Is the current inflation temporary or persistent.

[Flat Bear]

59 minutes ago, Timm said:

This is just nonsense.

As I pointed out above (and as you have pointed out in the previous link you supplied and I quoted), it is the central bank that pays interest to the banks - on the reserves at the CB that were deposited by the banks when they sold the debts to the central bank.

Yes. I think you are right here. I missed this, I think the author got this mixed up. Don't think the FED would be different? But freddie mac and fannie mae might make the situation different? I'll have to check it out.

 

Hello Flat Bear and thank you for your civilised reply.

I'm sorry my post was a bit rude, it was not meant to be.

Thank you. I also don't suffer fools but this is a lot more complicated to really understand the consequences of and we can only go on the facts we can see. My view is they had absolutely no idea on what they were doing and as time went on they truly believed they found the magic money tree and there would not be any consequences. They did a bit and found no inflation so they did a bit more, again the same so they just continued. The inflation they could not see was latent and hidden. So the affect of QE was inflationary, we just havn,t seen it yet and it will only happen with higher interest rates and QT.

[Timm]

6 minutes ago, Flat Bear said:

Yes. I think you are right here. I missed this, I think the author got this mixed up. Don't think the FED would be different? But freddie mac and fannie mae might make the situation different? I'll have to check it out.

 

6 minutes ago, Flat Bear said:

Thank you. I also don't suffer fools but this is a lot more complicated to really understand the consequences of and we can only go on the facts we can see.

Yes indeed.

For the record, I don't see myself as clever, but I do flatter myself that I can see flaws in arguments more easily than others can (both the arguments of others, and of my own when they are pointed out to me and explained).

6 minutes ago, Flat Bear said:

My view is they had absolutely no idea on what they were doing and as time went on they truly believed they found the magic money tree and there would not be any consequences. They did a bit and found no inflation so they did a bit more, again the same so they just continued. The inflation they could not see was latent and hidden. So the affect of QE was inflationary, we just havn,t seen it yet and it will only happen with higher interest rates and QT.

I agree with the bolded part 100%. What were we arguing about?

In terms of the first unbolded part, there were things that they did for a reason that I don't understand. I don't know why they locked themselves into a variable rate payment on QE funds to the banks. A payment to the banks - I get that. It shows they have not just lost control and are printing willy nilly. Also, the sums involved (to prop up the financial system) were very very substantial. They must have realised that printing hundreds of billions could easily have resulted not just in a run on the pound, but a sudden and catastrophic loss of any belief in sterling as a store of value. But a floating rate? I just don't get that.

The second bolded part I do not agree with. I think we have seen (some of?) the inflationary effect of QE.

[Flat Bear]

10 minutes ago, Flat Bear said:

Yes. I think you are right here. I missed this, I think the author got this mixed up. Don't think the FED would be different? But freddie mac and fannie mae might make the situation different? I'll have to check it out.

Ok, re-read this a few times and I think they were saying lending these very large amounts of credit at next to zero percent interest rates was a very good deal for Government. If the interest rates did go negative the banks would pay the Government for loaning the money they in turn got from the Government. Complicated heh?

26 minutes ago, Timm said:

 Out of interest, what was your motivation in posting them?

There were a few reasons but a main reason was to show the debate that has been going since 2014 on whether QE was inflationary or deflationary. The end result we see today is that, to date, QE has not been inflationary, quite the contrary. BUT why? Simply because this credit/debt had no real cost to it as it was next to zero. One of the articles mentioned "below 1.75%" probably an arbitory figure but depending on the cost of servicing this growing debt 1.75% still made repayments low especially if "real" inflation was running at more than this rate and the debt would erode due to inflation.

29 minutes ago, Timm said:

 

For at least a decade, I have described myself as a Biflationist* - credit and "money" are not the same. For decades (with one blip), assets bought with borrowed money have increased in real terms, whilst things bought with "money" have fallen in real terms. I suppose, because I am having to use the qualifier "real terms", that is (overall) an inflationary environment. But currently, things bought with borrowed money are falling in real terms, whilst those bought with "money" are rising.

 

I actually agree with this. M0 money really is different to M2.

The banks live in a different world and are in a different economic reality.

[Timm]

5 minutes ago, Flat Bear said:

Ok, re-read this a few times and I think they were saying lending these very large amounts of credit at next to zero percent interest rates was a very good deal for Government. If the interest rates did go negative the banks would pay the Government for loaning the money they in turn got from the Government. Complicated heh?

