Negative Interest Rates
- Thread starter Suhrreal
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Interest rates aren't the problem or the solution. The real problem is risk aversion by banks and in the economy which has lead to anemic economic, productivity, and wage growth not just in the U.S., but all around the world.
Welcome to the age of MMT, Modern Monetary Theory.
All debts are being nationalized by the Fed.
All your base are belong to us.
All debts are being nationalized by the Fed.
All your base are belong to us.
On a global level people someday very soon non Americans will stop buying the dollar and start buying other assets (most likely solid assets).
All they have to do is justify it as diversification and it is over.
All they have to do is justify it as diversification and it is over.
Negative interest rates scare the hell out of me and seeing them in Europe has made me move money into crypto.
If a bank starts charging me to hold my money, I’ll move all my money into crypto.
If a bank starts charging me to hold my money, I’ll move all my money into crypto.
Crypto bothers me for two reasons.
1. If the internet dies for even a short period of time (days, weeks etc) for any reason you don't have access.
2. The instant a quantum computing system is online they are worthless due to easy linear hackability.
Nothing is perfect but that's two fairly large flaws.
I see the potential flaws in our current system larger than those two issues.
Soon you’ll easily be able to pay your CC with crypto or have a crypto card. So the internet issue will be resolved shortly. I also keep all my coins on a nano wallet. So they aren’t on the Internet.
Emp hits... you still have no access for weeks or months until infrastructure is rebuilt.
I agree the system flaws are bigger. I just have more faith in solid assets.
There is a entire slew of institutional money (as well as retail money) parked at coinbase.. I only keep a very small amount in the bank, and also watch their fees. (they keep waiving them) but this is exactly my plan as well.
In many places in Asia, there is a Gold shop right outside the grocery store. Think of it like the Subway on the way out of the Walmart. Every pay day, those people take the extra, and buy gold.
Now I am not a big believer in gold anymore, but our currency is still thought of highly overseas. It's almost a mantra over there, and while we know the currency is being debased, it seems their own currency is being debased at an even quicker pace.
Gold has beaten Buffett since 2000 even with a bear market most of the last decade.
It was that way before the latest crash. It is even more stark now.
It’s that the same for the majority of our current system? How many people have more than a few hundred in cash??
Definitely agree with #1. There is no workaround to that and all it takes is one major electromagnetic event to disable the entire system. With that said, I have started to look at the crypto options a little more closely. No doubt the rich have already been using it to move and hide large quantities of money.
#2 is probably not something we need to worry about in our lifetime. There is no guarantee they will ever create a quantum computer of any significance. A fork to a quantum-resistant encryption scheme would also ward off any threat posed.
Fair... but a true quantum machine might find ways around said forks but what do I know.
30 years tops imo... It's not a worry anytime soon I agree.
Crypto is for fun money. Not saying worthless, it's just not an asset backbone.
Make sure you understand the underlying technology associated with the cryptos you are buying. A credit card does not solve the problem of the internet going down. Connectivity is absolutely required to update the blockchain with every transaction.
And it should be said, if you have a problem with the current system and the actors behind it, just remember that they have the resources and money to buy up all the crypto they want. They probably already control a huge percentage of it.
Also, as I mentioned before, the internet going down screws up the current system as well. Maybe not to the same degree, but basically nobody keeps more than a couple hundred of cash in hand or more than a thousand hidden in their house. So the point is kind of moot.
Not really. If you're complaining about the current system (which IS the fed) then ignoring what will probably actually happen if that system goes to crap isnt very smart.
My concern isn’t that the current system isn’t the potential for the internet to go down making it difficult or unusable. I also hear that argument as a reason why crypto is worse than the current system, which is why I bring up that they both have the same issue.
The fed IS the system. If they go down, electricity will go bye bye for a while which means no internet and no crypto.
You're being willfully blind to the consequences of the fed being the problem (which they are).
There are quite a number of finance guys out there that just complain and complain about what we are doing, yet they would do the same thing if they were in charge. Why? because there isn't any other move on the chess board.
I'd prefer we not blow up the system until we have to. So if that means print and inflate, then by all means.. just have to be smart with how you manage your assets.
Cryptos are still in their infancy, and surprisingly have not made very much progress in the last couple of years. That will change in time, but people should not be screaming for a reset tomorrow, as the shift in balance and power could be quite catastrophic for the country.
Agreed on all points. There are several things that should ALSO be done (and should have been done in 2008 and 9) regarding prosecutions and business/debt closings that won't happen this time either. But I will agree the concept of buying time and sacrificing inflation is in concept valid.
Now... do people understand that prices ar going up 2 or 3 times after the money velocity picks back up again? Lol...
