New Initiative for Donations

[Laeeth Isharc]

On Saturday, 27 October 2018 at 14:33:43 UTC, Neia Neutuladh 
wrote:
> On Sat, 27 Oct 2018 10:54:30 +0000, Joakim wrote:
>> I see, so you want other taxpayers to bail you out for your 
>> mistakes, interesting.
>
> One of the major points of having a government is to create 
> these regulations that make it less likely for individuals to 
> suffer from the actions of other people and organizations.
>
> Another major point is to help people in need using the 
> collective efforts of society.
>
> Programs like FDIC in the United States exist to serve both of 
> these: it's an extra set of regulations for banks, and 
> compliant banks will be bailed out if circumstances require. If 
> I choose an FDIC bank and the owners run off with my money, I 
> didn't make an avoidable mistake, any more than being mugged in 
> the street is me making a mistake.
>
> If you oppose that, you're gunning for an eventual repeat of 
> the Great Depression.

Banks are special because of the payments system and because of 
lending.  In October 2008 Gordon Brown was within two hours of 
shutting down the banking system and declaring a state of 
emergency.  If that had happened nobody would have been able to 
make payments and new lending would have come to a halt.

In 2038 you won't need banks to make payments because 
cryptocurrencies will be a viable alternative.  And lending is 
already being provided by asset managers.  So the justification 
for the combination of leverage and the mismatch in liquidity and 
risk of banks deposit liabilities and their assets will 
disappear.  The component of TARP that constituted aid to the 
financial system made a profit, but nonetheless there will be 
very little public appetite for a repeat the next time around.

At the request of the UK debt management office, I met the 
representative of the IMF financial stability review in early 
2005.  He had a bee in his bonnet about the dollar yen carry 
trade and hedge funds: generals always fighting the last war.  I 
told him to worry about the banks and what they were buying.  He 
didn't listen.  So regulators have little skill when it comes to 
understanding systemic risk posed by the asset and liability 
decisions of banks and so it will be good to make that function 
redundant.

So cryptocurrencies matter.  They are far from mature right now 
though and it's not the most important thing if you have limited 
resources to accept them.  The best way to get the Foundation to 
accept them might be to do the work to help...