Hmmmm.

That is a possible interpretation, but I would disagree.

You posted several links. The last two were from 2014 and 2022. If that quote was from the 2014 link, then your interpretation would make sense, but from 2022? Sorry, but I think the author made a mistake.

I make lots of mistakes - that is why most of my posts are edited.

But I don't have an editor to catch mistakes before publication.

5 minutes ago, Flat Bear said:

There were a few reasons but a main reason was to show the debate that has been going since 2014 on whether QE was inflationary or deflationary. The end result we see today is that, to date, QE has not been inflationary, quite the contrary. BUT why? Simply because this credit/debt had no real cost to it as it was next to zero. One of the articles mentioned "below 1.75%" probably an arbitory figure but depending on the cost of servicing this growing debt 1.75% still made repayments low especially if "real" inflation was running at more than this rate and the debt would erode due to inflation.

This goes to the hear of our disagreement.

I think QE is inflationary.

But in the face of a deflationary disaster, it stabalised things for a long time.

5 minutes ago, Flat Bear said:

I actually agree with this. M0 money really is different to M2.

The banks live in a different world and are in a different economic reality.

Thank you. Agreed.

 

But now I have to go because:

1. I need to catch on work after a busy day on HPC.

2. My boy deserves half an hour of minecraft vids before bed.

[Flat Bear]

1 hour ago, Timm said:

This is just nonsense.

As I pointed out above (and as you have pointed out in the previous link you supplied and I quoted), it is the central bank that pays interest to the banks - on the reserves at the CB that were deposited by the banks when they sold the debts to the central bank.

As to the interest paid on the actual "debts" (usually bonds), this will be paid by the originator (usually but not always the CB), to the holder - the Central Bank. The banks don't pay the CB on the bonds they sold to the CB!

 

Trying not to complicate things BUT.

There are three players in this QE system.

Government

BOE (who are independent of Govenment?)

Banks (think there are several that are able to perform this function with a mandate)

So the BOE creates a debit for the Banks to create a credit who use this money for the purchase of government debt and selected extremely safe asset classes. QE in a nutshell.

Can it go on forever? Yes with interest rates a zero the amounts and frequency is limitless.

BUT what happens when interest rates go higher, much higher than inflation? Collapse.

 

[frederico]

Right so here we go, it’s not that complicated, qe started in part because Gordon Brown wanted to win an election, he was desperate.

Secondly qe did not initially cause inflation because it initially just compensated for the money that disappeared as a result of the great financial fraud. Actually I should say bank assets rather than money.

presumably the run and bankruptcies of banks was due to not enough income from ninja loans.

So that was that, then covid hit and strangled economic activity again. So again qe did not lead to inflation.

Now however the world has sort of written of the ninja loans and started again. So that’s ok, Covid has sort of gone, the economies are running anyway. So that strangulation has receded. So back to the norm possibly and there’s too much credit available and a lot more demand. Production can’t keep up for all sorts of reasons. Hence you get inflation,

Now as someone pointed out above if you borrow 500k and buy a house, the person who sells it now has 500k. If for example that was sold to pay care home costs or to sort a will. That 500k that came out of nothing has now become something and is spent in the wider economy. That has to be inflationary as well.

So long as the borrower carries on paying the bank is ok, but if the money creation is inflationary then rates have to go up as they don’t know any other way.

Then the real fun begins, if the asset value drops the loan becomes more risky and more expensive. If it rises we use it to secure more borrowing and this feeds inflation.

So this approach is never going to work, qt has to accelerate, banks have to adjust to lower asset values. The alternative is a never ending cycle of boom and bust which our old friend Gordon said he was going to end.

The Bank of England have said if house prices rise people feel rich and spend more this gives economic growth they say. But it’s growth through debt that is inflationary to control the inflation rates must rise apparently. Hmm I don’t know it may be flawed.

[frederico]

24 minutes ago, Flat Bear said:

Trying not to complicate things BUT.

There are three players in this QE system.

Government

BOE (who are independent of Govenment?)

Banks (think there are several that are able to perform this function with a mandate)

So the BOE creates a debit for the Banks to create a credit who use this money for the purchase of government debt and selected extremely safe asset classes. QE in a nutshell.

