Thursday, May 16, 2019

Twisting the Treasury curve does not help

"Attempts to carry out economic reforms from the monetary side can never amount to anything but an artificial stimulation of economic activity by an expansion of the circulation, and this, as must constantly be emphasized, must necessarily lead to crisis and depression. Recurring economic crises are nothing but the consequence of attempts, despite all the teachings of experience and all the warnings of the economists, to stimulate economic activity by means of additional credit..."--Ludwig von Mises, The Theory of Money and Credit
Central banks have special rules, the bank members are congested via entry and exit fees.  In sandbox theory this is the implication.  In the time of Mises, the math guys refused to consider three color trades. We have since changed our minds.

Currency banks fit the Mises definition, they always move the curve to more constantly sloped than before. Currency bankers are two color, have no right to coin bias unless they run for a profit. But the theoretical model does not include a profit, since the spreadsheet function is know by all.
 

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