Hacker News new | ask | show | jobs
by JumpCrisscross 1222 days ago
> a finite amount of energy in this universe and yet here we are at "Practically all prices are determined on the fly"

This is a silly comparison. Stars don’t model their fusion output. Particles interact on the fly. There is also no model relating entropy to overnight collateralised borrowing rates.

> calculating physically intrinsic value for a sufficient number of commodities

Interbank funds aren’t a finite commodity.
1 comments
LukeB42 1222 days ago
>Stars don’t model their fusion output.

The sum total positive energy contained in the universe can be calculated and predicted.

>Interbank funds aren’t a finite commodity.

This statement is obviously false and can run into brick walls in practice.

The comparison isn't silly in the slightest. Currencies must be coupled to a finite resource to function; Lest agent A buy all of agent B's gold using practically nothing but chutzpah.

That you think the comparison is "silly" shows limited/magical thinking on the subject.

link
JumpCrisscross 1222 days ago
> statement is obviously false

No, it isn’t, though misunderstanding it isn’t even fundamental to the flaw in your thinking. A couple of banks can create and destroy an infinite amount of money among them with no real effect. JPMorgan credits UBS a trillion trillion trillion dollars at the latter’s JPMorgan account at the same time UBS credits JPMorgan at its UBS account, and then they both undo it a moment later. No real effect. Hell, JPMorgan could create the money with no counterbalance so they could look at it how pretty it is for an indefinite amount of time. Same deal. Regulators won’t be happy, but that’s because of the potential effects of UBS trying to buy the Fed’s balance sheet.

It’s when the interbank market interacts with broader markets that anything real happens.

link
LukeB42 1222 days ago
Again more bankster handwaving.

What need do banks have for that capability where the capability shouldn't clearly be criminalised?

link
JumpCrisscross 1222 days ago
> What need do banks have for that capability where the capability shouldn't clearly be criminalised?

Banks don't legally have that capability.

The point wasn't that banks do this. It's that it would have the same-real world effect (again, outside regulatory action and law enforcement) as me writing you a trillion-dollar IOU.

link