Hacker News Reader

Comment by eganist | Hacker News Reader

Piggybacking on this:

What stops the Fed from doing something like this and then subsidizing it with negative rates on traditional notes?

Disclaimer: not an economist. This could be a really, really stupid idea, and it would clearly only work with literally the strongest world economies that are capable of charging entities to hold their money for them. But it could work well as a crisis basic income solution when everyone else moves to park their cash.

View on HN

The parent's proposal would cause a great deal of inflation, which would diminish demand for negative-rate notes.

If someone wants to print money, they should just print money, not try to cover it up, as that will just prolong and worsen the eventual pain.

I think that's yingw787's point. That as we get deeper into this crisis, the Fed's actions start to look more and more like "printing money", but with a veneer of fiscal^H^H^H^H^H^H monetary policy. The $2,001 notes at 0% is the absurd extreme of this path.

(EDIT: Yeah, I meant monetary)

Sorry if I’m slow, but, if true, I wish that point had been make explicit. That’s actually a good argument.

As it stands now, that comment looks more like yet-another-pro-UBI post with a bizarre fantasy about the Fed breaking the law to make it happen, and I downvoted it on that basis.

Edit: And I think you meant "veneer of monetary policy"? The argument would be that it's being framed as monetary policy even though it's substantively a fiscal policy, something the Fed is supposed to stay away from.

And that goes against the HN guidelines for down voting comments.

You're just suppressing someone else's opinion because you don't agree with it, not because it is wrong or inappropriate smh

No, downvote for disagree is within the guidelines [1].

Even so, I try to instead use the standard of "does not contribute to the discussion", which I think this qualifies as (under my earlier understanding of the comment) because it's off-topic hobby-horsing, made worse by proposing a bizarre mechanism without acknowledging the illegality.

[1] https://news.ycombinator.com/item?id=11649750

> Edit: And I think you meant "veneer of monetary policy"? The argument would be that it's being framed as monetary policy even though it's substantively a fiscal policy, something the Fed is supposed to stay away from.

That's exactly what I meant. Fixed my comment, thanks.

So...if nobody but the Fed or some other govt construct demands these notes...are we good...if the market says so...?

I'm not saying this isn't insane, it is, but I don't think it's that much more insane than what's going on.

Also for an explanation of QE I like this guy's video: https://vimeo.com/2606496

Reply on news.ycombinator.com