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Comment by krupan | Hacker News Reader

If this second thing last paragraph doesn't make your skin crawl then I don't know what will:

"Cash, which is awkward to immobilize for policy reasons, will be gone in a decade or two, leaving the public entirely dependent on bank deposits and fintech balances which, thanks to digitization and automation, can be easily controlled by the authorities. To rein in a jump in inflation, central bankers will require commercial banks and companies like PayPal to impose temporary quantitative freezing on their clients' accounts, but unlike Finland's 1945 blockade, the authorities will be able to rapidly and precisely define the criteria, say by allowing for spending on necessities — food, electricity, and gas— while embargoing purchases of luxury cars and real estate"

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The quiet part is that you will not be able to spend on those necessities when your politics no longer align with the regime.

Total control over money is a guaranteed path to totalitarianism.

I'm quite confident that governments aren't that powerful.

They can issue money, and manage their currency. But I've never heard about any government actually controlling what currency people use. Not even extremely authoritarian ones.

Can you pay your taxes in another currency?

I think this idea is more about using technology and a digital currency to restrict what can be purchased with a specific digital currency. You said "controlling what currency people use" which I take to mean something different. They are both pretty terrifying and I'm not as optimistic as you.

Indeed makes my skin crawl. How can one reasonably protect himself from such draconian freezing? Asking for reasonably, not bunker full of gold bars.

Bunker full of gold bars. Or foreign currency. Or silver.

The problem with all these is that money is kinda worthless if you're unable to spend it, and regimes that are likely to enact such monetary policies will often regulate the use of gold etc as well. A bunker full of gold bars does you no good if actually trying to spend any of it is a crime in and of itself.

I agree, and when I see foreign currency as an option I think of two possibilities. First, moving to the country that hosts that currency. Second, waiting for the US currency to slide into obscurity and switching to whatever takes over as the global currency.

Both are tough choices that rely on either too much time or too much space.

It's not a fantasy scenario that we need to speculate about. Currencies collapse all the time, just pick any country and it has happened to them within the past 200 or even 100 years. There's millions of people alive right now who avoided having their life savings destroyed by having foreign currency or bullion or both.

I'm not disagreeing with that part; I grew up in Russia in the 90s, where, if you had any significant amount of money, you'd have a dollar or euro account, and ideally both. This provides security against currency collapse, yes; but if the government decides to be actively confiscatory, it doesn't really help, unless their plan is particularly poorly designed.

If we're talking about physical paper money bills, then the government will not be able to confiscate these from people, they can't search every nook and cranny for something which is so easy to hide. The way the Finnish government confiscated money was by imposing rules on how their currency could be used and the value of the bills. For foreign currency, they can try to impose rules and a fake exchange rate, but the rest of the world is not going to care, neither will the black market.

If we're talking about digital foreign currency, it's a matter of having that money in a foreign bank account, where your government can't touch it. Everybody should have some or most of their money in foreign bank accounts, otherwise you're practically begging your government to ruin you.

By "confiscatory" I mean any policies that amount to taking your money or preventing you from using it as money. With physical paper money bills, making them outright illegal to hold is actually surprisingly effective - you don't need 100% enforcement rates, just high enough to make it impractical for most people. One historical example of such a society was the USSR.

I didn't know we were talking about "most people". They will do whatever their government tells them to do: hand over any property the government demands, and send their children to the trenches to die.

If you want a solution for most people, the solution is to not have a communist government or any other government that will confiscate your wealth.

If you want a solution for yourself, it is bullion and/or foreign currency. If the government declares their own currency as being illegal to hold, then that currency now has a value of 0. For you and for everybody else. If they declare foreign currency as being illegal to hold, that only has implications within the country. And the black market does not care about borders.

If most people won't take your dollars/gold/... because they fear getting caught, then what use is it to you? You won't be able to spend it. There were actually people like that in early Soviet days, guys who managed to preserve a stash of their former wealth, but without the ability to use it meaningfully.

The best mitigation you have for that kind of government is having a ticket out.

Bitcoin

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