I hear this kind of phrasing frequently in the discourse nowadays, but it doesn't seem like a useful framing to me. Is there a safe amount of chocolate? A safe amount of sex? Are we supposed to stop enjoying every pleasure of life as soon as someone does a large study with high enough statistical power to show some negative effect on health, no matter how small?
The question is whether the enjoyment we derive from these things is worth the risk, not whether there is a "safe level", whatever that means.
The phrasing is important as the discussion about personal decisions needs to start from acknowledging it’s a poison, which was not the case for the last centuries. We’ve had narration that some wine and beer is safe and that was incorrect.
Chocolate is beneficial in moderation as far as we know so not sure why you brought it up. So is consexual sex with repeat partner.
Besides the extraterritoriality issue, the other problem with FATCA is that it makes Americans living overseas (99% of whom are just normal people not trying to evade taxes) radioactive to overseas financial institutions because of the potential consequences of failing to report on someone's accounts properly.
Sadly a lot of Americans hear "foreign bank account" and immediately think "tax evasion" without realizing there are a lot of ordinary Americans overseas who just want to pay the rent and save for retirement but can't because Uncle Sam follows us wherever we go for life.
Foreigners on DTVs are allowed to stay for five years. To prohibit someone living in Thailand for such a long period from opening a bank account - often necessary for paying rent and other necessities - is insane. And sanctimony about "guests adapting to their hosts" doesn't make it any less so.
> What happens when prices actually start to fall? Because that’s not just a hypothetical. It’s already happening in places like Phoenix, Atlanta, Miami, Dallas...
Then two paragraphs later
> In The Atlantic, Rogé Karma recently pointed out that housing prices are rising fastest in the very cities once seen as escapes from high-cost coasts, places like Phoenix and Dallas...
So which is it?
There is truth to the fact that the way the housing market is intertwined with the financial markets creates some risk, but those risks are manageable - a nationwide downturn in housing prices is exactly the kind of scenario addressed by the Fed's stress tests for banks.
The article is full of bizarre logic. An increase in housing supply leads to a fall in prices, which leads to a fall in supply? No, in fact the conclusion contradicts the premise. The author is making the classic econ 101 mistake of confusing the supply curve (which is supply as a function of price) and quantity supplied.
And finally the author explains his own solution which is... an increase in supply! But only the kind of supply he approves of ("small scale, incremental development"). Left unexplained is why this type of supply, if carried out on sufficient scale, wouldn't have the negative financial effects he worries about.
Right clearly, as supply meets demand and prices stabilize or start to drop, new supply will slow down. You can easily have scenarios where lots of supply is being built at once and outruns demand by a lot and causes a short term drop in prices, but that still won't cause supply to drop.
I think arguments like the one in the article have over-learned the lesson of 2008. Yes the financial crash in 2008 wiped out so many home builders that capacity to create supply was lowered. But that's not the sort of event that is caused by high supply.
This discussion so far ignores cost. That's a problem.
And cost has to do with intensity of effort. In the case of construction, if there is less construction going on, then there is ("all other things being equal") more personnel available: so less delays and less hourly cost. If there is less construction going on, there is also less pressure on materials suppliers, so less expensive lumber, concrete, etc. So that it's easier to make a profit. So that it might make sense to build lower value housing. While when construction is booming, there is extra less incentive to build lower value housing.
Of course, if land availability is artificially constrained, then there is never much reason to build lower value housing. The profit is elsewhere.
Investors & developers are motivated by profit, lower prices reduces (expectation of future) profit, so less housing will be built.
Right?
Yes, article is too wordy and lacks focus. Typical for us progressives.
OC prescribes "bottom-up" something something. I haven't read Housing Trap, so can't comment.
My prescription would be for policy makers to work with investors & developers, figure out how to make profits more stable and predictable, figure out how to institute those reforms.
I'd also consider restructuring the housing industry. eg IIRC in Germany, developers are often also landowners. So they have longer horizons for considering profitability. Seems like an obvious reform, especially considering climate crisis. Like design & build wrt total lifetime cost of ownership, so adopting passivhaus and activhaus innovations is a no brainer. (Just trying to say when landowner is also developer, they can capture more profit by incorporating better tech.)
As soon as I saw it was the founder of Strong Towns it all made sense.
Strong Towns, Not Just Bikes, and all those content creators are fulfilling the “hobby” of city planning (ie, watching hours of city planning YouTube videos, but never actually organizing at a local level)
This is a really great video about one man’s experience with trying to improve his community, getting involved in local government, and his criticism that the city planning YouTubers always gloss over what this actually looks like - they just point out what we’re doing wrong.
So I think that’s why the logic doesn’t make sense. It’s not meant to be actionable. It’s meant to be easily digestible so that people participating in the hobby can feel enlightened.
Strong Towns is "not meant to be actionable"? The whole modus operandi of ST is bottom-up change from local chapters of advocates who organize for change at the local level [1]. The organization develops things like the Crash Analysis Studio, which is a structured model for local citizens and municipalities to respond to car crashes in a similar way to aircraft crashes, and redesign streets to prevent further deaths [2]. Here's a panel for a city I lived in, Ottawa [3].
As for NJB, he's abrasive and I don't agree with everything he says or how he says it, but he does talk a lot about his past advocacy work with the local government on Toronto. He encourages action, but I don't understand what he's supposed to do here, make videos for specific local advocacy of every large city in the world?
Is your argument that what Strong Towns and NJB are doing is somehow invalid because they're not also doing something completely different? Raising awareness is also a very important role. Sure, maybe 5 friends can get you elected to a local office, but first you need to convince those 5 friends. You need to get people to care.
Of course organizing is important, but so is awareness, and that's certainly what NJB is all about (I'm less familiar with Strong Towns). And organizing is especially unimportant to NJB, because he already lives in a country where this stuff is better organized than he'd ever been able to come up with. He's just spreading the good word and showing the contrast with North America. And he's very effective at that.
The witty snarky videos about organizing are better made by people who know more about organizing. If you think they're not emphasizing the thing you think is most necessary, why aren't you out there doing that?
I don’t think this tracks for me. Sure urbanist YouTube doesn’t really talk about local politics, but an extremely high percentage of people interested in city planning that I know have started doing something to influence local policy. One of my coworkers ran for city council recently. It turns out that people who are interested in watching multiple hour videos on the specific widths of roads are also not that bored by the ins and outs of local politics.
I dunno about that, the HN community has had a curmudgeonly streak as long as I've been a part of it (~15 years). Not exclusively, but... persistently!
What? Strong Towns is not just their "content creation", they ARE local organizations. You might have a chapter in your city. This criticism tells me that you don't know what Strong Towns is, what they do, the actual specific policy guidelines they come up with and push that have real influence on local city planning.
Strong Towns gives actionable proposals all the time, and their main purpose is local organizations to actually do local change. To accuse them of being a content creation scheme that does no organizing tells me that you have not looked into this at all and are making immediate assumptions based on the aesthetics of their content.
On balance, I think Strong Towns has done a lot of good, but in terms of organizing on the ground, I think the two large YIMBY organizations are better at equipping people to make change in their communities:
I happily read and share a lot of Strong Towns content - they do put out a lot of good stuff despite the occasional dud. But in terms of learning how to show up and get things done, I think that's not their strongest spot.
Yeah I think my original comment was too cynical and misplaced when lumping in all of the Strong Towns organization with Not Just Bikes style content. I’ll read through what they have today.
Admittedly my experience might be colored by the fact that they don’t seem to have much of a presence in my home town of Boston - it’s more other groups like the Cyclist Union showing up at meetings carrying forward things like bike lane advocacy, etc.
Also no discussion of interest rates - I bought my house just a few years ago at just under 3%, today I would be paying more than 6% - I couldn't afford the payments if I refinanced. I believe that interest rates are the primary driver of less construction: people who want to buy can't afford to unless they downsize.
> I bought my house just a few years ago at just under 3%, today I would be paying more than 6%
Yes, the cost of money (interest) was cheaper a few years ago. But the cost of money has gone up, primarily because central banks are also managing inflation by making borrowing more expensive.
