It is backed by nothing and that's ok. It's a money, it doesn't need to be "backed". Gold is not "backed" by anything, the notion doesn't even make sense. Backing implies a debt or a promise to convert currency into money by a counterparty, and that backing can be taken away.
> most 'basic' toothpastes for 100ml for £1, which I don't think is much of a rise on what it's been for the last few years (I think I used to get 125ml for that price).
Going from 125mL to 100mL for the same price => 20% price inflation.
The proportion of my local supermarket given over to toothpaste is mind blowing. It's like the beginnings of some sort of Brontitallian Shoe Event Horizon.
For what is essentially just a mild abrasive plus fluoride, the baffling array of variations on a theme on display, mostly from the same few fmcg conglomerates anyway, is just ridiculous.
It’s probably a strategy. They overwhelm you with choice. So you end up with some simple heuristic like more expensive is better. Get something middle of the pack and you are still overpaying 200%.
Yes, which would seem around in line with inflation. I was replying to a comment talking about seeing toothpaste for £5, which gives the impression that perhaps the price of toothpaste has rocketed past that of inflation, which doesn’t appear to be the case.
They're not shareholders, they are creditors, by definition. That's why bank statements have a little "CR" next to the balances. In a bankruptcy, shareholders get wiped out first, then creditors start taking haircuts... it's worked this way since forever.
> Banks that may be otherwise solvent may become insolvent because of a domino risk of bank runs.
That to me implies the bank was never solvent in the first place. You could have easily created a bank that is always solvent, see the case of The Narrow Bank, but the Fed wouldn't allow it.
I don’t disagree with narrow banking. But the situation we are in is all based on the banking system we have today. And that banking system does have real systemic risk today.
Sure, the monetary&banking system today is a corrupt clusterfuck that will inevitably collapse under the weight of all the unproductive debt that's built up. That's why I'm a bitcoiner.
> A peg only lasts as long as you have the currency to keep paying at that rate.
This logic applies to all bank deposits as well. SV Bank deposits were pegged to USD at a 1:1 ratio, they just broke the peg. People don't seem to realize USD bank deposits are not the same as USD. With "stable" coins it's more obvious because they have different names.
Doesn't matter if it's physical cash or an electronic ledger since both the electronic ledger and the physical green pieces of paper are liabilities of the banking system, specifically for US dollars they're both liabilities of the Federal Reserve.
> specifically for US dollars they're both liabilities of the Federal Reserve.
I don't think that's right. There are banks outside the US that hold US dollars that the Federal Reserve has no jurisdiction over. They create more currency through fractional reserve lending for their local currency as well as any dollar denominated loans they make. I don't see how those are liabilities of the Federal Reserve, but maybe I'm missing something?
Dollars are bank notes “promises to repay”. It used to be many different bank issues notes payable in gold, now it’s one bank - the Fed, and it’s no longer gold.
It doesnt matter if the US dollars is held outside the US. The dollar represents a promise by the fed to pay, and thus is a liability to the fed.
Of course the fed has the power to create and destroy dollars.
> Of course the fed has the power to create and destroy dollars.
So to banks outside the US. That's how fractional reserve banking works. If I go to the UK and deposit $1m USD, and they loan out $900k of that to you, that UK based bank has created $900k.