Can it go on forever? Yes with interest rates a zero the amounts and frequency is limitless.

BUT what happens when interest rates go higher, much higher than inflation? Collapse.

 

I thought they used qe to buy government bonds from banks and provide more liquidity.

This would explain why the treasury has to pay the boe.

[Flat Bear]

29 minutes ago, frederico said:

I thought they used qe to buy government bonds from banks and provide more liquidity.

This would explain why the treasury has to pay the boe.

The treasury does not pay the BOE (so I am led to believe) this would be impossible and quite unethical. The BOE must loan to the commercial banks and then these banks can (lot of arm twisting) buy the government bonds and the Government pay the banks who in turn either pay back the BOE or use the credit to buy more bonds or possible loan out to safe asset purchases such as property. With this debt/credit being so plentiful and cheap the Banks raked it in and the Government were happy because they could service there growing debt mountain without problems. In the meantime the deficite grew and grew and the debt became so big it became bigger than the countries annual GDP which a few years earlier was thought to be impossible and totally unsustainable, but here we are.

It was a difficult situation when the Government owned a very large proportion of certain banks such as bank of scotland as there was definate moral hazzard there. 

Edited to add

If the BOE tighten (QT) it is highly unlikely the Government will be able to off load their debt (bonds) in the open market place. Bond prices would rise. This is why QT might not be an option and we are in a terrible frightening place.

Edited August 22, 2023 by Flat Bear

[frederico]

Apart from Bloomberg and the telegraph reporting ‘Losses on BOE QE Program Cost UK Taxpayers Almost £30 Billion in Past Year’

This is paid directly from the treasury to the boe.

The boe is already selling qe bonds and have off loaded a small fraction of the total.

Banks have to have certain amount of liquidity as a percentage of deposits This must be offset by loans which are assets, however fractional reserve banking means they also have to have some cash for the loans.

During the gfc, the assets disappear the banks balance sheet goes down, the confidence in the bank plummets and you get a run on the bank, the only liquidity they have left are government bonds and other things such as property they can’t sell in a hurry, so the boe prints money and buys the bonds, the banks then have fresh liquidity which can be used to placate investors.

However this is not sustainable for Zimbabwean reasons and the boe has to correct it hence QT, the treasury has to pay interest on these bonds regardless who owns them.

The boe still owns circa 800 billion of gilts,

Creating money from nothing will never work unless those loans are against incredibly secure assets and to very low risk borrowers. Obviously these criteria were tightened after the gfc but as is always the case the criteria have been loosened as tptb become blasé and memories fade. Soon you end up with loads of dodgy loans again, if the housing market tightens because rates are put up, the loans just become more dodgy. If house prices drop the loans become even more dodgy and if unemployment rises even more so.

Basically the uk economic model of imports and services will never work unless the city of London economy expands to 2 or 3 times its current size.

[scottbeard]

15 hours ago, Flat Bear said:

Why did QE not cause inflation?

The Fed's version of QE was to follow my recommendation to purchase non-performing assets from banks – in other words, it purchased their bad debts, thus cleaning up their balance sheets. This did not inject any new money into the US economy and so did not create inflationary pressures.20 Mar 2023

No it didn't DIRECTLY inject money, but it stopped banks going under and stabilised their balance sheets.  Both allowed more lending, and that is what injected the money.

15 hours ago, Flat Bear said:

A very good artical IMO explaining why the massive QE in the states (and here) did not cause hyperinflation which it should have done according to all known economic theories to date and it is a very good question

...

QE was an emergency measure used to stimulate the economy and prevent it from tumbling into a deflationary spiral.

And the explanation is ... once again ... that it prevented deflation, not caused it

14 hours ago, Timm said:

QE was an inflationary measure designed to combat deflation.

+1

12 hours ago, frederico said:

Secondly qe did not initially cause inflation because it initially just compensated for the money that disappeared as a result of the great financial fraud.

+1

[Flat Bear]

9 hours ago, frederico said:

Apart from Bloomberg and the telegraph reporting ‘Losses on BOE QE Program Cost UK Taxpayers Almost £30 Billion in Past Year’

This is paid directly from the treasury to the boe.

The boe is already selling qe bonds and have off loaded a small fraction of the total.

Banks have to have certain amount of liquidity as a percentage of deposits This must be offset by loans which are assets, however fractional reserve banking means they also have to have some cash for the loans.

