The Fed still does purchases and sales, but not for the purpose of driving the overnight interest rates towards its target. The level of the overnight rate is not affected of any purchases or sales that the Fed does.
916 karma · joined May 24, 2020
This describes how central banks operated in the U.S. before 2008 and in Canada before the 1990s. The Federal Reserve and the Bank of Canada both set a target for the overnight interest rate, and then they hit that target by doing open market purchases (or sales) of bonds, effectively adding funds to (or draining funds away from) the overnight lending market. By changing the quantity of funds, they influenced the interest rate.
What changed is that both central banks introduced interest payments on balances that banks hold at the central bank. Previously, these balances earned 0%. With this new tool, they could directly set the overnight interest rate by adjusting the rate paid on these reserves, eliminating the need for regular open market operations.
This can be proven wrong with a quick check of PayPal's acceptable use policy in the WayBack Machine. The $2500 fine that the article alleges has been added back after "criticism on social media died down" has been there since 2021. [https://web.archive.org/web/20211013092233/https://www.paypa...]
As for article's allegation that a prohibition on intolerance has just been added this October, that clause been there since 2018. [https://web.archive.org/web/20181108164503/https://www.paypa...].
So there is no justification to the article's allegation that the clauses have been quietly added back to PayPal acceptable use policy.
Furthermore, in building its argument that the misinformation clause was sneakily "added back into the terms of service," the article erroneously makes the assumption that a prohibition on intolerance equates to a prohibition on misinformation. This doesn't follow.
I'm not trying to support PayPal's acceptable use policy. But if you're going to attack it, at least use facts.
An occupying force prefers to use a money that 1) doesn't dollarize the nation they are occupying 2) can be tracked, thus thwarting black marketeers 3) is lightweight 4) if they lose, the enemy can't reuse it
Unfortunately, dollar bills are bulky, infiltrate local economies, and aren't enemy-resistant.
So we get innovations like EagleCash, which solves a lot of these problems.
Other payments ideas emanating from the military include Military Payment Certificates (https://jpkoning.blogspot.com/2017/04/c-day-and-military-mon...), overstamped currency ( https://twitter.com/jp_koning/status/1343874636480729088) and pogs (http://numispedia.org/AAFES/).
A few months back REvil/Sodinokibi switched to Monero, but I think they're the only strain to do so.
Most regular folks don't think like to think about banking, just like how they don't like to think about how their car engine works.
But if you ask them to describe how banking works, they'll inevitably resort to the some version of the "giant vault" analogy. Of course, that's the wrong way to think about banking. Which the article rightly attempts to dispel.
But I disagree about the $1 note. According to the GAO, replacing the $1 note with a $1 coin would actually result in a net loss to the government:
That's a good idea.
Implicit in this idea is that victims can call a customer help number and get gift card balances frozen and reversed. I don't know if this is possible to do right now.
If so, fraudsters might start up a new scam. Buy $1000 in Target gift cards, spend the money at Target, call up Target and claim that a scammer stole the funds, and then get $1000 back, netting $2000.
Target would have to build a new department just to adjudicate gift card claims. At which point it might decide that it's just not worth the hassle of issuing gift cards.
That's right.
An "on-us" transaction, one that simply requires RBC to update its database by debiting funds from RBC customer A and crediting them to RBC customer B, is free. (If your bank is charging you for that, switch banks!).
A wire transfer is more complex than an "on-us" transfer because it involves two bank database. RBC has to debit its database, and Bank of Montreal has to credit its database, and the central bank is usually involved as an intermediary. This often involves a wire transfer fee.
If we both join set up accounts at a regular bank like RBC, we can exchange $1B for free.
The point I'm making is that fees are not bitcoin's strong point. Any financial network can undercut it. What is unique about bitcoin is that not everyone can get an account at RBC, but anyone can join the more expensive bitcoin network.
In the US, most PIN debit card transfers occur via either MasterCard's Maestro or Visa's Interlink debit networks. Signature debit payments go through MasterCard/Visa's credit card networks. So you've still got the duopoly problem.
The traditional problem with bank-to-bank transfers in a retail, or point-of-sale, setting has been speed. Cheque was about the fastest that could be mustered.
But with developments like UK Faster Payments (which is mentioned in your link) bank-to-bank transfers are getting faster, in some cases instant. And so usability at the point-of-sale is now on par with cards.
In Holland, iDEAL is used a lot for retail purchases. It's an instant bank-to-bank payment option that competes with the card networks.
The equivalent in Sweden is Swish. It too is moving into point-of-sale payments.
As for the US, I suspect that at some point Zelle will pivot into retail point-of-sale payments. At which point the card networks will have a big competitor.
All of this is good news if you are worried about the card oligopolies!
But this is a niche usage. What locals really want are dollars. Something like 50-60% of all Venezuelan transactions are now being conducted with U.S. paper money and Zelle.
But what actually happened is good old fashioned dollarization. U.S. dollar banknotes flooded into the country. As for digital payments, Venezuelans have repurposed Zelle, the U.S-based person-to-person payments option, to make digital U.S. dollar payments.
The advantage of Zelle is that unlike Visa, it is a dollarization tool. A Venezuelan merchant can directly earn U.S. currency.