Checking accounts are not reserve balances, so the reserve balances drop. But we will not know it until the end of the month. When Fed reserve balances drop, then seigniorage taxes go up and the collar drops in value.
Hence the infinite money loop. The wealthy take some reserves and buy bitcoin, then move the rest of reserves to checking accounts. They wait one month, everyone sees the new higher seigniorage fees and the dollar drops. Then the wealthy sell their bitcoin for more dollars than they spent.
Wash rinse and repeat. It is an infinite loop, it is the side effect that worried Powell, and it is an infinite money maker and will shake the system to its core. Powell is stuck. He indicated this game will go for eight or more years, and there is no escape. Given the current status quo, about ten people will own every dollar in the economy, and you can bet Soros is one of them. We be screwed, we be ready to devalue and stop the madness.
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