During the gfc, the assets disappear the banks balance sheet goes down, the confidence in the bank plummets and you get a run on the bank, the only liquidity they have left are government bonds and other things such as property they can’t sell in a hurry, so the boe prints money and buys the bonds, the banks then have fresh liquidity which can be used to placate investors.

However this is not sustainable for Zimbabwean reasons and the boe has to correct it hence QT, the treasury has to pay interest on these bonds regardless who owns them.

The boe still owns circa 800 billion of gilts,

Creating money from nothing will never work unless those loans are against incredibly secure assets and to very low risk borrowers. Obviously these criteria were tightened after the gfc but as is always the case the criteria have been loosened as tptb become blasé and memories fade. Soon you end up with loads of dodgy loans again, if the housing market tightens because rates are put up, the loans just become more dodgy. If house prices drop the loans become even more dodgy and if unemployment rises even more so.

Basically the uk economic model of imports and services will never work unless the city of London economy expands to 2 or 3 times its current size.

Yes

The BOE (Britains central bank) was the first central bank in the group of seven richest nations to actively sell QE bonds directly to investors in 2022. This was unpresidented and had moral hazzard written all over it. It makes you wonder how sterling has kept any value at all. The only reason I can see sterling keeping its value is that all the other major currencies have also done something similar with their currencies. See my thread 2022 Reverse Currency Wars started July 5th 2022.

Creating money from nothing will never work unless those loans are against incredibly secure assets and to very low risk borrowers. Obviously these criteria were tightened after the gfc but as is always the case the criteria have been loosened as tptb become blasé and memories fade. Soon you end up with loads of dodgy loans again, if the housing market tightens because rates are put up, the loans just become more dodgy. If house prices drop the loans become even more dodgy and if unemployment rises even more so.

Absolutely correct.

[Flat Bear]

6 minutes ago, Flat Bear said:

Yes

The BOE (Britains central bank) was the first central bank in the group of seven richest nations to actively sell QE bonds directly to investors in 2022. This was unpresidented and had moral hazzard written all over it. It makes you wonder how sterling has kept any value at all. The only reason I can see sterling keeping its value is that all the other major currencies have also done something similar with their currencies. See my thread 2022 Reverse Currency Wars started July 5th 2022.

Creating money from nothing will never work unless those loans are against incredibly secure assets and to very low risk borrowers. Obviously these criteria were tightened after the gfc but as is always the case the criteria have been loosened as tptb become blasé and memories fade. Soon you end up with loads of dodgy loans again, if the housing market tightens because rates are put up, the loans just become more dodgy. If house prices drop the loans become even more dodgy and if unemployment rises even more so.

Absolutely correct.

I have condradicted my own previous post but up until 2022 the first post was correct.

[dugsbody]

On 22/08/2023 at 21:34, Flat Bear said:

If the BOE tighten (QT) it is highly unlikely the Government will be able to off load their debt (bonds) in the open market place. Bond prices would rise. This is why QT might not be an option and we are in a terrible frightening place.

Do you mean bond yields would rise (prices would fall)?

[staintunerider]

On 22/08/2023 at 20:46, Flat Bear said:

Trying not to complicate things BUT.

There are three players in this QE system.

Government

BOE (who are independent of Govenment?)

Banks (think there are several that are able to perform this function with a mandate)

So the BOE creates a debit for the Banks to create a credit who use this money for the purchase of government debt and selected extremely safe asset classes. QE in a nutshell.

Can it go on forever? Yes with interest rates a zero the amounts and frequency is limitless.

BUT what happens when interest rates go higher, much higher than inflation? Collapse.

 

Should the interest rates not at least match inflation less 2% target....

The recent rises have obviously buckled  the bulkheads of this crazy market and that is an indication of the lunacy of the low rates and stratospheric rise in prices....if the bulkheads are buckling now..what if they went up  a few more percentage points ? (And that would just be historic average rates..)

Truly a castle built on a swamp...

 

Personally the fact housing was never part of the inflation figures does that explain show how they kept the inflation numbers down...if so amazed the market let them get away with that and the low rates for so long..

EDIT: I think i have that last paragraph wrong as if correctly understand the QE went into asset prices so did not show as inflation...is that not why they don't include rents or property prices or ? Confused on this tbh..

