Bitcoin Forum
December 15, 2017, 11:10:25 AM *
News: Latest stable version of Bitcoin Core: 0.15.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: [1] 2 »  All
  Print  
Author Topic: If I was chairman of the Fed  (Read 2549 times)
billyjoeallen
Legendary
*
Offline Offline

Activity: 980


Hide your women


View Profile WWW
January 29, 2014, 04:52:57 AM
 #1

This is a fantasy thought experiment. If I was Chairman of the U.S. Federal Reserve, the most powerful central bank in the world, I would be buying bitcoin like mad. I would use the precedent set by the purchase mortgage-backed securities (intervening in a market other than government debt) to authorize a stealth acquisition of as much BTC as possible before word got out and then I'd buy it all. I'd guess I'd get about 20-30% of all bitcoins in circulation before the price skyrocketed into the millions, but I'd keep buying anyway.

I'd keep buying until bitcoin hit $1 Billion/BTC. and then I'd keep buying.

I'd do this because the Fed is in a massive dilemma right now. The fed has a dual mandate for price stability and full employment.  This cannot possibly be achieved because capital has been so misallocated by decades of money printing that the necessary correction to reallocate capital into the hands of the people most likely to use it most productively would cause a horrendous depression that would dwarf the great depression in size and scope. To make matters worse, staving off that depression ca only be accomplished by massive increases in the Fed's balance sheet, which increases the money supply and causes inflation and exponentially growing rates.

So basically the Fed is printing money only they call it "quantitative easing." Inflation was getting too high, so they tried printing a little less. They're still printing billions every month, but just slowing down the amount of counterfeiting has caused the capital markets to dive.

So instead of creating money out of thin air and giving it to the banks, I would create money out of thin air and give it to sellers of bitcoin. This would cause upward pressure on prices, but it would be counterbalanced by the downward pressure on prices caused by rising interest rates. The banks would be saved because people would be borrowing as much money as possible in order to buy bitcoin.  The profits and interest from these loans would offset the losses from all of the bad mortgage loans that would likely go into default. People would eventually get the idea that it was smart to only borrow money to buy bitcoin and not to buy anything else. The would learn to only sell bitcoin when they absolutely needed to. This would encourage capital formation, which is necessary for increased productivity and sustainable economic growth.

Assuming a neutral reaction from congress (this is a fantasy, remember?), I'd use my unlimited ability to create new money to buy bitcoin until I cornered the market. At that point, I'd create a policy of fixing the price of the bitcoin to the U.S. dollar, essentially making the dollar a bitcoin derivative. Due to bitcoin's limited supply, dollar deflation would start immediately, making U.S. exports prohibitively expensive. At the same time, imports would get cheaper and cheaper. To counter this, I would advocate a repeal of legal tender laws and allow legal transactions in any national currency, cryptocurrency, gold or whatever both parties agreed to.

Then I'd retire.






























insert coin here:
1Ctd7Na8qE7btyueEshAJF5C7ZqFWH11Wc

Open an exchange account at CampBX: options, lowest commissions, and best security
https://campbx.com/register.php?r=0Y7YxohTV0B
"With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless." -- Satoshi
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1513336225
Hero Member
*
Offline Offline

Posts: 1513336225

View Profile Personal Message (Offline)

Ignore
1513336225
Reply with quote  #2

1513336225
Report to moderator
1513336225
Hero Member
*
Offline Offline

Posts: 1513336225

View Profile Personal Message (Offline)

Ignore
1513336225
Reply with quote  #2

1513336225
Report to moderator
aminorex
Legendary
*
Offline Offline

Activity: 1344


Sine secretum non libertas


View Profile
January 29, 2014, 05:09:54 AM
 #2

There would be polonium in your toothpaste.  If you survived all the way to the bathroom, that is.  But hey, I'd vote for it.  (The policy, not the toothpaste.)

Give a man a fish and he eats for a day.  Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
aminorex
Legendary
*
Offline Offline

Activity: 1344


Sine secretum non libertas


View Profile
January 29, 2014, 05:15:28 AM
 #3

Slightly (albiet not very much) more realistically:  Suppose the reverse repo plan fails to draw down liquidity and hyperinflation hits.  How can you burn the fiat?   Talk up bitcoin.  Everyone buys bitcoin, other assets deflate to reasonable levels.  Stablize BTCUSD with market operations once you reach a preferred liquidity level.  In short: Make bitcoin a policy instrument.  It's a superb fiat burner, for you when absolutely, positively must burn fiat.  To do this well you must be able to sell bitcoin in quantity.  To do that, you need to stock up on bitcoin, in advance.  The US needs a strategic bitcoin reserve. 