3% change really breaks your budget? Higher rates generally mean lower home prices anyhow making the effective mortgage rate more similar than anticipated.
Percentages don't work like this. It isn't a 3% change in rate, it is a doubling of the rate, and that will break the budget. You can find mortgage calculators to run whatever numbers you want, but it is hard to find any realistic scenario where it is less than $500/month, and for many over $1000/month. That amount of money will break any budget.
I expect home prices to go down long term if interest rates remain as they are. However home prices are a lagging indicator and so it will take years for the interest rate changes to cause that change. (and over those years other things will happen meaning we will never be able to figure out how much change is because of rates and how much because of other factors)
Percentages don't work like that, either. Since buyers are mostly bound by available monthly budget, raising interest rates increases effective price, which lowers demand at a particular price point which drives total purchase price back down to get the monthly mortgage price closer to affordable.
Obviously, this feedback isn't entirely effective because buyers can simply opt out or delay a purchase but it does have substantial effect.
Thus, increasing interest does not have the full impact as predicted by assuming that purchase price is fixed.
It hasn't so far, though yes it should and eventually will imho.
People I know tend to get ass in deep with debt will little room for error, and doubling interest on a mortgage would certainly push many over the edge of "affordability"
I would not call 6% high - I'd call it normal, maybe even low-normal. 3% was low, and done at a time when stimulating the economy was thought important enough to accept the consequences. However we are not facing the fallout of rates going back up.
Well, literally the point is to stop banks from taking as many loans and force them to keep more deposits at hand to cover withdraws.
But yeah, getting the economy unaddicted to ZIRP is a good side-effect that the US will get if they manage to keep it all the way through the withdraw phase.
> The whole point of high interest rates is to get your economy unaddicted to cheap money and force economic efficiency.
No, the point of high interest rates is to slow inflation; its part of the Fed’s thermostatic response to changes in the employment and inflation landscape.
It’s not an swift radical ideological change from the same Fed board with largely the same members that also implemented low rates not long ago. Its changed external conditions leading to the same kind of response the Fed tends to make to the same kind of condition changes historically.
The increase in supply he advocates for is a viable solution because it is sensitive to different things.
Small, local development gets built and becomes profitable based on demand of the local housing market, but almost all housing today is built by large developers. These large developers are responding to the demand not for housing, but for the mortgage itself. Thanks to nationalized mortgage securitization the buyers the market cares about are those buying these securities: banks, pension funds, insurance companies, etc. When prices fall these securities become less attractive financial products, which decreases the demand for large development.
Chuck advocates for local building, which can ignore this macro-level demand and instead respond to the actual local demand for shelter.
Regarding the bit about Dallas being an example of rise & fall of prices it seems to be an issue of poorly worded (or explained) difference in time frame. I replied under another post with the details from the sources (https://news.ycombinator.com/item?id=44635228)
Even the title is a bit of a mess. What happens when the price of $THINGY goes down (where $THINGY is housing)? It depends. Did the price drop because of an increase in supply, a decline in demand, or both? That's what determines the overall effect (including something as basic as the change in quantity!), you can't just reason about a price change in isolation. If this article comes from the Strong Towns folks it's not making a very good argument for their POV, I'd expect way better.
It can easily be both statements are true. And a quick look at Zillow's data on Phoenix shows a huge run up in prices from 2015, but a leveling and interesting looking drop happening over the past year. The article certainly could have described this with a bit more elegance than it did.
The logic of the article is that people want more housing up to the point in which existing owners become terrified at the prospect of losing their equity and demand action. The logic is bizarre because the behavior its trying to describe is bizarre. Economy's are extremely complicated feedback loops and housing is part of the economy.
> An increase in housing supply leads to a fall in prices, which leads to a fall in supply? No, in fact the conclusion contradicts the premise.
That's econ 101. Or even common sense 101. If something is a worse deal because prices just dropped then people are less likely to start making it. Hence the supply stops rising and even drops because some people overshot in their business plans and now they stop making it because they just found out it's bo longer as profitable as they expected.
Aren't you the one that just sees the one side of how supply curve works and forgot to check back with how the real world works?
> The author is making the classic econ 101 mistake of confusing the supply curve (which is supply as a function of price) and quantity supplied.
This seems to be just another good demonstration of Michał Kalecki's famous aphorism about how "Economics is the science of confusing Stocks with Flows".
The ones that fall fast are the ones that have just risen fast.
But seriously, real estate busts used to be booms for artists, hipsters, entrepreneurs getting started with cheap real estate. The current mall bust is also turning out to be an opportunity of sorts. And Tokyo has long shown what creativity can do with surplus real estate and capacity. Not great for investors, sure, but it can be a net win for society.
Oh, come on, man. Read the sources he points to before you invent imaginary contradictions.
> The Phoenix housing market exploded briefly during the pandemic, when demand skyrocketed amid a housing supply shortage. Remote workers relocating to the relatively cheaper city brought up home prices and values. Between February 2020 and February 2025, home prices were up 53 percent in Phoenix and 56 percent statewide in Arizona, according to Zillow. During the same five years, prices grew by 45 percent nationally.
> But the city has been experiencing a price correction in recent years, as demand slowed significantly with return-to-office orders and buying properties in the city became unaffordable for many—especially locals. "There's a mass sell-off occurring, as pandemic investors and snowbirds sell out,"
Did you know that prices can vary over time? They can go up first, and down later. That's what the article is referring to.
> An increase in housing supply leads to a fall in prices, which leads to a fall in supply?
You mean basic free market reacting to a disruption and looking for a new balance? High prices make supply go up, high supply leads to more competition and lower prices. This is basic economics, man.
The author says, increasing the supply pushes prices down which results in higher financial risks.
But then the author says we should also increase the supply… without addressing the underlying point that increasing supply creates financial instability
He addresses that in the article. In fact, it's the primary thing the article is about. Half the article is about the contradiction between housing as investment and housing as shelter.
A huge portion of why home prices dont fall is because most people dont pay for their homes up front, the actual cost of the home after the interest is 2x the total loan amount. So people dont want to sell for what they feel like is a loss.
I'd argue building more supply just makes the problem worse, since the builders almost always try to extract as much money from the potential buyers. With the internet and everyone reporting salaries most sellers price houses to extract as much money as possible included possibly expected "crypto" or other hidden sources of income.
The reality being we likely won't see a dip in home prices until the population holding homes ages out, saying there's a "housing crisis" is just spreading fear uncertainty and doubt to trick buys into unsatisfactory houses.
> the actual cost of the home after the interest is 2x the total loan amount. So people dont want to sell for what they feel like is a loss.
You're not taking a loss though; any payment above that month's interest goes to principle. If you sell, usually you take that money and kill the rest of the principle and and end the mortgage.
We have normalized the treatment of the financial and payments systems as things that exist primarily to perform law enforcement surveillance functions. It's the same dynamic that leads to debanking of small accounts - payments firms exist on thin margins and the potential fines for inadvertently servicing a bad actor are stratospheric, so it's entirely logical to play it safe by refusing to service anyone whose profile looks even the slightest bit risky.
Debanking small accounts isn't something that I'd heard of before. But debanking "undesirables" is certainly a problem.
Over here (Belgium) we have legalized prostitution, but it's very hard for sex workers to open a bank account. There's some legislation that forces banks to offer them a basic bank account (at a steep fee) if they can prove that they've been rejected by N banks. Which is a start, I suppose.
Banks have basically become an extension of law enforcement, tax collectors, anti-terrorist operations, and morality police. Which is ironic, given how many banks brazenly break laws on the regular, how absolutely depraved parties with bankers are, etc. They're hardly paragons of virtue. Yet they get to gatekeep "virtue".
I agree; but if we're bank-bashing I'd like it to be comprehensive:
What with all the attention they have to put into cooperating with the authoritarians they also aren't particularly good at their theoretical purpose, which is pooling people's money and investing it productively. We're watching an ongoing capital crisis in the West where we've been out-invested by nominal communists; it is absurd. The banking system has sticky fingers all over that mess. Then they get political protection through financial crisises where they should be taken out by bankruptcy but the powers that be prioritise having reliable people in what is effectively law enforcement rather then putting good capital managers in charge.
