Why controlling BTC supply is possible

[DeathAndTaxes]

This is 100% impossible on the blockchain. This is why I'm saying as long as the BTC transfers are on the chain you could never loan more than you have.

If all transactions are done in cash then fiat fractional reserve banking is equally impossible.

My argument is that you could never loan more coins than you actually have. This has to be in the context of bitcoins and thus of course on the blockchain.

Then likewise banks can never lend out in cash more than they have in deposits.   You are simply using one context for fiat and another for bitcoin where no such distinction exists.

Fiat FRB
If all transactions involve cash = impossible.
If some transactions involve interbank agreements = possible.

Bitcoin FRB
If all transactions involve cash = impossible.
If some transactions involve interbank agreements = possible.

Saying it is impossible if everything is on the blockchain =/= it is impossible.  Today not all transactions ARE on the blockchain.  If you have a coinbase account and you pay a merchant who has a coinbase account guess what?  The tx is off blockchain.  Now imagine Coinbase and Circle setup a mutual line of credit for 10,000 BTC.  You could pay a Circle merchant from your coinbase account and it still wouldn't be on the blockchain.   Now imagine one of those companies lent out 1 BTC.  Tada that is fractional reserve banking.    

There is no requirement that all transactions be on the blockchain.  Likewise if everyone took their funds out of fiat banks and conducted all transactions in cash (the fiat equivalent of on blockchain transactions) then fiat based FRB would also be impossible.

[lyth0s]

You usually have good responses and I consider you to be a smart guy. But please read my post again. How could anyone, ever loan more coins out (actual bitcoin transfers in the block chain) than they actually have? Irregardless if they are a fractional reserve or not (which would actually just lower their coin amount by even more and make it even more impossible) Think about that for a few minutes and then respond.

Lythos, currently, I think you have no problem into believing that there exist more numerical money in bank account than printed bills.
And also you accept both, bills and wire transfer to get paid.
You know that if everyone ask for bills in the bank, then there will not be enough cash. But you don't care because you can pay goods and services in both, cash and wire, or credit card.

Now, even if the cash supply is not expanded, if someone move the reserve legal, it will provoke more "numerical money" to be spendable, thus making the money supply bigger.

All of this is possible just because you are accepting both debt (your bank statement is debt from the bank), and cash as payment.

Sure, moving the legal reserve does not impact cash supply, but it impact money supply.

This is 100% impossible on the blockchain. This is why I'm saying as long as the BTC transfers are on the chain you could never loan more than you have. Off the blockchain I could do ANYTHING I wanted. I could say deposit 10 BTC with me and you instantly have 100BTC!!! Then setup other "banks" that are completely off record and basically allow myself to ponzi everyone's coins up.

My argument is that you could never loan more coins than you actually have. This has to be in the context of bitcoins and thus of course on the blockchain.

True, not possible on the blockchain... As you can't lend more cash than you own...  
BUT the banking system can lend more money than it own. Why is that ? (As I explained with the iterations)
It can because now, you accept both cash, and the bank's debt as payment.
If tomorrow people start accepting bank's promise to pay them back instead of real BTC, we will get in the same trap.

And it start happening with BitPay.

I'm only speaking in terms of what's on the blockchain, no other intermediates. Intermediates can fool people however they want. Perfect examples are Mt Gox, Inputs.IO and I'm sure dozens of others. With bitcoin there is no need for intermediates to make electronic payments we can just use well developed wallets and thus eliminate the need to be trapped. That is my sole argument. Will people be scammed in the future? Of course. Will I be one of them? Nope.

all transactions are done in cash then fiat fractional reserve banking is equally impossible.

My argument is that you could never loan more coins than you actually have. This has to be in the context of bitcoins and thus of course on the blockchain.

Then likewise banks can never lend out in cash more than they have in deposits.   You are simply using one context for fiat and another for bitcoin where no such distinction exists.

Ok so we agree that on the blockchain you could never loan out more coins than you actually have. That is all I'm talking about. Now my second point would be that I don't believe we will have anywhere near the same need for bitcoin banks as we did/do for fiat. Keeping large amounts of fiat under your matress probably wouldn't end well, which gave us a need for banks. Another need was for electronic payment. With bitcoins we can do individual cold storage + small hot wallets and it's already electronic. Two of the biggest drivers for bank savings. IMO.

On a separate note: As far as Bitpay goes, I don't know too much about them but I was under the impression that bitpay accepts coins, sells them on Bitstamp and then sends USD (yes via electronic bank debt) to the companies that allowed the bitcoin as payment (for instant USD). Are they actually doing something else?

[Nicolas Dorier]

That risk would not and could not be adequately compensated.  No doubt some people will try and eventually the bank will have a run and implode.  People will lose huge sums of wealth in the process.

Well, that's what happened to MtGox, so yes, it will happen again and this is a good lesson.

Most people don't put money in the bank for interest.  Have you seen the interest on checking accounts lately.  People put money in the bank for safety and availability.  You can't pay online or over the phone with cash.  Checks, ACH, wires, debit cards all require a banking account.

