By - mialomit
Very great thoughts, and indeed true!
You mean “regulate”
and by that they mean "CONTROL our money" :(
"Regulating" does not include telling you that you CAN'T invest YOUR money on X. Especially if X is legal.
Regulating is making sure people can't use their currency (in this case crypto) for illegal activities.
There's a big distinction.
Edit: to add to that, regulations, if done right, will be very good for the crypto space. It'll give it a more positive look and less for for investments and use of crypto.
Still pretty sure OP meant to say regulate in their title though.
National debt isn't actually a problem for a country that has a sovereign currency, as it's impossible for it to default; money could be printed to pay it off completely. Policies like the US debt ceiling are the only constraint, but they are completely arbitrary.
> 1. US $26.70 trillion as of August 31, 2020 2. UK $2.54 trillion or £1.876 trillion 3. EU $14.79 trillion or EUR12.5 trillion 4. China $5.6 trillion. All of these big countries with big debts needs to pay it off and they need more money so they will need to print more money, rise taxes, increase bank interests on loans.
The EU is not a country. The Eurozone members do not have a sovereign currency, so they can't print more money. This means they could indeed default on their debt. Your arguments do apply to the Eurozone, but not the other countries.
> increase bank interests on loans.
Debt is actually why The Fed won’t put interest rates up significantly, because it increases the cost of that debt. It’s unlikely that banks would decouple their loan rates from the underlying interest rate; they may go up, but not to the levels seen historically (eg, like in the 70s).
> and all of this will lead the world to inflation. So they will do whatever they can to pay that debt with lower value and make money while they pay their debt in a huge inflation.
Inflation will occur, but the timescale is probably much longer than you assume. As long as a country's economy functions correctly, without extreme corruption, monopolies or long-term supply chain and labour issues, inflation should be manageable, via the fiscal and monetary policy tools that countries with sovereign currencies have. Thus, even though everyone has been screaming about hyperinflation in the US for over a year, the rate is still modest, despite the supply chain issues caused by the pandemic. Prices have indeed increased on many goods, but they will normalise once everyone can go back to work.
> What comes next is to stop me and you from buying assets (mostly crypto as it has eyes of everyone on it).
Governments don't like crypto because it operates outside of their financial systems and economies. Rather than embracing it and building industries around it that create revenue, they outlaw it. This is because they have too much invested in the traditional banking system. The lack of foresight is simply caused by political ignorance and incompetence.
> So they keep our money in our own bank accounts.
They don't want you to keep your money in your own bank accounts. They want you to spend it. Consumerism creates jobs, tax revenues, business profit etc, which keeps all the index charts going up and to the right. This is what the wealthy invest in and profit from.
> The problem is not Binance, the problem is global debt and huge upcoming inflation.
Binance is a problem for governments, because it sucks fiat out of their economies. It’s much easier to shut it down, and keep the status quo, than nurture the industry to create better products.
Thanks for such an awesome and informative comment!
If I owe $10,000 to my neighbor but they owe me $10,000, then my debt might not be as big an issue as people may make it out to be.
Now imagine that I borrowed $10,000 to subdivide a room in my house so I could rent it out for extra income and my neighbor borrowed the money to buy a brand new second car for leisure. One person is taking on debt to increase their income and possibly the capital value of their home while the other has purchased a depreciating asset. While this is good for me is also maybe a problem that the person who owes me money might have difficulty paying it back.
This is just to highlight that "the problem of global debt" is actually a lot more nuanced than it is usually made out to be.
As for inflation, you could spend your entire life studying and still be learning new aspects of it. Keynes and Hayek are still being debated to this day and I would highly recommend familiarizing yourself with both perspectives.
I'd love to know what happens if everyone starts removing themselves from this interconnected debt cycle, let's say crypto actually starts becoming insanely popular and flips fiat in terms of popularity. Who is left holding this bag contining trillions and trillions of debt? Individual late adopters? Governments? Specific countries, while others go unscathed? Interesting to think about, although I don't really have the knowledge to answer it.
There was a period in history where Christians and Muslims were forbidden from lending which might be a good place to start if you are interested. Death pledges (Mort-gages) have a long history that is often overlooked.
That's not true in case of Muslims. Muslims have always been allowed to borrow. Only that there are rules and recommendations. Yes, it's discouraged but never disallowed at any point. Plus of course no interest.
Yes thanks for this comment I'd forgotten that they were allowed to borrow but not allowed to charge interest.
Christians we didn.t care all this bullshit . In Muslims life's on other hand it was real rule .
You really think most of these countries are solvable ?
I live in France. Our governments for 40 freacking years have been incapable of ending the year with a positive balance sheet. Now dept is 120% of PIB at least and we still spending more and more. It's not complex its just that rulers don't play by the rules.
A former Prime Minister in Portugal said once that government debt is not to be repaid. It is to be managed...