So, y'know. Upside is the banks do a great job of shutting down sex workers and political activism. 10/10 mark for reporting what everyone is doing to law enforcement. Downside is that turns out to be a big distraction from all the wealth creation banking can enable.
Banks are doing a relatively bad job of capital management, but they're also doing less and less of it.
Investment funds of all sorts manage the world's money. Your retail bank might originate mortgages, but it almost certainly sells them on.
The Fed doesn't want to see an overnight switch to narrow banking, where banks sell you checking accounts and money transmission services and never make decisions about investing the deposits. It has declined to approve banks that would do that. But it seems OK with presiding over a managed decline of banking into that state.
Retail banks actually don’t ‘pool people’s money and invest it’, and for good reason. Investment banks are different from regular retail banks for a reason (which is that that creates way too much risk to deposits for everyday banking).
The main business of banking is actually leveraging the capital of their owners (shareholders) to lend. Deposits are not the main game, and are there for two reasons - firstly that lending produces deposits, so banks may as well be able to hold deposits just for that reason, but also because deposit inflows create the liquidity banks need to lever up their capital. This is the real reason why banks pay interest on deposits - to encourage people to transfer money in and not transfer as much out. Actually just having the deposits sitting there doesn’t do much for the bank, so the bank more wants you to transfer money in to increase your balance and not just hold it.
In all highly developed nations (G7 or OECD), most commercial banks invest a portion of deposits into government bonds and highly rated corporate bonds. They may also deposit funds with the central bank, usually called "The Window", but the interest rate will be (usually) lower than gov't bonds or corporate bonds. The difference between the interest paid on these deposits and earnings from these investments is called the NIM -- net interest margin. (This margin also includes lending these deposits at a much higher rate of interest than they pay depositors.)
However, the phrase "invest it" makes it sounds like they are gambling the money on speculative investments! There are very strict rules about what securities (classes and ratings) are allowed as investments.
The Glass-Steagall Act, enacted in 1933, was partially repealed in 1999 by the Gramm-Leach-Bliley Act (GLBA). Specifically, the GLBA repealed sections 20 and 32 of the Glass-Steagall Act, which had prohibited affiliations and interlocks between commercial and investment banks. This allowed financial institutions to engage in both commercial and investment banking activities, which was seen as a step towards universal banking.
>Retail banks actually don’t ‘pool people’s money and invest it’,
>deposit inflows create the liquidity banks need to lever up their capital
Aren't these basically the same thing? There's complicated capital structure around how much tier 1 capital banks have to hold, and what deposits have to be backed by, but at the end of the day banks are taking money from depositors and investors, and using it to buy assets. More importantly if you deposit a dollar, that's not sitting around in a vault somewhere, it's used to buy treasuries or whatever. Most people would characterize that as "pool people’s money and invest it".
It seems like a reasonable objection, AFAIK the argument would boil down equivalently to money being a unit of measurement therefore the language is wrong - it is a bit like saying "pool people's meters" - meters are a unit of measurement as opposed to a thing. Can't pool meters, can pool meters of cloth. Especially since we don't hold the amount of wealth measured by a unit of currency steady it doesn't make sense to talk about "pooling money".
In this case though I said banking system, not retail banking system and I think the fairest reading given the ambiguity is just to treat it as "pool people's wealth" and shift to talking about the real economy.
Fiat money is a token of exchange backed up by the need for everyone in an economy to pay taxes using those tokens.
The idea it’s a measurement is appealing but incomplete, you can’t exchange abstract gallons or other measurements in the abstract only in terms of a measurement of something.
> you can’t exchange abstract gallons or other measurements in the abstract only in terms of a measurement of something.
I have an implement for doing exactly that on my desk - a cup. The people who made the cup don't know what I'm going to be filling it with but they have a very good idea of what volume it'll take up. I could go to the pub with friends and ask for a glass of something but I don't mind what. The point of a unit of measurement is it enables abstract handling of quantities. Otherwise we may as well have a unique system of measurement per thing.
And if you want a monetary example, there is barter. I can exchange $50 of work directly for $50 of food, abstracting out the money. That wouldn't be possible if the token itself were the important thing, because it isn't present anywhere in the example.
> Fiat money is a token of exchange backed up by the need for everyone in an economy to pay taxes using those tokens.
Obviously there is more than one type of money if you feel a need to add a prefix to explain what type of money you are discussing. The other types aren't backed up by a need for everyone to pay taxes, money can exist independently of a taxation system. Then it is called non-fiat money. You're focusing on the non-monetary aspects of the system, which is cool and all but missing the forest for the trees.
> I could go to the pub with friends and ask for a glass of something but ai don’t mind what
You’d very much mind you got a cup of bull sperm or diarrhea. That request is actually excluding the vast majority of possible liquids.
> if you feel the need to add a prefix
There’s only two types of money, fiat and barter.
If I’m exchanging a promissory note that I can exchange for 1 barrel of wheat or 1lb of gold or whatever that’s barter through an abstraction. If you’re using stamped gold coins people are just bartering precious metals of a known purity thus the need to weigh the coins not just count them.
> You’d very much mind you got a cup of bull sperm or diarrhea.
Dear me. That got a good 5 minutes of chuckling out of me if you are aiming for humour. In the alternative I'm probably too far away to offer you a hug, but if you're having a bad day it might be a better bet to try going for a walk or some meditation rather than posting on HN.
> If I’m exchanging a promissory note that I can exchange for 1 barrel of wheat or 1lb of gold or whatever that’s barter through an abstraction.
The interesting implication of that is if you turn up at a foreign airport, change currency and buy a doughnut you couldn't be sure whether you're bartering or not until you've done some detailed analysis of the local legal system.
Either which way, if you want to call it barter through abstraction I can't stop you but we have a word for that - money. The reason most people use money is to abstract the bartering away whether they are in a fiat system or otherwise.
I’m glad you got a chuckle out of that, it was intended to be humorous while also countering your argument.
> I’d you want to call or barter through abstraction I can’t stop you
I was calling it money, but it’s really a spectrum. Is a coupon for a free burger money? What about gift cards?
IMO, it’s money when it’s worth more than the underlying commodity. Stamped coins were a net benefit by being of known purity and promissory notes benefited by being easy to transport. So people mostly didn’t melt the coins down or exchange the notes because easy of trade is inherently valuable on its own. At the other end wasting time exchanging or melting it down is a net cost.
Which in a roundabout way means using money is never barter. Non fiat money has a separate floor on value, but the actual value is generally set the same way fiat money is.
If the entire picture was so dark nobody would have used banks for anything, all across history. The banks were created by those having the means to open banks, not by charities, so it should be obvious that they will serve primarily their masters. You could make a similar argument for crypto: it does help some people to send money to the back of Africa, but is mostly enabling scams. My point is, the more there's money involved the darker the picture. If only we cared enough to make it better, but it's all boiling the frog.
> We're watching an ongoing capital crisis in the West where we've been out-invested by nominal communists; it is absurd.
I personally would lay far more of the blame at the feet of the slow-but-steady disassembly of a proper tax code which has rendered our Government all but unable to function from a fiscal perspective since the Reagan years. I'm curious if you would feel the banks are more responsible, and if so, how?
Everything I've read on the subject over the years pretty squarely lays it at the austerity movements that have utterly crippled most western countries but none more thoroughly than the United States, where the notion seemingly of spending any public money on anything no matter how needed that isn't Defense spending is Communist, alongside of course the general (and consequential of that) transfer of wealth from the working class to the extremely wealthy who dodge more taxes than ever before, perhaps in all of history of the practice of collecting taxes.
> I personally would lay far more of the blame at the feet of the slow-but-steady disassembly of a proper tax code which has rendered our Government all but unable to function from a fiscal perspective since the Reagan years.
There is not any kind of material long-term discontinuity initiated in the Reagan years. It has been approximately flat since the end of WWII, which implies a growth in real government revenue per capita consistent with the growth in real GDP per capita.
This chart is only federal receipts, not state; the total of the two in the US is ~30%. Countries that have taxpayer-funded healthcare systems have a higher total on paper because the cost of the healthcare system is then in the accounting as government revenue rather than private insurance premiums, not because they're doing significantly more non-healthcare government spending. In reality the US government spends more on non-healthcare government expenditures than most other countries because it runs such large deficits.