Give a man a fish and he eats for a day.  Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
jimhsu
Sr. Member
****
Offline Offline

Activity: 308


View Profile
January 29, 2014, 05:22:00 AM
 #4

Slightly (albiet not very much) more realistically:  Suppose the reverse repo plan fails to draw down liquidity and hyperinflation hits.  How can you burn the fiat?   Talk up bitcoin.  Everyone buys bitcoin, other assets deflate to reasonable levels.  Stablize BTCUSD with market operations once you reach a preferred liquidity level.  In short: Make bitcoin a policy instrument.  It's a superb fiat burner, for you when absolutely, positively must burn fiat.  To do this well you must be able to sell bitcoin in quantity.  To do that, you need to stock up on bitcoin, in advance.  The US needs a strategic bitcoin reserve. 



Any bets as to how likely the "FBI coins" will be "won" during the upcoming auction by an "internal bidder?"

"Trust, but verify."
Bitrated user: jimhsu.
keithers
Legendary
*
Offline Offline

Activity: 1358


This is the land of wolves now & you're not a wolf


View Profile
January 29, 2014, 05:23:51 AM
 #5

If i was chairman of the fed, i would be trying to slander bitcoin as much as possible because it poses a threat to the fed's vice grip control over monetary policy. Then on the backend, I would probably be having everyone in my family stock up on as many bitcoins as possible lol
aminorex
Legendary
*
Offline Offline

Activity: 1344


Sine secretum non libertas


View Profile
January 29, 2014, 05:31:21 AM
 #6

If i was chairman of the fed, i would be trying to slander bitcoin as much as possible because it poses a threat to the fed's vice grip control over monetary policy. Then on the backend, I would probably be having everyone in my family stock up on as many bitcoins as possible lol

In other words, just another devotee of Karhu.

Give a man a fish and he eats for a day.  Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
billyjoeallen
Legendary
*
Offline Offline

Activity: 980


Hide your women


View Profile WWW
January 29, 2014, 06:18:28 AM
 #7

If i was chairman of the fed, i would be trying to slander bitcoin as much as possible because it poses a threat to the fed's vice grip control over monetary policy. Then on the backend, I would probably be having everyone in my family stock up on as many bitcoins as possible lol

Well, yeah, but this though experiment is intended to explore what you could do from the position as Fed Chair to fulfill the Fed's dual mandate. Vice grip control is assumed.
Honestly, what other options does the Fed have at this point except try to blow another bubble, one that won't cause excessive inflation? That's kind of like trying to make a baby without causing excessive pregnancy.

insert coin here:
1Ctd7Na8qE7btyueEshAJF5C7ZqFWH11Wc

Open an exchange account at CampBX: options, lowest commissions, and best security
https://campbx.com/register.php?r=0Y7YxohTV0B
billyjoeallen
Legendary
*
Offline Offline

Activity: 980


Hide your women


View Profile WWW
January 29, 2014, 06:20:35 AM
 #8

There would be polonium in your toothpaste.  If you survived all the way to the bathroom, that is.  But hey, I'd vote for it.  (The policy, not the toothpaste.)

The only votes the Fed Chair needs are the Fed Board member's votes. I'm assuming a bunch of yes-men for this hypothetical. That's prolly not much of a stretch.

insert coin here:
1Ctd7Na8qE7btyueEshAJF5C7ZqFWH11Wc

Open an exchange account at CampBX: options, lowest commissions, and best security
https://campbx.com/register.php?r=0Y7YxohTV0B
Xav
Member
**
Offline Offline

Activity: 78


View Profile
January 29, 2014, 11:15:46 AM
 #9

If I were the Fed's Chairman, I would be a lady, a tiny fragile yet very intelligent woman. I would not be afraid of Bitcoin, yet. I would dress up a project in corporation with NSA and FBI, let them inject some virus in the confiscated 170k BTCs and auction them to the greedy population. A year later I would spread the devastating truth and activate the virus. Bye bye Bitcoin. This costs not even one penny. Just a thought-experiment of course.
billyjoeallen
Legendary
*
Offline Offline

Activity: 980


Hide your women


View Profile WWW
January 29, 2014, 11:21:05 AM
 #10

If I were the Fed's Chairman, I would be a lady, a tiny fragile yet very intelligent woman. I would not be afraid of Bitcoin, yet. I would dress up a project in corporation with NSA and FBI, let them inject some virus in the confiscated 170k BTCs and auction them to the greedy population. A year later I would spread the devastating truth and activate the virus. Bye bye Bitcoin. This costs not even one penny. Just a thought-experiment of course.

