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0 pointsbobthepanda6y ago0 comments

> the main effect will be on the market price of Libra, right?

National central banks in the modern era have two functions: manage the money supply and make sure that the economy is running well. It's true that Libra would be the only direct impact, but then you have people who have debts in dollars and revenues in Libra, and if they can't pay back their dollar debts then their lenders are now short of dollars and can't pay back their obligations, and now we have a financial crisis.

Examples of this include 1997 in Asia: https://en.wikipedia.org/wiki/1997_Asian_financial_crisis

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abecedarius6y ago· 1 in thread

Thanks. I'm skeptical that this management of the economy on net makes it go smoother -- I can't understand what they're doing even as well as they do without far more study, but I can e.g. notice that respected economists were seriously starting to think the "great moderation" had been achieved by the years just before 2008. (Not just hindsight bias, since I was reading them at the time.)

But yeah, that point of view is a lot more mainstream and could well be more right.

bobthepandaOP6y ago

Love or hate what the Fed is currently doing, it's a known quantity that has managed to avoid a serious run on the dollar since the '80s. Libra at this point is a proposal that has yet to be anywhere remotely close to battle-tested. Better the devil you know than the devil you don't.

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