> Everything I've read on the subject over the years pretty squarely lays it at the austerity movements that have utterly crippled most western countries but none more thoroughly than the United States, where the notion seemingly of spending any public money on anything no matter how needed that isn't Defense spending is Communist
What's really going on here is that the government is already extracting approximately the amount of money from the economy that maximizes medium-term government revenue given the trade off between revenue extraction and GDP growth.
But the government is thoroughly captured by lobbyists, so every dollar the government spends on something that actually benefits the population is a dollar that isn't going to a well-connected government contractor or a union that wants a wasteful boondoggle and can shift enough votes for a representative in a vulnerable district that the party will sell out the general public to secure that seat, or to vote buying from retirees that has now reached the point that US Government spending on retirement benefits consumes more than half of all federal receipts and goes disproportionately to affluent retirees.
Which makes it hard to pass useful programs because you have to fight the incumbents for the money.
> alongside of course the general (and consequential of that) transfer of wealth from the working class to the extremely wealthy who dodge more taxes than ever before, perhaps in all of history of the practice of collecting taxes.
This is also a mischaracterization of the change that happened during the Reagan years.
If you look at nominal tax rates, on paper they went down under Reagan, but then you look at federal receipts and in 1979 they were 17.6% of GDP whereas in 1989 they were... 17.6% of GDP. As opposed to today, where over the last five years it has been in the range of 16% to 18.8%. Or the 1960s and 70s where it was in the range of, well, ~16% to ~18% of GDP. It really hasn't materially changed at all.
What changed under Reagan is that prior to that, tax avoidance was much easier. People were deducting everything. When they lowered the nominal tax rates, they also closed so many loopholes that the effect of the rate reduction on government revenue was zero. Which is to say, the amount of tax dodging is much lower now than it was historically.
Dictatorships (which is what communism always amounts to in the real world) are always good at big visible projects. they fail because things not on the dictators 'radar' don't get anyones attention as there is no reward for small projects that keep the world running until the dictator notices the lack. If the dictator doesn't notice the lack you have to be really good at marketing yourself if you do them otherwise you will be 'purged' for wasted effort when you do them.
Usually its just the corrupt dictators uncles 2nd nephew rerouting all the funds so basic maintenance cant be done. New projects are always "planned", there are enormous models, cgi movies of cities on endless loops and thats it. Oh at 6:00 clock the septic truck arrives.
It is a myth that dictatorships are good at big projects. Just consider the history of atomic bomb. If not the access to the spied US blueprints Soviet Union would be much delayed with own version. Then it took China about 10 years before they could test the atomic bomb even after receiving initially a significant help from Soviet Union.
Or consider sending a man to the Moon. Soviet Union eventually abandoned own efforts and was able to create a rocket with similar capabilities as Saturn V only in 1986.
Or consider that the best semiconductor production process comes from a Taiwanese company followed by South Corea and US. China is still not able to catch up despite all the efforts.
Or consider high speed trains. It was Japan and Europe that developed comprehensive network first, not China. And Soviet Union and later Russia never came close to implementing anything like that.
I never said that non-dictators cannot do big projects. I said that dictators tend to do them as well as anyone else. Big projects don't always go well for anyone, you can find plenty of big projects that fail in the US. Dictators can lose interest just as much as anyone else.
The point is dictators fail most often by ignoring things they consider small and not letting someone else take care of it.
The space race first astronaut (cosmonaut) was Yuri Gagarin, and Laika. Stating the space race was lost by Soviet Union is myopic at best. The Soviet Union defaulted due to being unable to compete, the costly Afghan War, and the inefficient system. But nowadays, how relevant are NASA and BMW
?
The liquidators of Chernobyl [1], to name another example. Another feat is winning the Great War. Shenzhen is also one of a kind. Where is the West's Shenzhen? China's equivalent of F-35 (J-10) shot down two Dassault Rafale a couple of days ago.
Far fetched in West? We got corruption, too. We got Boeing, and Trump.
As for train system, Russia's main transportation is via train and it is robust, but slow. That happens when your country is such a vast amount of land, without solid (direct) sea connections.
But in general, it is a myth, albeit a different one. It is part of the myth (façade) of the strongmen.
Chernobyl was a direct consequence of a dictatorship in the first place. A reactor with positive reactivity would never be designed unless ordered from top. And handling the consequences in the first hours Soviet style made things inherently worse.
As for other counter examples I do not claim that democracy is inherently better. Rather that for big projects at least it is not worse than a dictatorship.
Have you considered that (a) communism != dictatorship, while there have been many capitalist dictatorships, often U.S. sponsored and (b) succeeding in big projects is a lot easier when you're rich, which surviving ww2 unscathed and exploiting the world will make you?
Capitalism is a straw man invented by communists to mean whatever they want to tear down.
Fascism is not capitalism - fascists don't even think in economic terms except how it helps them.
I'm a classical liberal. Something like capitalism derives from liberalism, but it is derived from freedom of the individual, and not a value in itself.
Capitalism specifically means: an economy oriented around private ownership of the means of production. There is a world of implication from that simple statement.
Fascism is what happens when workers get too "uppity" and the upper classes decide it's better to let a strong man reign in the lower class via a combination of spectacular appeals, mythology, militarism, crackdowns, and external expansion. Working conditions in Nazi germany were terrible because they destroyed labor unions. Fascism to a great extent is operationalized anti-communism.
Communists like myself also value the freedom of the individual, but we value the freedom of all individuals and want to make it real, not a thing you just say and then shit on a homeless person or abuse an employee.
Freedom of the individual is not compatible with communism. You can value some freedoms but all right to property is lost - something I value. (I don't allow freedom to murder - but I still value freedom more than communism can)
fascism is not an ecconomic system, and very much can be communist - though of course none of who we think of as fascist were communists.
" fail because things not on the dictators 'radar' don't get anyone's attention"
Funny, because in the US right now, if something isn't on this one particular person's radar, then its is ignored. So by this reasoning, the US is a dictatorship right now.
Probably because it's one of those industries where legalizing it still attracts a large enough black market (human trafficking is a huge thing) that it's easier to just blanket ban it than try to separate the legal from the illegal
I thought EU has a civil right to a basic bank account. (Please correct me if wrong.) Literally, if you are a convicted violent criminal, they cannot deny you for basic bank account (after released from jail). If sex work is legal and these rejections are actually happening (this is the Internet after all), I cannot believe that a Belgian law firm has not taken the case on pro-bono to sue a bunch of national banks that refuse to open accounts for sex workers. Again, if the rejections were true, it would be easy to build a case. Sure, you might be rejected at lower court levels, but then you can climb (after many years) to the European Court of Justice. I am sure they will agree: These legal sex workers have the civil right to bank in any EU jurisdiction where they are a legal resident.
I just Googled for: sex workers denied bank accounts in belgium
> Since summer 2023, a new law has extended labour rights also to sex worker employees, including rules around working hours and payment, the right to refuse clients and the mandatory availability of emergency buttons in every room. The new law also decriminalises third parties, who will no longer be penalised for opening a bank account for sex workers or renting out accommodation, and it allows sex workers to advertise their services.
To be fair: Your comment was true in the past. It looks like there has a been a recent turn of events.
As a consequence of banks effectively being responsible for enforcing some laws, they are required to know where their customers' money comes from. They present new customers with a very long list of questions, including what your profession is.
I guess that means that banks, in a way, have a database of sex workers.
These companies aren't public utilities, no one would complain about a US bank not doing money exchange business with entities in the Ukraine or Belarus, why would that be different for US companies offering donations over the Internet? The fact is that all platforms that facilitate cross-border money transfers between two parties without clear services or good being exchanged are used for all kinds of money laundering, and governments try to contain that for good reasons. In the end they probably don't care much about the revenue they make in these countries as it's probably negligible. Again, their good right to do so, I don't see any issue with this at all.
The article claims that funds were held after being donated. That certainly goes way beyond "not choosing to do business". The claims were refuted by BuyMeACoffee, which changes things.
