IMF Blog

There are some ideas to implement negative interest rates on bank accounts only but keeping cash by introducing a second cash currency that explicitly does not follow a stable peg. I.e. inflation targeting only has to be done on cash not bank accounts. Bank accounts will get price level targeting which means no inflation. https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-inter…

> Now that anyone who wants a vaccine is vaccinated in most places, it's not 'evil' to ask people to come back. Just because it's not 'evil' doesn't mean it's not stupid. If someone isn't performing, separation probably makes sense. But it shouldn't be because they've woken up and realized that being in an office all day is a soul sucking exercise that they'd rather avoid. I firmly believe this will all level out with people deciding to do what is best for them, because too many people have had the opportunity to realize how much better life is without a commute and physical restraints around where they do their work. (Side point: the idea that anyone who wants a vaccine can get one is incredibly privileged, myopic, and fundamentally wrong. Stare long and hard at this: https://blogs.imf.org/wp-content/uploads/2021/05/pandemic-plan-chart-1…

The war on general purpose computing will arrive, finish quickly and be won by the totalitarians. Normal computers will not be permitted to produce code. All developers will have to submit passport and dna before being allowed to work. Computers capable of producing code will be accounted for centrally, it will be illegal to own one without a licence. Cash will be done away with by the following means or similar: https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-inter…

The article is about a post on the IMF's blog by Arnoud Boot, Peter Hoffmann, Luc Laeven, Lev Ratnovski [1], which itself is basically just summarizing a more detailed working paper by the same authors [2]. The working paper doesn't really contain any original research (at least on this topic); they cite a single paper by Tobias Berg, Valentin Burg, Ana Gombović, Manju Puri [3]. The IMF working paper/blog post concludes, on the basis of this paper, that a system "powered by artificial intelligence and machine learning" (ugh) can improve credit assessments using features such as "the type of browser and hardware used to access the internet". I feel kind of depressed that this needs to be said, but... 1. There is no causal link between user-agent and loan repayment. 2. Attaching high-value signals such as credit scores to such easily spoofed data as user-agent and browsing history has some amazingly obvious problems that are never mentioned. The level of technological and statistical incompetence on display here is rather astounding, and it's difficult for me to take any of this seriously even before the ethical questions begin. This is part of an ongoing trend I've noticed: the quality of human capital in financial services seems to be in rapid decline. The cream of the crop was scraped off by huge tech companies on the industry side. On the academic side, all the top students are choosing CS PhD programs instead of econ/finance and top-tier faculty are leaving core…

https://blogs.imf.org/2019/01/02/new-data-on-global-debt/ "The private sector’s debt has tripled since 1950. This makes it the driving force behind global debt. Another change since the global financial crisis has been the rise in private debt in emerging markets, led by China, overtaking advanced economies. At the other end of the spectrum, private debt has remained very low in low-income developing countries. Global public debt, on the other hand, has experienced a reversal of sorts. After a steady decline up to the mid-1970s, public debt has gone up since, with advanced economies at the helm and, of late, followed by emerging and low-income developing countries." -> Debt owned in the private sector isn't just about stock market but about all the small businesses which in the US are 99.9% of them (see https://www.chamberofcommerce.org/small-business-statistics/ ) -> Public debt is debt that we all deal with, and it might come as a surprise to you but a majority of people aren't actually rich What I'm trying to say here is that you can play on the technicality of the amount of people under poverty thresholds not being in debt because they can't even access debt, but it's not really changing anything about the people who ARE in debt being in significant amounts people who might not have the shoulders to take it on but are trying to get by and doing so as a requirement to get by.

The IMF has suggested that new forms of information such as search and browsing history, purchase history, and ISP to determine credit worthiness. Link to blog post below quotes: >> The use of non-financial data will have large effects on the provision of financial services. Traditionally, banks rely on the analysis of customer financial information from payment flows and accounting records. The rise of the internet permits the use of new types of non- financial customer data, such as browsing histories and online shopping behavior of individuals, or customer ratings for online vendors. >> Fintech resolves the dilemma by tapping various nonfinancial data: the type of browser and hardware used to access the internet, the history of online searches and purchases. Recent research documents that, once powered by artificial intelligence and machine learning, these alternative data sources are often superior than traditional credit assessment methods, and can advance financial inclusion, by, for example, enabling more credit to informal workers and households and firms in rural areas. [0] https://blogs.imf.org/2020/12/17/what-is-really-new-in-fintech/

> On a philosophical level, I think the flawed premise you’re presenting here is that inflation is a problem that needs to be solved. Inflation is unpopular because it’s effectively a tax on unproductive wealth. Inflation incentivizes investment because idle wealth will lose it’s value at the rate of inflation. Inflation is a tax on those without assets or the available capital to invest in assets. It's a form of wealth transfer to those with assets. Increasing economic inequality is not good for anyone, and some would say the US is already close to a breaking point. https://www.statista.com/statistics/219643/gini-coefficient-for-us-ind… https://blogs.imf.org/2020/12/11/when-inequality-is-high-pandemics-can…

IMF blog post, December 9, 2021, "Global Crypto Regulation Should be Comprehensive, Consistent, and Coordinated". https://blogs.imf.org/2021/12/09/global-crypto-regulation-should-be-co…

It is more secure against remote hacking and imposition of a serious negative interest. In a purely cashless society, the central bank could force a -10 per cent interest on all savings, thus forcing people to spend even if they don't want to. (This was, for example, discussed on the IMF blog pages: https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-inter… This is harder to do in economies where people can take their money out of the bank as cash. There, the lower limit for interest seems to be around -1 per cent.