 

Edited August 25, 2023 by staintunerider

[staintunerider]

On 29/08/2022 at 19:17, Flat Bear said:

I can see from these early replies, the majority of posters on this forum really have no idea of the dire situation we are in. Absolutely no idea.

They all believed in the MMT and all it needs is a little TLC and it will be up and running again and we can once again stimulate the economy and with a little more QE which as we all know actually creates deflation everything will be back on track.

I know you are all totally deluded, and it may take a few years before you fully understand what the situation was now.

Do not get me wrong. I too believe QT in the states will fail and QT in the UK cannot really start. The whole economic model of fiat currency could well be destroyed by the phenomenon known as QE.

I never believed in MMT and I don;t think anything other than a correction will start us on the road to where we need to go....Its obvious you have some really good insight much more than me so I'm going to read through all of this again as theres quite a lot i havent; got my head around....When i started getting into all this....i quickly realised i was of the Austrian School....the most interesting thread ive come across which i think it really relevant to a lot of the other discussions on other threads...

Edited August 25, 2023 by staintunerider

[staintunerider]

On 29/08/2022 at 19:17, Flat Bear said:

I can see from these early replies, the majority of posters on this forum really have no idea of the dire situation we are in. Absolutely no idea.

They all believed in the MMT and all it needs is a little TLC and it will be up and running again and we can once again stimulate the economy and with a little more QE which as we all know actually creates deflation everything will be back on track.

I know you are all totally deluded, and it may take a few years before you fully understand what the situation was now.

Do not get me wrong. I too believe QT in the states will fail and QT in the UK cannot really start. The whole economic model of fiat currency could well be destroyed by the phenomenon known as QE.

Double posts apologies

Edited August 25, 2023 by staintunerider

[staintunerider]

On 29/08/2022 at 19:17, Flat Bear said:

I can see from these early replies, the majority of posters on this forum really have no idea of the dire situation we are in. Absolutely no idea.

They all believed in the MMT and all it needs is a little TLC and it will be up and running again and we can once again stimulate the economy and with a little more QE which as we all know actually creates deflation everything will be back on track.

I know you are all totally deluded, and it may take a few years before you fully understand what the situation was now.

Do not get me wrong. I too believe QT in the states will fail and QT in the UK cannot really start. The whole economic model of fiat currency could well be destroyed by the phenomenon known as QE.

 

Edited August 25, 2023 by staintunerider

[staintunerider]

On 29/08/2022 at 20:03, Dreamcasting said:

Inflation will come down once an appropriate number of people have been killed off. The energy crisis, coupled with companies going bust leading on to job losses and extreme food costs will do the job.

Let's face it we could all survive on less than half of the food on the shelves...get rid of all the crap, crisps ..cakes etc....30 different flavours of tonic water...and so on....a lot of fatsos would not be happy though and struggle to adjust...

Utilities on the other hand in this cold climate coupled with high rents and now expensive mortgage payments....i remember a british ex pat in Greece said and I quote

" It's easier to be poor in Greece than in the UK"

[zugzwang]

On 23/08/2023 at 07:01, frederico said:

Basically the uk economic model of imports and services will never work unless the city of London economy expands to 2 or 3 times its current size.

 

Vastly expanding the City's rotten domain was surely Mark Carney's ambition a decade ago.

https://www.bis.org/review/r131025g.pdf

Quote

As we have recently been painfully reminded, a specialisation in financial services carries
risks as well as rewards. And those risks will grow, unless we put global banks and markets
on a sounder footing. Suppose, for example, that UK-owned banks’ share of global banking
activity remains the same and that financial deepening in foreign economies increases in line
with historical norms. By 2050, UK banks’ assets could exceed nine times GDP, and that is
to say nothing of the potentially rapid growth of foreign banking and shadow banking based
in London.
Some would react to this prospect with horror. They would prefer that the UK financial
services industry be slimmed down if not shut down. In the aftermath of the crisis, such
sentiments have gone largely unchallenged.
But, if organised properly, a vibrant financial sector brings substantial benefits. Today
financial services account for a tenth of UK GDP and are the source of over 1 million jobs. 5
Two thirds of those are outside London, including jobs in asset management in Edinburgh,
transaction processing in Bournemouth and insurance in Norwich. Being at the heart of the
global financial system also broadens the investment opportunities for the institutions that
look after British savings, and reinforces the ability of UK manufacturing and creative
industries to compete globally. Not to mention that financial services represent one of the
UK’s largest exports.
More broadly, London’s markets serve a vital global role. London acts as Europe’s window to
global capital; is a centre of emerging market finance; and can play an important role in the
financial opening of China.
The UK’s financial sector can be both a global good and a national asset – if it is resilient.