But if I, as a donator, donate money to someone using your service, and you then don't give that money to its intended recipient, you've effectively defrauded me. Had you said in advance "I can't do that, because you're trying to give me money to $foo which I don't support", then that is your right as a business.
What's wrong with a US bank sending money to Ukraine? Sure, they might ask for an explanation, but I doubt they will reject. Example: You need to send money to a family member (immediate or extended), or want to donate directly to the national treasury (yes, you can do this), or another war-related non-profit. These are all legit. There is probably more risk in money transfers to Bulgaria or Romania, due to online scammers. Belarus is a wholly different matter. They are one step away from Russia-level sanctions, due to aiding Russia during the invasion of Ukraine.
The occupied parts of Ukraine are under sanctions and presumably banks are concerned they can't differentiate the precise destination in country. Safer to just blanket deny everything.
> What's wrong with [...] You need to send money to a family member (immediate or extended),
I tend to agree, but the same applies if one family member is in Belarus or Russia, and the other one is in the USA.
I.e. just because it's morally ok, it doesn't mean that it's without risk (if you lie about the purpose) and that the banks will facilitate it.
OTOH, before EO2022, I know that transfers between Russia and countries in Europe were sometimes still happening. Disappointintly (but it's not very surprising), sending small money to family would usually be impossible, but if you had to transfer substantial amounts of money, and you could prove that it was from e.g. sale of a home, that could still happen.
On one hand, that makes sense: the bigger the amount, the more it makes economic sense to allow extra time and effort to check that all the i are dotted and all the t ate crossed.
But OTOH, the people with lots of housing property are sometimes precisely using housing to launder the provenance, and they are also not necessarily the honest workers whose family end up split across borders.
Of course, people would complain about a bank not doing money exchanges with Ukraine or Belarus. Moreover, payment system providers, money transfer systems, and banks are to some extent public utilities, especially when there are no viable alternatives. They are essential for business.
> no one would complain about a US bank not doing money exchange business with entities in the Ukraine or Belarus
Frankly, it's none of my state's damn business who I exchange money with. Their beef with other states is their problem—why are they dragging us through their bullshit?
If they want to collect taxes on it, at least that has the veneer of doing their job properly, and I'm happy to pay it.
if someone, for example, exchanges funds with a foreign nation to evade sanctions while they illegally occupy another, it really is their state's business.
Only because the state asserts their existence with violence. We certainly have little-to-no say in how the states in which we live behave, but we're all subject to their whims.
Personally, I have little patience for the pretense that the geopolitical theatre we're all subjected to reflects the people who live in the states represented in such theatre. Baudrillard had it right all along.
Only because the state asserts their existence with violence.
I'm comfortable saying if a foreign nation rolls military vehicles across a border and starts shelling apartment buildings, those buildings' residents have every right to assert their existence with violence.
We certainly have little-to-no say in how the states in which we live behave, but we're all subject to their whims.
I can't say for certain how much my state listens to me specifically, but if they do, I'd tell them their whims should be such that other states can't do the roll-across-border-blow-up-apartments thing. (to anyone, not just me.) Those are good whims. Everyone should be subject to those whims.
> I'm comfortable saying if a foreign nation rolls military vehicles across a border and starts shelling apartment buildings, those buildings' residents have every right to assert their existence with violence.
Of course, I have nothing against sovereignty. I just think states greatly overestimate what they're owed for simply not mowing down their own citizens. If my state causes another state to invade me, of course I'll side with the invader—my own state has failed me.
Btw, crypto (like bitcoin) is only an alternative because of convention.
The complete history of bitcoins is globally trackable, and people could all decide that they'll pay more for bitcoins that came from Satoshi's initial hoard, or that they'll refuse to accept bitcoins that were ever seized by the FBI.
(Yes, there are mixers. But you'd just refuse to accept any bitcoin that took part in the mixer transaction, if any FBI coins were in there.)
In the US, cash purchases became a lot less common during the pandemic for obvious reasons, and it never really bounced back. Businesses were hardly ever credit-card-only before, now it's not that uncommon, and cash-only ones are way less common than before. Maybe related, several areas raised their sales tax beyond 10%.
It is enforceable, it’s just that not all countries are there yet. It’s practically impossible to buy anything worth more than 1000 eur with cash in Scandinavia, ironically with the exception of drugs. Humanity is on a steady track to a world where authorities are controlling every penny, at which point non-sanctioned opposition is impossible.
Which is trivial to ensure when people effectively can’t deposit cash to their bank accounts and businesses don’t accept cash - nobody wants the headache. Which is exactly what happened here.
You are allowed to travel abroad with under 10 000 euros without declaring it. As far as I know we do not have the same problem with asset forfeit laws like the US. There are no laws limiting how much cash you can have at home and while travelling. Though if you hoard millions in gold that is discovered in a police raid I think your main concern will be why the raid happend.
In the EU, laws differ by country, so I wouldn't categorically declare that it's legal everywhere to have any amount of cash at home or traveling. From incidental local news reports here in the Netherlands, I suspect that if I were found during routine checks to be traveling with multiple-10k cash in my backpack or in my car, it would be seized and be treated as illicit until I prove otherwise.
> Yes, there are mixers. But you'd just refuse to accept any bitcoin that took part in the mixer transaction, if any FBI coins were in there.
Intentional mixers aren't even the half of it. You have large exchange operators that use a single wallet. They file KYC paperwork with governments, but that's not in the blockchain. From the perspective of the blockchain their whole exchange is one big mixer. A billion dollars goes in, a hundred was tainted, a billion dollars comes back out. The only information to trace which $100 that went in is the $100 that came back out isn't in the blockchain, it's in the exchange's private accounting database.
But if you propose to taint every coin that has ever passed through a major exchange, that's pretty much all of them.
> But if you propose to taint every coin that has ever passed through a major exchange, that's pretty much all of them.
All new ones. You can buy 'fresh coins' from miners directly.
You could also exempt some 'honourable' miners (ie a whitelist) from the taint.
All kinds of conventions are possible, depending on what people want to value.
The convention that all bitcoins are equally valuable is just that: a convention. And it's not even strictly adhered to, because some bitcoins are already more valuable than others.
> All new ones. You can buy 'fresh coins' from miners directly.
Putting aside that there are a finite number of Bitcoins that will ever be mined, what good is that? You'd have "untainted" coins that you could hardly even spend without immediately tainting them because six degrees of Kevin Bacon means that everybody else's wallet has already interacted with the unclean.
> And it's not even strictly adhered to, because some bitcoins are already more valuable than others.
Is it the tainted ones that are the more valuable ones because you can still exchange them for the same number of dollars but they also have additional value for trolling people by sending trivial amounts of them to their untainted wallets without their permission?
> Putting aside that there are a finite number of Bitcoins that will ever be mined, what good is that? You'd have "untainted" coins that you could hardly even spend without immediately tainting them because six degrees of Kevin Bacon means that everybody else's wallet has already interacted with the unclean.
You can make an arbitrary number of new wallets. Some people even suggest making new wallets for each transaction.
I'd like to introduce you to Monero, which isn't globally trackable and also properly fungible so you can't refuse mixed transactions (since all transactions are protected).
Apparently "Liberty Reserve" was a (now defunct) digital cash service. As in you'd mail them cash and they'd add it to your account, and you could withdraw and they'd mail it back, minus a fee. And you could log in and transfer it.
Apparently it powered online drug marketplaces before Bitcoin existed.
You're not wrong. But Liberty Reserve was able to be shut down because it was centralized. Banking regulators in various western countries leaned on the Costa Rican authorities to shut it down.
Try doing that with crypto. Who are you going to arrest?
Every on- and off-ramp provider. EU legislation has basically created a database of real person to wallet mappings (for some subset of wallets). You can't take money from a wallet if you don't know who it belongs to (if you're an exchange anyways). The checks are a bit soft (ie. self attestation and stuff), but the public ledger part of crypto makes tracking far-far easier than with traditional banks.
The end game for this is that people in the West (and whoever they can pressure) won't be able to buy crypto to buy drugs or sell it when selling drugs, making it useless on a big scale.
