's "created" has never made sense to me.

I think the serfs in medieval Europe would beg to differ. Quite vigorously. Wealth inequality is getting worse now than it was in recent history, but it's waaaaay better than it has been historically

Yeah, I'm not suggesting that a return to serfdom should be considered.

I agree, but 'value' is an inherently nebulous concept. Apparently gold is valuable. Not as far as I'm concerned. I doubt there's more than a couple of grams of the stuff in the house, and that's only on electric connectors. Most of the world's population is prepared to pay vast sums for it though. Go figure...