Cato's 37th Annual Monetary Conference: A Shadow Review of Fed Policy
They deal with a dichotomy.
There is the utter simplicity of Bitcoin and its monetary rules and there is the utter complexity of central banking. The difference being that the Fed has to guarantee government interest payments, an impossibility it they want stability. Most of the complexity can be reduced if we assume some partial default on government debt.
The one message they need is simple, allowing some partial default allows traders to price what they already know, governments go partially broke now and then. If we bet the process we have no need for a shock, as in Nixon Shock. But we end up with a three sided trading pit for central bankers, there has to be an ongoing random default process.
The one message they need is simple, allowing some partial default allows traders to price what they already know, governments go partially broke now and then. If we bet the process we have no need for a shock, as in Nixon Shock. But we end up with a three sided trading pit for central bankers, there has to be an ongoing random default process.
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