This is essentially the purpose of localmonero and similar offerings. Trading cash for Monero in a p2p manner is going to be extraordinarily difficult to halt.
First, the chain only sees the monero side of the transaction, not the fiat side, of which it's likely that no records exist at all after a short while. It looks identical to a payment for a good or service and it also looks identical to a transfer between two of the same person's wallets.
Second, Monero is still thought to be untraceable. In fact regulated entities are banned from exchanging it in the EU precisely because they can't trace it. (Zcash is also banned under the same law, but is considered technically inferior because not all transactions are private.)
Third, what do you even mean? Do you mean they'll go back to the last time those coins passed through a regulated on-ramp, and prosecute that person? For what? Buying cryptocurrency, then buying a legal product with cryptocurrency, is not illegal, and even if the product was illegal, the government most likely couldn't prove that. Also, the on-ramp was probably in a different jurisdiction. Perhaps for something like "acting as an unlicensed money transmitter" which is a thing they have done against users of cryptocurrencies. If they prosecute that in large quantities, will it fly?
Or do you mean they'll wait until someone takes the crypto to a regulated off-ramp, and then prosecute that person? For what - undeclared income? As far as I know, trading one cryptocurrency for another is a non-taxable currency exchange, at least in some EU countries, so they can't get you for that. And what if they declared it? Again, they might try "acting as an unlicensed money transmitter" of course. What if it never gets to a regulated off-ramp and just circulates peer-to-peer forever? It's more likely tyou think, since remember, regulated off-ramps are strictly banned.
> The end game for this is that people in the West (and whoever they can pressure) won't be able to buy crypto to buy drugs or sell it when selling drugs, making it useless on a big scale.
I agree with you on targeting the on- and off-ramps. But I think you got your use cases wrong.
Crypto has two major use cases these days:
- speculation (aka gambling)
- ransomware payments
Buying drugs is pretty far down the list. And so are pretty much all purchases of normal goods and services.
If law enforcement started arresting larger actors (traders, managers of exchanges, etc) and continued working their way down the list, it wouldn’t take long to have a chilling effect on crypto.
The difference is that with actual cash you give cash directly to someone. With "Liberty Reserve" you introduced a third-party that did this for you. These things aren't the same.
With crypto you don't hand over your coins to a third-party for safe keeping, you instead send coins directly to one another, just like with cash.
Hence my restriction to crypto that is 'like bitcoin'. Yes, you can use some tricks like zero knowledge proofs to make untrackable crypto-currencies. But as far as I can tell, they aren't all that popular. For currencies that offer both stealthy and 'regular' transactions (I think like zcash), the vast majority of transactions are of the latter kind.
That's already the case. Some collectors already pay more for specific coins. While some other people buy their coins for investment only directly from miners, so they don't have to worry about who else might have held a coin.
This is a major reason (maybe the major reason) crypto keeps going up. Many people want money to avoid government oversight - for reasons both benign (e.g. avoiding having money confiscated arbitrarily) and nefarious (everything from tax avoidance to funding crime and war).
Not long ago we lived in a world where currency from anywhere other than the nation you were in (or maybe somewhere close by) was impractical to use on a daily basis. Things have changed now and the government's use of money as a tool to keep control of citizens is loosening. For better and worse.
2025 Chainalysis Crypto Crime Report ... The authors have so far tracked over $40bn of crypto transfers to illicit addresses made in 2024, though they reckon the final total will be north of $51bn.
That seems like a pretty insignificant number? World GDP is more than $100T. $50B is one half of one tenth of one percent, and even that is a significant over-counting because it's a measurement of revenue rather than profit and is counting all transactions to a given address regardless of their nature and potentially double-counting them.
Some drug dealer is making $20,000/year selling drugs, but the drugs are sold for $50,000 because they had to spend $30,000 on grow lamps and electricity and rent in order to produce them. The same drug dealer also uses the same wallet to sell ordinary lawful gift cards for cryptocurrency and they only make $5000 from that but it's against revenue of $200,000 because the markup on gift cards is small.
For that they're attributing $250,000 of "crypto transfers to illicit addresses" to this person but there was only actually $20,000 of unlawful gain. Overstating the problem to demonize the target.
This seems like a big number, until you compare it to the regular economy:
"The estimated amount of money laundered annually worldwide is between 2% and 5% of global GDP, that is, something between US$ 800 billion and US$ 2 trillion."
Crypto isn’t an alternative to a bank. Not any crypto I’ve seen at least.
The primary purpose of a bank is to issue debt. That’s why they were created. A bank has to be able to “print” money to issue debt. This isn’t a flaw as some crypto fans like to think, it’s a very important feature. Debt issued by banks replaced the informal promise-based debt people used before we had banks. You didn’t need money on hand, or to borrow some coins from some rich dude, to get help building a barn. You got help from people in the village in exchange for some other goods or service you’d provide them in the future. Bank issued debt with “printed” money is the replacement to that, and it only works if money can be created on demand.
Crypto can’t “print” money on demand, by design. So it can’t replace banks.
One of the things banks do is to issue loans. That's fine.
Another thing banks do is, Alice is in New York and wants to pay Bob who is in Miami, or Kyiv, so instead of getting on a plane with a sack full of Benjamins she tells the bank to send money to Bob. Cryptocurrency is clearly an alternative way of doing this, with the advantage that then there is no middleman to refuse the transaction when the bank is being leaned on by a despot.
Bitcoin can't, but defi can. An entity can issue a ERC-whatever token that acts as a bond, minted in exchange for whichever other token (e.g. ETH), and redeemable for that plus interest at their discretion (e.g. you could create a redeem queue). The bonds can be traded in secondary markets immediately upon creation - no need to file for listing (you need to create a swap pool and seed it with a little of each asset though).
An important difference is that your new token can't ever be confused with base money. In banks, we have base money, and we have bank money, and we pretend they're the same thing because banks are pretty reliable (not 100% but pretty). In crypto, the system won't let you lie like that. (Though you can create another new currency backed by a mix of currencies - this is what DAI does.)
Another important difference is trust. I can easily issue bonds in the real world and then just run off with the money and not repay them. If I try, a lot of heavily armed men will hunt me down. That doesn't really happen in crypto, and as things are now it can't happen, because if you make your identity and location known and issue crypto bonds, the same armed men will hunt you down for issuing crypto bonds instead of ordinary bonds, which is a crime itself (see what happened to Kik/Kin). So you'd have to stake something else to make people trust you.
Bitcoin is trustworthy. Monero is trustworthy. Ethereum is relatively trustworthy, but if you make a transaction that Vitalik doesn't like, he forks the whole coin to roll it back.
Is Binance Coin trustworthy? Hell no (but it's fast and cheap - because it's centralized all the transaction limits are turned up to 11). Is Terra trustworthy? It's a neat idea if it works - real-world evidence proves it doesn't. Is Jarwain-Immibis Bond Token trustworthy?
Unfortunately, for most people, all coins get rolled up into "crypto" and "nfts" which share reputation.
As for Jarwain-Immibis Bond Token, well that depends on how one assesses trust, which in the most cynical sense comes down to the repercussions involved in breaking the bond.
> The primary purpose of a bank is to issue debt. That’s why they were created
Yes
> A bank has to be able to “print” money to issue debt
Absolutely not, especially not in the context which you just said ("that's why they were created"). When the banking industry started in various Italian city states, money was state issued and backed by precious metals, and banks didn't create any new money supply. They gave loans, invested, kept deposits, etc. but without touching the money supply, which was managed by sovereigns and sovereign states.
A lot of people misunderstand what creating money means in the context of fractional reserve banking. Banks "create money" every time they make a loan backed by a deposit. They're not literally creating new money. This is how it works:
- Alice deposits $100 into the bank. The bank owes Alice $100.
- Bob wants a loan. The bank offers him a loan of $50, backed by the $100 from Alice. The bank owes Alice $100. Bob owes the bank $50.
- Bob withdraws the $50 to spend on coke and hookers. The bank uses $50 of the money deposited by Alice to give to Bob. Bob has $50. Alice still has $100 balance.
The bank has just created $50. Everyone is happy unless Alice (and everyone else) wants to withdraw their money and they aren't able to get it back from Bob. That's a bank run.
