Sandbox is a commodity service

PayPal Raises Crypto Buying Limit to $15K/Week for ‘Eager’ Customers

And panic is setting in at the regulated banks. PayPal can effectively shard its hot wallet, put it on a short chain and holders of crypto can check their account with any trusted miner. Then they cans allows swaps across accounts.   So it is pretty clear PayPal is grabbing the brass ring for shadow banking. Regulated bank panic is justified.

But this time is different:

Lilley and Rogoff could argue that central banks in Europe and Japan haven’t driven rates far enough below zero, but one could just as well argue that central banks such as the Fed did not do enough QE, and did not adopt aggressive enough forward guidance. In particular, I’ve advocated a policy of targeting the level of nominal GDP, and adopting a “whatever it takes” approach to quantitative easing to hit the target.4 In my view, this would be more politically feasible in America than steeply negative interest rates, and just as reliable.

The 'what ever it takes' is code word for devaluation.  None of the other possibilities work when shadow banking is a short, online PayPal trade.  Every citizen with a bank account can jump into shadow banking with the simple knowledge they use already. 

From the same paper:

If the Fed aggressively targeted NGDP growth at a higher rate—say 5%/year—then nominal interest rates would stay above zero and there would be no need for quantitative easing.

 The Fed cannot target NGDP because they are restricted to double entry accounting. The law and constraints are a hard bound.  NGDP can only be targeted by Treasury  double spending

In the comment section to the Hamilton paper, Peter Ireland provided a very elegant explanation of the monetarist perspective on QE. Even when the Fed pays interest on bank reserves, the predictions of the quantity theory of money continue to hold for permanent injections of new money. A permanent doubling of the money supply will lead to a permanent doubling of the price level, in the long run.

 There is no long run.  This is again the NGDP issue, the bank cannot promise permanency, they are the currency issuer, Treasury is the defaulter.  Currency issuers cannot default on themselves, by definition.

In a forthcoming Mercatus Center paper, I argue that interest rates are not a reliable tool of monetary policy, precisely because we don’t know which effect dominates in a given situation

No, rate targeting fails because it introduces term uncertainty and you are right back in the same spot.  Ultimately the Fed is an accountant, a poor one but still an accountant. Money only tells you what happened, ex post. The currency issuer is most accurate when it engineers an interest swap asynchronously as needed. It cannot guarantee the future path and economists are gasping at straws.

First, we should be very skeptical when people claim that monetary policy cannot control inflation. That was a widely held view during the 1970s, and turned out to be false.

From 1972 to 1982 inflation was out of control, the Fed could not stop it. In 1982 prices were settled in the commodities market after the Nixon devaluation.  Economists are completely fooled on this. Direct inflation is a Treasury function, it was really Treasury that engineered the gold default.

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