 

[scottbeard]

1 minute ago, staintunerider said:

Let's face it we could all survive on less than half of the food on the shelves...get rid of all the crap, crisps ..cakes etc....30 different flavours of tonic water...and so on....a lot of fatsos would not be happy though and struggle to adjust...

Depends which half, though.

On 29/08/2022 at 20:03, Dreamcasting said:

Inflation will come down once an appropriate number of people have been killed off. The energy crisis, coupled with companies going bust leading on to job losses and extreme food costs will do the job.

Oh please.  Do you really think people will be literally dying in large numbers from being able to afford food and energy in the UK?  More HPC brand hyperbole.  We hand out benefits hand over fist to keep people alive.  Billions of pounds of them.  Not having a nice life, but alive.

[zugzwang]

16 minutes ago, staintunerider said:

I never believed in MMT and I don;t think anything other than a correction will start us on the road to where we need to go....Its obvious you have some really good insight much more than me so I'm going to read through all of this again as theres quite a lot i havent; got my head around....the most interesting thread ive come across which i think it really relevant to a lot of the other discussions on other threads...

There are no good models in economics and very few useful ones. MMT is one of the useful ones because it seeks to integrate the dynamics of banking and credit money creation into the economy unlike, say, DSGE models which as a rule do not.

[staintunerider]

On 31/08/2022 at 18:58, Flat Bear said:

 

Yes, the BOE thinks inflation will suddenly fall back to 2% by the 1st QTR of 2024.

"

Blimey do they really ? I don;t think anyone else does except big mortgage holders and they are just hoping..

I'm not disagreeing with you just shocked if thats what the BoE think....and Bailey imo isnt even worth mimimum wage...just a poser in an expensive suit....

[winkie]

26 minutes ago, staintunerider said:

Let's face it we could all survive on less than half of the food on the shelves...get rid of all the crap, crisps ..cakes etc....30 different flavours of tonic water...and so on....a lot of fatsos would not be happy though and struggle to adjust...

Utilities on the other hand in this cold climate coupled with high rents and now expensive mortgage payments....i remember a british ex pat in Greece said and I quote

" It's easier to be poor in Greece than in the UK"

We don't have to get rid of anything, we have just got to stop buying it.....then it would rid itself.

Easier to be poor in other places because incomes are less and inequality not as great therefore prices adapt to the average.......to what the majority can afford to spend to remain poor but happy.....takes more than money to be happy and feel rich.

[staintunerider]

On 20/08/2023 at 20:05, Dreamcasting said:

People are just guessing because everyone is entitled to an opinion. And inflation is going to be different for everyone based on their own personal circumstances and spending.

I personally don't see an inflation rate normalised at over 6% however. Not many people at all would be able to keep up for many years without going bust along with their employment. I also think people here are overthinking things. Basically, if you're in debt and you can no longer pay, you get your toys taken away from you, just like in the past. That's all there is to it. 

And thats what happened in the 90's when property slumped they often gave their toys(houses)back....when they no longer see the value they don't cling on as tight especially if they have other options...sometimes they have no other options and its eventually taken anyway....for some BTL eg houses have become toys but for many they are home...thats what is so sick and twisted.....no lessons learned from the 90's

[staintunerider]

On 20/08/2023 at 21:26, Jinxed said:

Theres a staggering amount of bearish sentiment about the US housing market over the last few weeks, perhaps we'll see some sort of new type of gold standard is going to be announced shortly by the BRICS countries, I like the idea of crypto not being bank controlled, but its really just another fiat isnt it? 

crypto is fiat but its not a currency its a speculative token.

Bitcoin is decentralised but its still fiat, not a currency and a speculative token.

It was interesting when first came along a peer to peer currency that flopped at that and then the cheerleaders said hey no its a "store of value" kind of reminded of those quangos that find other reasons to continue to exist so they milk whatever they can...

I note the Chinese have clamped down on it regardless of it being beyond the central bank in terms of being decentralised the people are not and there are severe penalties now around it....