All money in the bank is created by the bank. When you deposit $100 of physical cash (money) into the bank, the bank creates a $100 bank deposit (also money) and holds $100 of physical cash (money) in its vault. There is now $200 of money.
The bank may buy a government bond with it. In that case there's $100 of physical cash (money) that the government has, a $100 government bond (also money) that the bank has, and a $100 bank deposit (also money) that you have. There is now $300 in total.
Stacking money on top of money is fundamental to the economy. Normally (and enforceably in cryptocurrency systems) the different layers may not be confused, nor may different assets at the same stacking level. But it benefits whoever is creating the higher layers when you confuse them with the lower layers. When people widely bank deposits with base money, this benefits the banks because now the money they print becomes almost as good as base money. When people widely confuse government bonds with base money, this benefits the treasury because now the money they print becomes almost as good as base money. If people were to widely confuse Apple stock with base money, it would benefit Apple and its existing investors.
(Base money doesn't have to be gold by the way. It's anything that's issued without underlying value and widely accepted as a store of value. Fed notes serve as base money just fine. They have about as much actual real-world value as gold bars, which is none.)
Another way to see it is that physical $100 has $300 of value.
But eventually, Alice wants her money back, the bank cashes in the bond, the government repays the cash.
So part of that value is the value of trust as a function of time. Trust in the bank, trust in the government, trust that they'll pay back their debts on a defined schedule. Plus interest.
Yes, stacking money is based on trust. Realistically, a 6-month $101 government bond which costs $99 should be valued about $100, and a bank deposit stacked on $101 of government bonds should be worth about $100, as long as trust in those continues to hold. And this sort of thing does happen in cryptocurrency systems. Stablecoins generally trade for a fraction of a cent less than their corresponding fiat currency. Bonds may trade for more, if the promise of interest is accepted, but less than their redemption value.
That's not what the reserve requirement means. In this example it means the bank needs to reserve 10% of the deposit, so it can lend $90 to Bob. Now Bob can then deposit that money with another bank, which can then lend it out and so forth, giving a compounded effect on the whole banking system a lot beyond that, but the bank can still only lend $90 backed by that deposit.
The future of legitimate activity is that it will be performed on the same platforms designed to protect criminal activity, because it will be treated as criminal, despite not being so.
If BuyMeACoffee was run like a dark web drug marketplace, it could support every country.
This is a strange viewpoint considering that crypto is 100% reliant on some of the most complicated and high-maintenance infrastructure ever built by man: the internet.
If "everything else fails" the internet has failed, and crypto will be worthless. Gold will probably still have some value, unless shit really hits the fan.
We’re talking about different “everything else fails” scenarios. Basically, I’m concerned about my bank accounts being frozen (happened with my Revolut account for example).
Ah, yes, the classic 3-2-1 method: three accounts in two different countries, one of them being an offshore. Yeah, I’m doing all that (not the offshore part... at least not yet).
The "incident" has to be pretty severe for you to be debanked in multiple EU+UK countries. Little less than terrorism would do it (I was going to say coup attempt might, but the Catalan leaders who tried to illegally secede from Spain didn't get debanked, so probably not).
Remember that Germany considers not liking the Gaza holocaust to be terrorism, and has issued Schengen area bans against EU politicians for this crime.
Strictly speaking, directed energy is the ultimate. Both crypto and gold are both just embodiments of energy, gold being the physical embodiment (via mining and refinement) and crypto being the virtual embodiment.
Not really. Gold has no more energy than carbon per gram. E=MC^2. And total energy is unavailable. Carbon had more available chemical energy. (Why we can burn coal not gold).
Bitcoin doesn't store any energy.
Bitcoin is like a F1 car going around a track forever, with your name scribbled on it.
Both gold and bitcoin are a variant of "proof of wasted energy" or more euphemistically "proof of work". Why that makes it valuable is beyond me, but it isn't really a new thing considering the historic value of gold being much more than its utility as a material.
Maybe I didn't explain it well, gold and bitcoin are the 'memory' of used energy, they are not energy sources themselves.
I think of them as representations of the idea that energy is (currently) so abundant and cheap that we can waste it on mining things like gold and crypto, a fundamentally ridiculous concept in terms of real actual human needs.
Once that stops being the case (when fossil fuel starts running out globally), the whole thing - cash, gold, crypto, stocks, bonds, property - everything falls apart.
Bitcoin isn’t valuable because of used energy. The energy here is just a way to limit the rate Bitcoin is produced, and to help prevent double spending.
Bitcoin is valuable because people accept that it’s valuable, same as with cash, gold, crypto, stocks, bonds, property. The price of an apple is $2 is because I offered it to you for $2 and you bought it.
Almost. Bitcoin energy use is a way to have a decentralised trust less network. If bitcoin was free to mine the most money would go to the most nodes. It would be proof of DDOS in a sense and would probably seize up pretty quick.
Gold is a bit different. You could stop mining it today entirely and you could still have a gold currency. Stop mining bitcoin and it all effectively disappears!
The people appreciate the value exactly because of used energy (entropy), if you want to rewrite Bitcoin history you are going to spend no less then it has boon spent. The limit of producing of bitcoins is not related to energy.
Yeah. I mean, people value the utility of it: it can be used to transfer value over the Internet, and you can’t steal it by changing values in the DB. PoW is just a means to an end here. I think we largely agree on that.
You could make eimrineCoin that's an exact clone of bitcoin, but it'd be extremely unlikely to reach a fraction of BTC's market cap, because others won't consider it valuable although it's mined with energy.
Which is why I have a couple bank accounts. If these banks decide they don’t want to work with me anymore (happened a couple times already), or if they decide they don’t want to send money to, say, a particular country (hint hint), I’ll have crypto as a last resort.
(You conveniently left out “cash” from your reply. Cash. I’ll buy groceries with cash, if I can’t use my card.)
And it varies from country to country. (In any case, I wouldn’t use BTC for everyday purchases – it’s too volatile, and transfers are too expensive. As long as we’re stuck with fiat-based economy, stablecoins are the way to go, IMO.)
there is invariably a vantage point at which non-fiat payments are accepted. this may be crypto, given that there is still infrastructure available for it to operate, but that's unlikely imo.
Correct in principle but not all that insightful because it's something almost universally true. "Fentanyl! Ads! Widespread surveillance! Can be good or bad".
You have to look at the reality. Crypto has been used overwhelmingly for scams and crime.
There are transactions happening all the time in regular cash for weapons, drugs etc. Large banks have been found to be knowingly processing funds from terrorists, drugs dealers and have got fines. If you anti-war, you would also include the wars that are financed partly by the ability to print money.
These transactions while not the majority of transactions I would wager is far larger in terms of dollar value that the whole crypto ecosystem.
The reality is that criminals will find loop holes in a system and they will exploit it if it is worth exploiting. Many of the checks done in banks now impede transactions. I was buying a car (private seller) and I couldn't transfer the cash without going through a fraud check, even though I had signed the transaction with a card reader in the app. It turned a 30 minutes of test driving the vehicle and checking docs into 3 hours of wrangling on the phone. BTW I am not the only person having these problems with banks in the UK.
As for what crime we are referring to as well in this scenario needs clarifying as well. I suspect that most of crypto transactions are through darknet drug markets. These markets reduce the risk of violence to basically zero when purchasing drugs. While I am not one of these people that is pro-legalising all drugs, the reality is that people are going to buying them.
I think at this point it would be preferable for the government to take over the payment infrastructure directly. This is often seen as dystopian, but it's a dystopia that has already come to pass for the most part. If we made it official, at least the rules for what can be blocked or refused or frozen would be out in the open.
The best disinfectant doesn't kill everything. Nobody's ever managed to assemble a government that doesn't do awful things out in the open.
One of my complaints about the Trump era is people are correctly identifying a bunch of problems with how the US government operates but for some reason they're only a problem when Trump does them instead of being a more general concern even if other people are involved.
Eg, Trump is almost certainly spying on his political opponents. Using infrastructure built by Bush/Obama/Trump/Biden that everyone who took notice at the time pointed out would be used by people to spy on political opponents. This isn't a Trump problem. It is people assuming the government is always on their side despite copious quantities of evidence otherwise and regular elections.