I've seen this argument touted frequently in housing related threads and it always confuses me. Housing prices have soared over the majority of the developed world - dozens of countries[1]. Is NYMBYism and prop13 driving the housing crisis in Luxembourg? Chile? Estonia? Do you think the entire world property market, taxation and legislation is structured exactly like in the California bay area? The whole "just zone more high rises" argument is so obviously reductive, I can't help but think it's pushed primarily by property developers and speculators. Housing prices continuously rising to slurp up any marginal income has been studied by economists for a couple of centuries (rent extraction), and taxation solutions such as a Land Value Tax were suggested by Adam Smith himself. https://blogs.imf.org/2021/10/18/housing-prices-continue-to-soar-in-ma…

If we read into this article as pushing an agenda, then the agenda is probably written here. https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-inter…

I can't envisage a central bank digital currency for which the general public user can retain all the keys to an account, as per bitcoin wallets. Crypto people assure me that old style banks would gladly facilitate handing over complete control of all the keys to users but I'm entirely unconvinced. Due to this lack of control, I believe this is the intended endgame: https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-inter…

It can continue until people start withdrawing physical cash in large amounts, which will happen when the negative rate starts outweighing the cost and risk of storing cash. After that, further decreases of the interest rate can only work if cash withdrawals are restricted to prevent bank runs, or alternatively if the value of physical cash and digital deposits are decoupled. The IMF has posted something about the latter option[1]. [1] https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-inter…

From the IMF blog post[1]: > Even a well-paid expatriate moving to the United States can be caught in the conundrum of not getting a credit card for lack of credit record, and not having a credit record for lack of credit cards. > Fintech resolves the dilemma by tapping various nonfinancial data: the type of browser and hardware used to access the internet, the history of online searches and purchases. I enjoy the framing of this; give us the keys to the kingdom and we'll give you even more credit (to get yourself further into debt!) Of course it won't stop there, better pay down that mortgage before you search or buy the "wrong" thing if you want to keep your house (they won't take it outright, just raise the interest rate on your loan because you now represent a higher risk based on "new information") [1] https://blogs.imf.org/2020/12/17/what-is-really-new-in-fintech/

Yes, it is true, but the difference is that the US is also a fiscal union, which is not the case with the EU, making it fundamentally unworkable in its current state. https://blogs.imf.org/2018/02/21/the-euro-area-needs-a-fiscal-union/

The reason for this is that "deeply negative interest rates" are coming (to keep the ponzi scheme going) and they don't want people pulling money out of the banks and hoarding cash. https://www.youtube.com/watch?v=oT9vP_RoCdM https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-inter…

There's a big confusion here: - your $55 billions is only public debt. - the private debt is way higher (more than $130 trillions). Sources: - public debt: https://www.economist.com/content/global_debt_clock - total debt: https://blogs.imf.org/2019/01/02/new-data-on-global-debt/

This is very true, most people i talk to do not realise labour's share of income has been declining for 50 years straight. Here is a link by no other than the IMF: https://blogs.imf.org/2017/04/12/drivers-of-declining-labor-share-of-i…

https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-inter… tl;dr: by unlinking the value of cash vs electronic money, and manipulating the exchange rate.

Inequality has been increasing in China at a rate far outpacing the rest of the world, and the world at large has seen inequality continually increase despite improving living conditions for an increasing number of people. From the IMF: "China has moved from being moderately unequal in 1990 to being one of the world’s most unequal countries." https://blogs.imf.org/2018/09/20/chart-of-the-week-inequality-in-china…

The International Monetary Fond, not known to be populated by treehugging hippies with naturalistic fallacies as a major character trait, published this beautiful graph: https://blogs.imf.org/wp-content/uploads/2019/04/eng-april-4-cotw-sola… Nuclear now costs three times as much as solar & wind! And that data ist from 2017. Both technologies are also not showing any slowdown in improvements, while nuclear tends to get more expensive. The trend for batteries happens to be extremely similar. Nuclear is dead. Maybe people arguing against it in the 1980 were wrong. Maybe it’s safe. None of that matters, because it’s simply too expensive. And, increasingly, it’s also just too late: a nuclear power project takes 15 years, which is twice as much as we have. The only energy that still keeps it in the news is this weird tie-in with the culture wars, where, apparently, a certain segment likes nuclear power because it’s big, ugly, dangerous and sciency. They are living the future of the past.

Partly basing it on other discussions around it: https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-inter… And yes, the article absolutely does mention it: "CBDC Public Policy Rationale Advocates of CBDCs suggest that they are necessary, certainly useful, in addressing multiple issues emerging across the global financial system of late. These issues include: ... Zero-lower bound interest rates (i.e., negative interest rates) – the existence of physical cash results in the severe curtailment of the ability of central banks to lower official interest rates below the zero bound (i.e., implement negative nominal interest rates) given the risk that citizens are likely to withdraw from the financial system by hoarding physical cash if negative nominal interest rates are implemented[12]. " If that's part of the rationale, what do you think is implied about the continuing existence of physical cash?

I guess that we both agree that you need resources to create wealth. Without resources, wealth cannot be created. I guess, that we both agree that you need education, knowledge and science to use that resources in an efficient way. That technology+resources create wealth. My argument, for which I provide some links, is that you need to redistribute that wealth so everybody profits form it for that wealth to be sustainable: "Economic growth provides the basis for overcoming poverty and lifting living standards. But for growth to be sustained and inclusive, its benefits must reach all people." * https://blogs.imf.org/2017/09/20/growth-that-reaches-everyone-facts-fa… * https://www.oecd.org/newsroom/inequality-hurts-economic-growth.htm But, maybe we have different values and that is the root cause of our disagreement. I think that giving everybody enough to cover their needs is the goal of society. To remove poverty is a goal to achieve. Higher economic output is not a goal, but a means to achieve the goal of humans well being. Improving the economy is a means for humans to live better.