Someone would have to almost want to be infected. A public or private bitcoin address is not executable code. The metadata could provide a hash for such code, but couldn't execute it without some catalyst. 


insert coin here:
1Ctd7Na8qE7btyueEshAJF5C7ZqFWH11Wc

Open an exchange account at CampBX: options, lowest commissions, and best security
https://campbx.com/register.php?r=0Y7YxohTV0B
johnytelevision
Jr. Member
*
Offline Offline

Activity: 52


View Profile
April 07, 2014, 02:31:53 PM
 #11

I don't think head of fed can just buy anything he wants.

Erdogan
Hero Member
*****
Offline Offline

Activity: 840


View Profile
April 07, 2014, 02:43:30 PM
 #12

Bitcoin is not in the best interest of the bank. They will have to go against it at some point, probably in a covert way (their normal modus). The worst thing they can do to protect themselves, is to do nothing.


keithers
Legendary
*
Offline Offline

Activity: 1358


This is the land of wolves now & you're not a wolf


View Profile
April 07, 2014, 08:43:46 PM
 #13

If i was chairman of the fed, i would be trying to slander bitcoin as much as possible because it poses a threat to the fed's vice grip control over monetary policy. Then on the backend, I would probably be having everyone in my family stock up on as many bitcoins as possible lol

Well, yeah, but this though experiment is intended to explore what you could do from the position as Fed Chair to fulfill the Fed's dual mandate. Vice grip control is assumed.
Honestly, what other options does the Fed have at this point except try to blow another bubble, one that won't cause excessive inflation? That's kind of like trying to make a baby without causing excessive pregnancy.

The Fed loves inflation, otherwise they would stop printing so much more money to finance all these stupid wars..
LostDutchman
Sr. Member
****
Offline Offline

Activity: 476



View Profile WWW
April 07, 2014, 11:19:29 PM
 #14

Sorry to be a grammar Nazi but that should be "If I WERE chairman................".

How I mourn the decline of the subjunctive!

My $.02.

Wink

Corporations For Crypto
Protect Your Assets and Reduce Your Tax Liability With A Kansas Corporation!
We Demand Justice From BFL
waldox
Sr. Member
****
Offline Offline

Activity: 252


View Profile WWW
April 08, 2014, 08:14:20 AM
 #15

if fed buy most of bitcoin... we bitcoiners will probally move to bitcoin 2.0 or fork bitcoin so fed's ownership is void


▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄
   * Dental Hygiene Cleaning in Toronto & Mississauga accepts Bitcoin  * Downtown Toronto Real Estate Realtor Blog & News * Toronto House Evaluation * Toronto Dental Cleaning Hygiene Centre
▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
bitcoinforhelp
Full Member
***
Offline Offline

Activity: 154


View Profile
April 09, 2014, 12:04:23 AM
 #16

you can keep dreamin Smiley, fact is, none of this will happen
fed is corupt, fed is evul
atp1916
Legendary
*
Offline Offline

Activity: 854



View Profile
April 09, 2014, 12:11:08 AM
 #17

you can keep dreamin Smiley, fact is, none of this will happen
fed is corupt, fed is evul

Don't worry, the anarchists / extreme libertarians like yourself will be marginalized to the outside of the Bitcoin camp.

Bitcoin is a reformation of monetary systems, not a social revolution against the government.
LostDutchman
Sr. Member
****
Offline Offline

Activity: 476



View Profile WWW
April 09, 2014, 12:15:26 AM
 #18

you can keep dreamin Smiley, fact is, none of this will happen
fed is corupt, fed is evul

Don't worry, the anarchists / extreme libertarians like yourself will be marginalized to the outside of the Bitcoin camp.

Bitcoin is a reformation of monetary systems, not a social revolution against the government.

Nice thoughts and dream on!

My $.02.

Wink

Corporations For Crypto
Protect Your Assets and Reduce Your Tax Liability With A Kansas Corporation!
We Demand Justice From BFL
Erdogan
Hero Member
*****
Offline Offline

Activity: 840


View Profile
April 09, 2014, 01:00:01 AM
 #19

End the Fed? Don't just talk about it. Do it! With bitcoin.


Bit_Happy
Legendary
*
Offline Offline

Activity: 1652


A Great Time to Start Something!


View Profile
April 09, 2014, 08:41:02 AM
 #20

End the Fed? Don't just talk about it. Do it! With bitcoin.



Ignore the Fed is easier, and a big step in the right direction.

Pages: [1] 2 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!