I'd be pretty likely to agree with you, but I have you tagged as "pro-Musk". If you think an unelected oligarch wrecking everything with his hand-picked kids is an improvement over government, I dunno what to tell you.
I suspect people wouldn’t actually like the alternative. An alternative world where it’s relatively easy to get an MTL, or consequences for AML aren’t huge, looks a lot like crypto. Imagine banks and money processors doing rugpulls or going bust.
> PRC banned exporting Bytedance algo. By that logic, no US companies are independent private companies due to US export controls. And TBH both points are true.
Chinese state control over private companies is far more pervasive, and less bound by rule-of-law, than that of the U.S. Export controls are not even the H2O molecule at the tip of the iceberg.
> Even PRC has never forced a US company from divesting US ownership
Bytedance is not being forced to divest; they can leave the market, just like Google and many others had to leave China.
US spectrum export controls have been every bit as pervasive as PRC ones, pretending muh "rule of law" is a distinction without difference at this point. It's functionally the same.
>forced to divest
If US law is forced divestiture, then Bytedance is "force" to leave, because having US nationalize a PRC company is obviously a nonstarter except for the terminally stupid like noahopinion. Unlike Google + western platforms who "chose" (read: not banned) to leave because they "chose" not to comply with PRC laws that applies to all companies, including domestic PRC ones. The difference is US has no equitable law, i.e. some sort of data privacy law, that enables Bytedance to operate in US... while following the same laws that US companies do, as if Bytedance wasn't already bending backwards following additional requirements that US platforms do not have to follow (i.e. functionally Oracle JV).
Like fine, Bytedance needs to follow US laws, except US laws is designed specifically to prevent PRC companies from operating, vs PRC laws is designed to allow everyone to operate, just said operation is onerous - see retarded reciprocal argument that US companies should operate in PRC without abiding by PRC censorship laws that domestic platforms has to abide by. There's a reason FB and Google had internal programs to re-enter PRC market compliant with PRC laws (before being axed by internal dissent), because it's still feasble for US platforms to operate in PRC while being US (or at least JV) owned. So let's not pretend what US is doing is the same thing - PRC is more rule of law, US rule by law in this comparison. But again, functionally that hardly matters.
> US spectrum export controls have been every bit as pervasive as PRC ones, pretending muh "rule of law" is a distinction without difference at this point. It's functionally the same.
As I said, export controls are such a minor part of the problem as to hardly be worth mentioning. The pervasive control I'm speaking of is things like the fact that ByteDance (like all large Chinese companies) would have an internal CCP committee with influence over personnel and strategic decisions.
> having US nationalize a PRC company is obviously a nonstarter except for the terminally stupid like noahopinion
This is wrong on many levels. No one is talking about nationalizing TikTok (which is not a PRC company) and certainly not ByteDance.
>CCP committee with influence over personnel and strategic decisions
Party committees as part of 93 company law basically creates dumb shit like organizing staff picnics for companies with more than 3 CCP members, which is basically any reasonably sized company since 1/8 of country are CCP members. It is much more minor than export controls. The "pervasive control" exists in the sense that there is higher level coordination like META having US intelligence on board, or forming partnerships with said agencies. Fixating on minor shit like internal CCP committee is propaganda trying to pretend somehow US companies are less influenced by geo/politics when they are every bit as much. The big stuff is again, distinction without difference.
> TikTok which is not a PRC company
This is being obtuse like people pretending TikTok being based in Singapore/incorporated in Caymen somehow seperates it from Bytedance's (quartered in Beijing) PRC roots. I'll grant you DE-nationalizing isn't "technically" the same as nationalizing, but geo/politically it's obviously a none starter just like if Beijing told Boeing they would have to divest from US ownership. PRC would never allow US to normalize that kind of behaviour, and vice versa. DE-nationalizing tiktok, i.e. nationalizing by parties other than PRC is another distinction without difference.
Right, the CCP committees are just there to organize picnics. Sure.
Look, I think anyone who has spent a significant amount of time in both places understands that there is a major difference in the way private companies relate to the government in China versus in the U.S. For example, it's far more common for U.S. companies to sue the government over laws or policies they disagree with, whereas in China it's just taken as given that officials have a lot of discretion.
You bring up Meta having US intelligence onboard - I assume you're referring to the Edward Snowden / PRISM revelations. Remember that this was a huge scandal precisely because the idea of American companies working with intelligence agencies to spy (even inadvertently) on Americans is considered so repugnant. Whereas in China it's just taken as given that the government can read your WeChat (or whatever) messages whenever they feel like it, and any encrypted messaging apps that gain a following are quickly removed from app stores.
This is not a distinction without a difference; China is a totalitarian state where you have essentially no right to speech or privacy. The U.S., for all its flaws, is not like that.
> DE-nationalizing... geo/politically it's obviously a none starter just like if Beijing told Boeing they would have to divest...
Can you not see the hypocrisy here, when China functionally bans almost the entire U.S. internet sector?
I mean yes? That's what they do - dumb "political work" activities. It's not the high level strategic coordination, which I said exists (as they do in US), but citing pedestrian CCP committees ain't it. It's Karen from HR buying birthday cakes tier of activities. As someone who spent significant time in both places, sure, PRC companies doesn't fuck with central gov, US companies gets to try to. But push comes to shove, US companies cave, so for the purpose of foreign policy and geopolitics, especially with respect to great powers competition, it's a distinction without difference, because US companies will be subservient to national security interests, with minimal discretion, as they should be. Reminder much chip restrictions were done without industry input / consultation before roll out. Because US system capable of unilaterally laying down the law as well as CCP.
>is not like that.
Yes and NSA totally dismantled domestic spying / FVEY hack to spy on host nationals via third countries (rule of law you know) because Americans found it repugnant, except not. Ex-CIA hires still deciding facebook content policy on "misinfo". US voters thinks lots of things US gov does are repugnant, but functionally cannot change it, especially when it comes to foreign policy.
>functionally bans
Except PRC doesn't. Entire US internet sector is welcome to operate in PRC, provided they follow onerous (expensive) PRC filtering regulations. Which they choose not to. US platforms functionally choses not to operate in PRC, because they don't want to follow the same PRC laws that PRC companies has to follow. Let's not forget these platforms were blocked post 2009 minority riots for actual valid national security reasons, FB/Twitter refused to censor / filter calls for retaliatory violence. Queue PRC platforms implementing onerously expensive human moderation... which later western platforms adopted following NZ shooting, myanmar killings etc. We have TikTok following the same US laws every other US platform follows... and more (again, Oracle basically JV arrangment), i.e. TikTok operating at regulatory disadvantage. Incidentally after getting up their expensive human moderation programs, FB/Google tried but internal dissent killed efforts because they spent the money and can scaling system to PRC. If anything PRC would LOVE if western platforms returned, followed PRC law, and start handing over dissident info per PRC cyber security regulations / get squeezed by PRC influence.
The hypocrisy is thinking they're remotely comparable situations when TikTok chooses to compete in an unfair US regulatory enviroment and western companies choose not to compete in a fair regulatory PRC enviroment. TikTok even offered to basically have US intelligence/oversight on all US activities. The hypocrisy is there is no onerous, concessions TikTok can do to operate in US as a PRC company, even ones that puts it at significant competitive disadvantaged (extra regulatory costs) vs western platforms choosing not to shoulder the same regulatory costs as other PRC companies (100,000s human moderators ain't cheap). Extra hubris when proponents of "CCP ban US platforms" thinks US platforms shouldn't follow PRC laws and somehow are victims. Or that complying to same filtering laws is the same as divestiture. It's difference between house rules being, clean your dishes, versus get a sex change.
I hear this kind of phrasing frequently in the discourse nowadays, but it doesn't seem like a useful framing to me. Is there a safe amount of chocolate? A safe amount of sex? Are we supposed to stop enjoying every pleasure of life as soon as someone does a large study with high enough statistical power to show some negative effect on health, no matter how small?
The question is whether the enjoyment we derive from these things is worth the risk, not whether there is a "safe level", whatever that means.