Quantum computers are already here. I don't think it will take any longer than 10 years before they're put to use in cryptography and solving other real world tasks.
I follow technology extensively and know what I'm talking about. There has been a lot of progress in quantum computers over just the last few years and that progress is only going to accelerate with more investment. Right now quantum systems are limited to 50 qubits largely because that's as good as the best classical computers can do. Now they're working on error correction to produce a universal quantum system. They need to make the qubits a bit more reliable, but once they do that it should be relatively easy to scale up from there. And that's if you want to make a fault-tolerant universal quantum computer which I doubt is even necessary to start being used to solve real world and scientific problems. Quantum supremacy has already been achieved on discrete optimization problems, which represent a wider set of problems than some of the skeptics like to admit. Cryptography will be one of the first problems quantum computers are applied to just as it was with classical computers.
There’s a lot of fundamental problems with Cryptos. For people who like to gamble with their money, it’s probably not a bad gamble. You might end up on the good side or the bad side. That’s why it’s a gamble. But if one or two big investors move their money, it can all crash and nothing their to back it or bail it out when it falls
Which is unlike the USD and the power it has. The government has assets and its biggest asset is it’s Military. Don’t under estimate the backing of that. Many currencies in the history of the world survived mainly on force. US has never as a country had to really sink to those depths but if need be, we could.
Crypto just lacks power. And I guess that was it’s purpose and it’s a great theory, but it lacks a lot of basic financial fundamentals. Again, if you invest in it, I hope your on the right side of it cause when it does crash nothing is going to be there to catch it as it falls
The fact is, we are nowhere near even an application-specific quantum computer of any sort of reliability. The technical hurdles in the way of what you have read about in pop science media are enormous. The way you brush them off just shows your lack of understanding. Again, there are no guarantees we will EVER have a legitimate quantum computer. If we had that guarantee, you would definitely see way more investment and spending in that area than we have now.
DANGEROUS. Governments are planning on their own crypto currencies and don't think for a minute they will let there be competitors. Some smart people believe they are using this crisis to move in that direction. I have maybe 25k in them but that is speculative money, money that I can live with going to zero.
Haven't they already? The Fed didn't just add $2+ trillion to their balance sheet because people were lining up to loan the U.S. Government money to pay for this almost $3 trillion and counting stimulus.
Honestly, with the current bank system, wouldn’t that be an issue with normal banking also?
Yeah bet against technological progress. That's sure worked out for groups such as the Luddites before. I'm not even a believer in exponential technological progress, but this coming decade is going to produce more technological change than the last 5 decades combined.
Quantum computers will be developed in this decade too. No doubt the challenges are enormous, but humans tend to solve enormous challenges when given the resources to do so. Quantum computers are no longer just a lab curiosity, but there are now industry players putting what is not an insignificant amount of resources into developing them. Your assertion that we will never be able to develop quantum computers is laughable. We may disagree on the timeline, but your take that we won't be able to develop them at all is absurd given the enormous amount of progress made in the field in just the last few years. In 10 years, we will have useful quantum computers in the sense that they will be able to perform at least some cryptanalysis tasks and perform complicated calculations in support of advancing many different scientific and technical fields.
Does that mean any random hacker will have access to quantum algorithms and a quantum computer to wreak havoc on cryptocurrency or other financial markets in 10 years? Most likely not, but I never claimed it either.
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Of course. Whoever wins the quantum war will control the banking system. It's one of those truths that nobody on high will admit.
What happens if china wins and prints/steals the digital us dollar via hacking the blockchain?
ok you mean crypto currency only. the banking system is not based on blockchain as of now correct?
I said there are no guarantees we ever develop a quantum computer. Many people much smarter than either of us have said the same thing. There are even some ostensibly educated people that have begun to doubt quantum mechanics itself. I am not one of them, but the fact that Ivy League educated people can doubt the very scientific foundation that quantum computers rely on should speak volumes.
If you're interested in getting to the crux of the difficulty in creating a true quantum computer, Google the measurement problem and enjoy. The prerequisites just to get a basic understanding of that are fairly heavy.
That's an interesting point you bring up because China is by far the largest miner of Bitcoin. For the uninitiated, the mining of the coins is how transactions are powered. There are huge security and throughput issues involved with the Bitcoin blockchain. If any party ever controls over 50% of the mining power, they have the ability to modify the blockchain in any way they want. This means they could steal all your Bitcoin without ever having to hack you.
I mean everything but things are moving toward blockchain very quickly for good reason.
Our current computers are effectively linear in programming and design. Quantum computers would use 3 dimensions in comparison.
It would be beyond simple to hack modern computers with one of those once up to speed.
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