On Currency Baskets


#21

Shame on you being so ironic, I put a lot of thought into that!

Joking aside, will watch the video when I got a moment and think about your idea.


#22

Either you are a slow watcher or a slow thinker :wink:
Let me rephrase that: you are at least a slow watcher or a slow thinker :smiley:


#23

@masterOfDisaster I’ve noticed how much effort you put into logical reasoning in this forum thus far. I have to admit that your perception about my general capabilities cannot be disregarded as completely arbitrary, considering the time that has passed since my promise to get back to you. Though, the solution set you provided seems to be quite narrow :wink:
I am extremely involved with academic stuff currently. So, time is limited for me a lot these days :wink:
Apart from that, I definitely liked the frame of your idea. I haven’t dealt too much with the specific stuff like the flow you described. The fact that we might need to focus on some use case is probably what was most important about your proposal.
I fear that @JordanLee has a vision that solves problems which have not enfolded their destructive potential sufficiently thus far in order to make us a viable and considerable alternative in the very near future for a lot of people. The people that could mainly bring money to our network probably live in countries that have monetary systems that do not challenge an individual’s financial situation enough in a way that these people have to consider disruptive measures regarding their own orientation towards monetary systems and practical behaviors (in spending, saving, investing or supporting certain political movements). Those that might benefit the most from the system we provide might not sufficiently be informed or do not have access to our network. We have a product, but I think we need to reconsider how we set up pipelines in order to make us visible, consumable and expandable.
Supporting initiatives like the one you described can definitely be a very helpful instrument to achieve the overall goals that Jordan has in mind, assuming that I understand what he wants to achieve :wink:
Thus far we are just a hedging instrument and the problem is that we are not dependent on the quality of our own service, but rather on the failure of others until the market finds out step by step that our reliability dominates the competitors’ temporary efficiency advantages (for instance tether). And even then, it is a question of preferences when there is one entity providing a reliable solution that requires a little more patience and another entity that provides an extremely fast solution to a customer’s problem or desire.
I think we can push some things forward. But a lot of the success of our business model so far depends on the learning process of individuals being taught a lesson in the open (scam) market. And even those who got burned might not turn to us right away because they put us under the same roof as the system that just disappointed them.
Maybe we should have a discussion about our target group. Who are the people that really benefit from our product? Where are they and how do we make sure that they have access to our system? I certainly disagree that central bank haters will make us successful in the near future :wink: it’s simply not the group of people that is forced to change their everyday life disruptively. Waiting for people to turn to the Nu network for idealistic reasons does not sound too promising to me :wink: Although I probably belong to those idealistic people. I hope “idealistic” is the right word here.


#24

I hope I don’t get banned for spamming! :wink:


#25

The SDR was created as a mechanism to collectivize the bargaining power of an agenda. The ruling clases of global fiat work together like a cartel overpower the aims of nations. I am not convinced a basket of currency plays favorable to the aim of nu.

Nu needs to continue its course with the dollar. After a sufficient amount of time has passed to indisputably prove the concept works should we consider diversifying the peg.

We should however be aware of the fatal trajectory of the dollar. It is being kick out of global trade by our eastern friends. Other currencies are in for big swings until the reign of the dollar is dead.

I think putting more bombs into the basket doesn’t make the basket better. Further, there should be something beyond fiat to peg to. The dust needs to settle before settling on ideas.


#26

Most of that is dead on, Nu needs to prove itself and everything is corrupt. Eventually, we can peg to btc if it proves in ots own way. Or gold.

The thing is, each of these bombs comes with their own basket. When we sell the pegged currency we accept counterparties, like btc. And when the currency crashes we end up buying it all back using our big pile of finances (ultimately the nushare supply). We actually make money in this case, and we make it up front.

The worse case is when a currency gains value rapidly. Imagine if we pegged to apple stock when it jumped up. We’d have to buy back people’s iNBT for bunches of times what they bought it from us for.

Best is, of course, something stable.


#27

I’m glad that you spend some time here although you are busy with other stuff!

I haven’t been banned for spamming so far. That makes me think you’re safe :wink:

I agree.
Offering a product, that is mainly perceived as an instrument for hedging, costs money and brings little revenue; not good for Nu.
Reaching only traders leaves so many, who could profit from Nu’s products out; not good for the people.

Don’t underestimate the power and devotion of this sort of people :wink:
But you’re right - we should neither rely in them nor limit us to them!

What’s that aim in your opinion?
If Nu wants to be able to limit the power and influence the thinking of current central banking, SDR might be a better means of achieving that.
With SDR you’re free from the direct influence of a single central bank.
SDR can’t be the last step in this evolution, but it’s an important one in my opinion.


