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#nostr #btc #bitcoin #progressivebitcoiner #grownostr #fiat #theproblemwithinterest

I enjoyed the article up to a point, but then completly lost the plot. You focus your critic on banks and completly ignore the role of central bank in this dynamic. If running a bank is so lucrative you would expect the number of banks to grow (look at shitcoins amd their proliferation, obviously they are earning money from the scam). However, the number of banks shrinks in most developed countries. This is a trend even in countries with historically strong private banking sector, like Germany. When Bundesbank was operational, and properly managed by the state, this was not the case. Now that ECB is running the show things are different and in not so distant future there will be only ECB as a source of credit money.

Also, from the perspective of a bussiness owner taking credit is always better then taking investments, if you believe that your bussiness will be succesful. It is really hard to grasp this beliefe that all the problems will be solved once credit disappears.

Thanks for the thoughtful reply — I really appreciate you engaging! Just to clarify though, I do aim a substantial amount of critique at central banks throughout the piece. I explicitly point out that they control the issuance of base money, trigger bailouts through QE, and ultimately enable the entire debt-based model to persist. In fact, the whole article builds toward a system where central banks can’t step in to socialise losses — because that’s the root of the moral hazard. /P

I’ve got nothing against lending as long as everyone voluntarily participating also takes on the risk. Profits shouldn’t be privatised while losses are socialised. That said, in the piece I point out that I’m genuinely unsure whether the fixed interest model can actually work when banks aren’t constantly bailed out anymore. Personally, I’d much prefer a system with many smaller banks—which I think you’d naturally get under freer banking (where banks can actually fail just like how it works for any other business), rather than the too-big-to-fail giants we have now.

Ok but isn't then a logical conclusion that one should eliminate central banks, and not banks or the mechanisms by witch credit money is created. There is obviously useful purpose in such scheme, to allow people to start a bussiness when there is no one to give them money for it. E.g. there is one bakery in the city i want to open another one, obviously there is a need for more bakaries, I take credit, once i return it i do not have to share profits with investors. And everybody is happy because the price of bread goes down.

Fixed interest model can work if there is a mechanism to shrink money supply and to forgive debt. Jubilee is necessary to relax the system. Things did work for a rather long time, it is with financial shenanigans, proliferation of wallstreet, and similar zero-sum games and their entaglment with central banks that everything started breaking. The real cancer is the FED and their indoctrination of the banking systems around the world. They cannot aford to have sane competition.

I think the issue today though is that so often that is not what happens. That small bakery or small business owner can’t get a loan, even though that’s how it’s “supposed to work”, because the big banks much rather lend to corporate giants that can pledge big chunks of collateral. Again, I have nothing against lending as long as losses aren’t socialised. If a given bank wants to lend at a fixed rate, they (along w depositors) should also take the fall if it doesn’t work out—not the public. But as a depositor, ask yourself if you’d be willing to put your money in a fallible bank for a mere 3% interest and risk losing everything (no FDIC insurance, no bailouts). The only reason I think the answer is yes today is because it’s a rule of thumb that banks are bailed by government. If the answer is no, the current banking model would have to change under BTC. I believe it will be a bottoms-up change.

I agree wholeheartedly with the second part. On the first note, if it will work or not with fixed interest we’ll have to see! Time will tell—but im not so sure! I could be wrong though.

I think works of Steve Keen and Richard Werner give more positive outlook on the roles of banks and credit in tye economy. Made me less critical of banks as such, and more focused on the root causes -- the centralisation of banking system.