1,554 karma · joined May 3, 2020
Browsers should get their shit together and add proper support of domain-limited CAs and add optional whitelisting of CAs for given websites.
The "false premise" was that GlobalSign has refused to issue new certificates for Sberbank and there were several cases of CAs revoking existing certificates. They eventually have found a CA (Harica DV) which was willing to issue new certificates, but it was not clear at the time that such CA will be found and the new certificates can be revoked at any moment after a new wave of sanctions or simply after a strongly worded warning from Washington or Brussels. Relying on a relatively minor Greek CA for bank operations is clearly not a good strategy in their situation.
To mitigate the MitM risk I believe that CT and limiting CA to specific top-level domains (so a hypothetical RU CA would not be able to issue certificates for .eu or .com) should be sufficient enough.
Or it would've been placed in the reverse REPO facility at delicious interest rates paid straight from the printing press. A lot of COVID spending was sanitized this way, without it inflation would've been much higher. And this money has started to get back into the economy.
Obviously, the US government deficit spending is somewhat better than building dynamite statues (but only somewhat) and we can expect some degree of returns, but I highly doubt that the spending is efficient enough to outpace raising debts and the crowding out effect of the private sector.
The one where several trillions of deficit spending were fully financed by the Fed.
>Help me understand why a large holder of debt would want it to pay less?
Because the Fed is not a commercial organization and it's heavily influenced by politics. I will not be surprised, if in the following years financing of fiscal deficits by the Fed will be painted as a way "to save the economy" and to "fight unemployment".
>If we have a hard landing, which is the historically-suggested outcome, we get lower rates and a recession. Not inflation.
Yes, in the short term we will see deflation. But I predict that the hard lending will be painful enough for the Fed and the government to start stimulation of the economy fueled by bailouts and massive deficit spending. And this in turn will cause resurgence of inflation down the road.
>No, because new money isn't being created. Existing money is not being removed. That's different.
So taking a paper which costs $600 on the mark-to-market basis and giving in exchange $1000 is not a form of QE? Yes, those $1000 is technically a loan, but if you delay its repayment indefinitely, it becomes equivalent to creation of base money.
>How does the discount rate cause deposits to flee?
It's not the discount rate per se, but the Fed rate. If you can get 5.5% in a MMF (i.e. in RRP and short-term bills), why the hell would you keep your money in a bank's deposit for 1-2% together with risks associated with potential bank failure?
To attract deposits banks would have to provide competitive deposit rates, after that they would have to find someone trustworthy enough to give a loan at 10-15% rate. So the banks get squeezed from 3 sides:
- Either raise deposit rates or get money fleeing into MMFs.
- Not enough business is able to work with 10-15% loans in the face of worsening economic situation (especially after the recent near 0% environment).
- You still have to pay 4-5% on BTFP funds, which you had to take to offset fleeing deposits.
>A large literature has documented the poor inflation hedging properties of the overall stock market. However, certain individual stocks have the ability to be good inflation hedges, even if the overall aggregate market has poor inflation hedging properties
You can position yourself defensively, but investing into a broad market using something like S&P500 or God forbid NASDAQ as an inflation hedge is arguably not a great idea.
In an inflation environment equities usually do not feel great, since inflation causes shrinking margins and it takes time to pass rising costs on the consumer. Analysis from the Hussman Funds based on statistical data predicts that nominal return from equities in the next decade will be zero to negative.
I think it's unlikely (but not impossible) that we will see a direct repeat of the recent QEs. We probably will see something similar to the Japanese yield curve control and you can easily see how the Japanese equities performed in the last two decades.
>If the economy is doing well enough that lowering rates would cause inflation, there is no need to lower rates.
I am not naive enough to believe into the soft and no-landing scenarios. The gradual yield curve uninversion points to incoming recession. Huge fiscal deficits contribute to it, since without QE they cause crowding out of private debt markets.
>Just let banks borrow at the discount window against the face instead of market value of their Treasuries.
And, as I've said, it becomes another form of QE. If you set the penalty rate on the level of the current Fed rate, eventually banks will fail, since they can give enough loans at such rates and deposits actively flee into treasures and MMFs. And using lower rates will be rightfully seen as yet another bailout of banks.
To be fair, the banking system has started breaking, but, instead of lowering the rate, the Fed has temporarily masked it by the BTFP. When the program will end, banks will end up with huge holes in their balance sheets (discounted paper + accumulated interest on BTFP funds). So we either end up with a huge banking crisis, or the Fed will prolong the program, thus effectively making it a form of QE.
I expect the Fed will drop the interest rate and/or will re-start QE somewhere in the next year, so expect new waves of inflation similar to 70s.
[1]: https://markets.businessinsider.com/news/bonds/us-debt-matur...
While it indeed has American roots and a huge amount of development is done today by American citizens, various people and companies from China, India, Japan, South Korea, Russia, and many European countries have significant contributions as well.
>American owned design
Nope. It's "owned" by the RISC-V International Association registered in Switzerland.
At least, with RISC-V there is a chance we will get full stack open hardware implementations. They likely will be far from the cutting edge, but sufficient for many applications.
Sheer f**g hubris.
And plastic does not stay inert in landfills forever either, it slowly decomposes, releasing products into environment (methane and carbon dioxide being most benign of those). Effectively, you get slower, less controlled and more dangerous (biologically speaking) "burning" which will be done for many generations instead of burning the stuff right away in controlled conditions.
But there are different forms of pyrolysis. In my understanding, the company uses lower temperatures to transform plastic into "synthetic oil" (i.e. mix of hydrocarbons instead of long polymer chains), which in theory could be used to synthesize new plastic. Only small part of plastic gets transformed into gas and burned. But this "oil" is much harder to work with than oil pumped from ground, so instead of recycling it fully, some of it gets discarded into environment, resulting in toxic hazard.
The government (in a non-command economy) can increase its control over productive capability of the economy in 3 ways:
- Raise taxes (including profits from government-run enterprises). Explicit and honest solution. Understandably, disliked by many and hard to pass politically.
- Promise to give more some time in the future. It's fine when tax receipts grow with the same rate or higher as the debt, but usually the government spends irresponsibly, meaning that more and more of its budget goes into servicing its debt. In the end, you get into a debt spiral.
- Make money printer go brrr. It can take different forms, QE and yield curve control are examples of it. Eventually (there are ways to delay it, and they can work for decades), it causes runaway inflation, which seriously corrodes economic fabric.
Arguably, it's not. As I mentioned in my other comment [1], Japan is a huge creditor nation, while the US is the largest debtor one.
Also, not all of the borrowed money were spent by the Trump administration. When he left the office, TGA had 1.6T dollars.
To summarize it: Japan and US are in two very different situations, the former is one of the largest world's creditor nations, while the latter is THE largest world debitor nation. The reserve currency status, while quite useful for kicking the can down the road, makes situation exponentially more dangerous when the can will hit a wall.
The moon mission had only one goal: to save the face after the US has lost all meaningful milestones to the Soviet Union and to "win" the space race by moving the goalpost. I am quite confident, that if the Soviets has managed to land on the Moon first, the goalpost would've been landing on Mars.