I feel like I’m talking to ChatGPT lol. You talk a lot of convoluted words but without substance.
Oh I see, first you accuse me of not understanding how Bancor works, and then when I give a technical explanation you accuse me of using big words that are evidently past your reading comprehension level.
If we are under a bancor system today, then China would accumulate vast trade surplus in the form of bancors (instead of dollars), and if they choose to hoard like they did with the dollar, they would literally lose those bancors. Worse, those bancors would become the overdraft basis of other countries.
The whole idea of Bancor was to act as a neutral exchange medium, not a store of value. Meanwhile, nothing would prevent China from holding other assets as a store of value, such as physical commodities, or just converting Bancors back to their own currency.
For a country like China running a large surplus, the strategy would be to invest Bancor credits internationally by financing development or purchasing goods and services from deficit nations. The automatic adjustment mechanism simply makes it costly to hoard the currency. Thank you for coming to my TED talk.
Similarly, China would not be able to lend its dollars in the form of infrastructure loans to Belt and Road countries, and without this mechanism, how is China going to invest in those countries?
Even under a Bancor system, bilateral swaps and other financial tools wouldn’t magically disappear. However, Bancor’s design already aims to encourage investment and lending from surplus nations. It compels them to either boost imports or use their excess credits for stuff like international investment and loans. All the system does is make Bancor-denominated investments the most efficient way to utilize surpluses, reducing the reliance on complex bilateral agreements for managing major trade imbalances.
Once again, you could make less of a nonsense claim by just spending a few minutes to think through what you think you’re saying and walking through the steps of how the system actually works.
Oh I see, first you accuse me of not understanding how Bancor works, and then when I give a technical explanation you accuse me of using big words that are evidently past your reading comprehension level.
The whole idea of Bancor was to act as a neutral exchange medium, not a store of value. Meanwhile, nothing would prevent China from holding other assets as a store of value, such as physical commodities, or just converting Bancors back to their own currency.
For a country like China running a large surplus, the strategy would be to invest Bancor credits internationally by financing development or purchasing goods and services from deficit nations. The automatic adjustment mechanism simply makes it costly to hoard the currency. Thank you for coming to my TED talk.
Even under a Bancor system, bilateral swaps and other financial tools wouldn’t magically disappear. However, Bancor’s design already aims to encourage investment and lending from surplus nations. It compels them to either boost imports or use their excess credits for stuff like international investment and loans. All the system does is make Bancor-denominated investments the most efficient way to utilize surpluses, reducing the reliance on complex bilateral agreements for managing major trade imbalances.
Once again, you could make less of a nonsense claim by just spending a few minutes to think through what you think you’re saying and walking through the steps of how the system actually works.