This is very true, and this is were Bitcoin shine. But I think that if paypal or bitpay goes big about bitcoin, sellers will start to store their BTC in their account instead of their own wallet.
But for the average consumer, this is true, I don't see any reason now, except a promise from a bank to "give interest".

This means absent the ability for the central bank to print money from nothing the central bank would eventually fail.  

Agree, but to my understanding dollar and gold before 1930, is exactly equivalent to debt BTC with a legal reserve and real BTC .
Before 1930, there was, say, 100 000$ worth of gold circulating, but only 10 000$ of gold were real.

Then, the FED have gone broke, so it declared dollar a fiat to print whatever they want.

Imagine that a central bank tomorrow goes broke, and don't have real BTC left.
Would not they be able to say : "I declare debt BTC to not be backed on real BTC", thus making any payment possible by using these debt BTC instead of real one ?

Such scheme would imply that people accept to be paid in both, real BTC and debt BTC. But this is starting to happen with services like BitPay, or maybe future paypal.

On a separate note: As far as Bitpay goes, I don't know too much about them but I was under the impression that bitpay accepts coins, sells them on Bitstamp and then sends USD (yes via electronic bank debt) to the companies that allowed the bitcoin as payment (for instant USD). Are they actually doing something else?

If they are really doing that, this is great. If they start offering "to keep your bitcoin safe" this will become a problem.
If people starts to fall in the trap again, then the history will repeat. But maybe DeathAndTaxes is right : banks will not proliferate, and I hope it will be true.

[lyth0s]

If you have a coinbase account and you pay a merchant who has a coinbase account guess what?  The tx is off blockchain.  Now imagine Coinbase and Circle setup a mutual line of credit for 10,000 BTC.  You could pay a Circle merchant from your coinbase account and it still wouldn't be on the blockchain.   Now imagine one of those companies lent out 1 BTC.  Tada that is fractional reserve banking.    

I'm sorry DeathandTaxes, you actually brought up a really good point with coinbase and circle. I'm sure a LOT of people are going to use these services for convenience and the prevalence of fractional reserve banking may actually take a good hold in the bitcoin marketplace too. I was really thinking that most of the advantages of an electronic money would make less people rely on bankers. At least if we hold our own BTC we won't have to worry about these companies imploding, but I suppose the increase in effective money would devalue our actual btc holdings...

Thank you for increasing my knowledge base

[DeathAndTaxes]

If you have a coinbase account and you pay a merchant who has a coinbase account guess what?  The tx is off blockchain.  Now imagine Coinbase and Circle setup a mutual line of credit for 10,000 BTC.  You could pay a Circle merchant from your coinbase account and it still wouldn't be on the blockchain.   Now imagine one of those companies lent out 1 BTC.  Tada that is fractional reserve banking.    

I'm sorry DeathandTaxes, you actually brought up a really good point with coinbase and circle. I'm sure a LOT of people are going to use these services for convenience and the prevalence of fractional reserve banking may actually take a good hold in the bitcoin marketplace too. I was really thinking that most of the advantages of an electronic money would make less people rely on bankers. At least if we hold our own BTC we won't have to worry about these companies imploding, but I suppose the increase in effective money would devalue our actual btc holdings...

Woo hoo we understand each other now.  Well I got to balance the bad with the good.  The good news is that in my opinion any such devaluation should be small (at least compared to fiat currencies).  Here is why

PurchasingPower = 1/ EffectiveMoneySupply
EffectiveMoneySupply = MonetaryBase * MoneyMultiplier
MoneyMultiplier = (%FundsOnDeposit / %ReserveRequirement) + %FundsOffDeposit

So looking first at the monetary base.  With Bitcoin it is growing fast (11% monetary inflation)  but eventually will slow down and it is capped at 21M BTC.  So with 12M BTC outstanding we know that even if you live for a hundred years the monetary base can't even double.   That puts a limit on the upper bound of the effective money supply (much like a gold standard did) and unlike a fiat system where independent of the affiliate banks the central bank can expand the monetary base at will.
Lets compare this to the federal reserve. http://research.stlouisfed.org/fred2/series/BASE/

1985:  $182B
2014:  $3,984B

So growth of the monetary base will be slower and capped that already means even if bitcoin banks were equal to fiat banks the money supply would grow much slower.  The money multiplier is harder to quantity.  A lot will depend on how popular bitcoin "banks" are.  What is the demand for bitcoin debt?  How much of a reserve will these banks hold?  Lets look first at the US fiat system.  The reserve requirement is 10% and the % of funds are on deposit is very high probably more than 90%+ .  Cash not on deposit is a small portion of the overall money supply.  So the max money multiplier is ~10x.  In reality bank tend to be more conservative.  Right now the M2 money multiplier currently is ~3x.  The fed no longer tracks the M3 some estimates put it at 50% higher than the M2 making the money multiplier more like 5x.
http://research.stlouisfed.org/fred2/series/M2

Will Bitcoin banks be able to sustain a money multiplier of 5x, I can't see that being plausible.  How much of a multiplier is possible.  My guess would be <2x and probably something like 1.1x or 1.2x.  The first reason is that unlike the fiat world a larger portion of the money will not be involved in a fractional reserve scheme.  "Real BTC" is much easier to use than cash.  It is easier to prove the reserve level of exchanges (should be 100%) and even banks (will need to be much higher due to the increased risk).  When you add factors like no central bank or FDIC, and possibly not much demand for borrowing BTC I can't see a multiplier of more than 1.2x.  That combined with a fixed based means that monetary expansion will be far more constrained if it does happen (which it may not).