#28

In the sense that we are not trying to collectivize our bargaining power to achieve aims outside the system (of stability).

I don’t think linking Nu to SDR (or others) would ensure better stability. The IMF has a relationship with the central banks and can influence policy, a cooperative benefit to ensure stability. Nu is at the mercy of whatever.


#29

Central banks are much as the countries they reside in interested in ripping each other (and the rest of the world) off.
I can’t imagine the countries/currencies represented in the SDR collaborating.
Each one will follow its own agenda.

source: https://en.m.wikipedia.org/wiki/Special_drawing_rights


#30

It’s not about the countries colluding, it’s about the IMF manipulating the fractions for personal gain.


#31

The percentage of each currency?


#32

I dont know how sdr works, but while the ifm is a decentralized fund the fund managers are certainly central. What would it take to manipulate the price of sdr assuming you’re some big body with a lot of influence and intentions? People don’t have to target Nu, if they target something we peg then we’re inevitably drawn in.


#33

I disagree. The currencies in the SDR world together very well behind the doors of the trilateral commission.

The Chinese currency was added after years of China asking to be included, years being denied. China, along with its partners formed new institutions to counter the IMF, the AIIB, silk road development fund, and thr brics bank. IMF caved after 60 counties joined their cause. China had to remove it’s peg from the dollar to enter SDR, as currencies need to be flexible as part of the agreement.


#34

And that makes the SDR more volatile and prone to manipulation than each of the included currencies?
I can’t follow that logic.


#35

You stated you couldn’t imagine the counties involved with the SDR collaborating together. I provided an example of a format in which they can.

The SDR was a response to the US abandoning the gold standard, a preemptive one too as the voices around the global were screaming at the US for exporting inflation. France called the bluff and the pieces came off the chess board. Kissinger saved the dollar with the Saudi agreement.

I think the IMF is a great institution to export inflation to. The SDR is not convertible to goods, just reserves that are traded. With all the money printing going on, you can lock and pile the volume in bulk without it escaping to the market.


#36

You’re right - they might be collaborating to a certain degree.
Which might end where the (individual) gain that can be made from that gets outpaced by the gain other members can make.
So there’s an economical boundary for that, which might leave not very much room.
But even if they collaborate, the SDR will be more stable than an individual (SDR) currency if you compare it to currencies that are not in the SDR basket.
SDR is a step towards more stability - if you think global - or am I far off?


#37

Well, as an institution, the IMF was born out of the Brenton woods agreement, to fix the dollar to gold. Other countries could swap their notes for gold. At the time, this was to provide the rest of the world a stable currency of exchange. I mention this because the IMF only adopted the SDR in response from the divergence from gold and morphing into a fiat basket. Is the transition from gold to a basket more about stability or shared equity? I think it’s about sharing equity, stability next but subordinate to equity.

Let’s not forget that we are in a fiat experiment where limitless debt propels the world. By suggesting that a basket of currencies is more stable is to say less adverse to risk. Personally, I think bonds are transitioning to Liabilities and soon fiat. There are serious talks of negative interest rates, where it is costly to store money. When currency is not longer a storage of wealth the open and free market will fill it’s space.

If adverting risk is our goal we can consider pooling from a different asset class, maybe? If low variation is our goal the imo the dollar is still king. Japan is a mess, demographically and financially. Japan is exercising negative rates. Europe is facing an identify crisis and the euro is proving to be a burden on smaller economies. Negative rates have begun. Dollar is getting kicked out of settlements but everyone still needs to pay their debt in dollars creating the demand.

Not sure what’s next for Nu but it’s not the SDR, I hope.


#38

You seem to be much more experienced than I am in these financial topics.
While I find SDR superior to CN-NBT, EU-NBT or US-NBT, what in your opinion is superior to X-NBT (the SDR pegged product)?
I suppose it needs to have some market saturation to find adoption. I don’t sense a big chance for a small corporation like Nu to pave the ground with a product that is pegged to something with little adoption.
Are there baskets of commodities/goods that are stable and widely adopted?


#39

We are entering the Twilight zone. Nothing is stable right now. Choas will eventually ensure and something will take off. Silver and gold are at the top of the list. The yuan and ruble are very interesting too, taboo to the western investor but promising. Time will tell but I think Usd-nbt is strong until we see the precious metal markets break. They are leveraged 200+:1, with strong physical demand. When they break, the dollar loses control. This is when yuan and ruble will look interesting because they will be largely used for energy settlements.