Traders know about the central bank seigniorage power, it is well measured over the previous two expansions since 2001. So the next 15 years the markets will act as if there was a two percent value added tax on dollar transactions.
But mainstream economics predicts we can maintain a half point deflation for a long time. And we cannot with a two percent value added tax collected by the fiat banks. We have lost granularity in the tax dollar, liquidity is the same as granularity.
The Fed is at a sudden legal stop. It is not the one that should be double spending or collecting taxes, both of those are Treasuries job. A hard stop, the legal famework for the Fed currently and someone will notice the taxation without representation.
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