If your debts interest is managed at 1% and you can make 5% return on investment then arguably it makes sense to borrow as you could profit the difference.
I'm highly skeptical of many of the points that I've made above but just wanted to highlight the complexity of the issues.
Most countries **try** to end the year with a debt.
Have a look into why that is the case. Although in a very simplified example would you rather have a mortgage or be a renter?
Now to answer your question about whether these countries debt is solvable I will need you to loan me €1million with a research team and we'll get back to you in 5 years :)
I don't know if you are really knowledgable in this field. I am not, I tried to look it up real quick (why its good for governments to end up with a deficit??) but don't understand the implications. Honnestly I am just a simple inverstor, still I can understand that what works for me as an individual might not work when you apply it to institutions.
But to answer you id rather be a renter but I don't see the parallel
Let's imagine you have a "machine" that you can build that gives you $1.25 for every $1 you spend on it. It would clearly make sense for you to borrow as much money as you can to spend on that "machine" as it's always going to return a multiplier of what you spent on it.
Now that "machine" could be education, an airport, tunnels, or a toothpaste factory which produces toothpaste for your people at $0.5 a tube instead of buying it from another country at $1.50 a tube.
So as long as you have a machine that is going to provide a multiplier to your economy/people/politics then nations are going to want to borrow.
Some counties struggle to borrow or don't have a "machine" like Norway and South Korea and end up with a surplus.
Apologies for the oversimplification, I'm just trying to contribute to the conversation of the complexity of debt.
That I can understand, but you'd still have to keep some of that money every year to eventually pay off that machine (its pbly where your oversimplification is not enough as its pbly more complex, I guess).
But the big problem I have with this argument is that we don't know where the money is invested ! (for France idk about other countries).
Education is poorer and poorer, roads and train lines are trash... you get what I mean. Only thing working, good enough is the medical system, for now.
And what happens if the Machine you thought was going to give you $1.25 for ever $1 spent actually gives you nothing?Or if you pay a big 4 consulting company to say that something will be a "machine" when in actual fact you just want more votes or a comfy board seat when you retire from politics?
It all becomes very complicated and complex.
I really enjoy the innovations happening in cryptocurrency/cryptocurrencies/cryptocurrencies as I hope we will discover better solutions.
Although I do no agree with much of Peter Thiels thinking I would suggest listening to his discussion with Eric Weinsiten about stagflation on youtube to learn more about the bigger picture of problems.
I'll definitly give it a look.
Yh makes sense, only thing is i dont think china is in debt according to tldr global news video because they are the country which countries are mainly borrowing from (they still might be in debt i havent checked but thats just what ik)
But in general it makes sense, banks keep money regulated (i think u might have mistitled cos my understanding was fiat is generally regulated but crypto isnt) they have the control but crypto stops that and gives back control to the people, obvs the banks and governments dont like this hence they are banning. The mere act of saying to people you cant spend your money on crypto is the exact reason y we need crypto. If i work hard and earn money I should have the freedom to spend it on what i want.
They are scared, it’s to late tho crypto is taking over
Banks and governments are targeting Binance because Binance has systematically and consciously built a business around evading existing regulations. They allow criminals and terrorists to use their exchange to launder the proceeds of crime (do you really think hundreds of millions of dollars in BNB are being bought and sold on Binance every hour?); their corporate structure is built for the purpose of regulatory arbitrage because the cost of being a law-complying exchange would outweigh the profits of being a non-compliant one (do you really think that they have only realised recently that there are certain laws and regulations they have to follow in each jurisdiction in order to be able to operate legally?); and they launch a whole bunch of shit coins, securities tokens and other nonsense and provide users like you with extreme leverage so you can lose your life's savings on them.
The walls are closing in, and I would celebrate the day that modern day bucketshops like Binance get regulated out of existence. Besides Tether, Binance is the next biggest systemic risk in the entire crypto ecosystem.
Thank you kind sir for your voice of reason. Every time I post the same argument my comments are downvoted into oblivion because crypto bros are delusional and prefer the idiotic “banks fear crypto” narrative.
Don’t think Binance will be regulated out of existence, worst case is a ban in those countries. IMO there will still be countries that are more than happy to welcome Binance. Just like the global tax reform, there will still be a significant number of nations that did not sign up to it. I might be wrong, who knows. Regulations are definitely coming but it is also an opportunity for coexistence
Deflatory impact of crypto investments is negligible. Besides, there are other means of increasing inflation like quantitative easing. If you are from US then please explain why Fed announced long term interest rare increase strategy if all they want is inflation?
I just went in bank and got told, that digital currency is damaging our economy, this is why banks are banning it, what a fucking joke. I'd lv to see the banks in ruins!
I agree, I think there are bigger things at play, not binance alone. I do not trust binance btw, because it is a financial institute like any other bank, and the have to report your assets to the government