[lyth0s]

If you have a coinbase account and you pay a merchant who has a coinbase account guess what?  The tx is off blockchain.  Now imagine Coinbase and Circle setup a mutual line of credit for 10,000 BTC.  You could pay a Circle merchant from your coinbase account and it still wouldn't be on the blockchain.   Now imagine one of those companies lent out 1 BTC.  Tada that is fractional reserve banking.    

I'm sorry DeathandTaxes, you actually brought up a really good point with coinbase and circle. I'm sure a LOT of people are going to use these services for convenience and the prevalence of fractional reserve banking may actually take a good hold in the bitcoin marketplace too. I was really thinking that most of the advantages of an electronic money would make less people rely on bankers. At least if we hold our own BTC we won't have to worry about these companies imploding, but I suppose the increase in effective money would devalue our actual btc holdings...

Woo hoo we understand each other now.

The good news is any such devaulation should be minimal (at least compared to fiat currencies).  Here is why

PurchasingPower = 1/ EffectiveMoneySupply

EffectiveMoneySupply = MonetaryBase * MoneyMultiplier

MoneyMultiplier = (%FundsOnDeposit / %ReserveRequirement) + %FundsOffDeposit

So looking first at the monetary base.  With Bitcoin it is growing fast but eventually will slow down and it is capped at 21M BTC.  So with 12M BTC outstanding we know it can't even double.   That puts a limit on the upper bound of the effective money supply.
Lets compare this to the federal reserve. http://research.stlouisfed.org/fred2/series/BASE/

1985:  $182B
2014:  $3,984B

So the federal reserve alone has expanded just the monetary base by >2000% in just 30 years.

The second component is harder to quantity.  A lot will depend on how popular bitcoin "banks" are.  What is the demand for bitcoin debt?  How much of a reserve will these banks hold.   In the fiat world the reserve is 10% and roughly 100% of funds are on deposit.  Cash not on deposit is a small portion.  So the max money multiplier is 10x.  In reality bank tend to be more conservative the money multiplier currently is ~3x.  You can see this in the M2 (relative to the monetary base)
http://research.stlouisfed.org/fred2/series/M2

The fed no longer tracks the M3 some estimates put it at 50% higher than the M2 making the money multiplier more like 5x.

I believe that Bitcoin banks will never be able to sustain a money multiplier of 5x.  First not everyone will have their funds on deposit "personal wallet = fiat cash" and a greater portion of the supply will be held outside fractional reserves.  Things like demanding provable reserves for exchanges (who shouldn't be banking) will verify there is no multiplier on those funds.   How much of the money supply will eventually be fractional deposits?  I have no idea but if I had to guess I would say probably less than 20%.  Bitcoin "banks" aren't going to be able to support a 10% reserve.  With no FDIC and central bank, bank runs will be a real threat.  Remember a bank run can kill an otherwise healthy bank.  Even rumor could be enough to start a bank run.  The only protection banks have in the absence of FDIC and a lender of last resort is to be both conservative and transparent (provable reserves can be used to verify the reserve %).  How low of a reserve is possible?  No idea but lets say no less than 50%.  So the multiplier would be something like (0.2/0.5) + 0.8 = 1.2X.  That would mean the sustainable monetary expansion would be no more than 20% more than the monetary base (13M or 21M BTC).  Honestly I would hope even that won't happen but it is possible.  Remember without a central bank to print infinite money to back up failed banks it is possible the money multiplier could spike but if not sustainable then as the banks implode it would crash back towards zero.   Those holding "real BTC" would see their purchashing power rise as the banks failed and the money multiplier collapsed.

Yeah, thank you for taking all that time and logical arguments to explain that to me. Do you have a good resource or starting point into better understanding fractional reserves, effective money supply, multipliers and metrics such as the M1 vs M2 vs M3? I can read the standard definitions of the M metrics, but it doesn't help that much with understanding the concepts behind them.

Edit: NVM going to grab myself an economics textbook

[Nicolas Dorier]

Glad to see such precise argument, when I posted this in french on the french forum, I almost got burned on the bush as an heretic saying that the money could be expanded, without any claim telling why it should be different this time.

[twiifm]

Deathandtaxes did such a great job of explaining banking.

Just wanna add something to the topic.  Even if BTC replace fiat USD, there will always be need for FRB banking services.  The simple reason is most credit is for business rather than individuals.

Suppose you invented a widget.  You save up a bunch of money by working and create a prototype.  Then you get orders in the form of invoices.  How are you gonna buy the supplies & and pay the labor to produce that order?

People will always need credit.  Money has always existed as credit whenever there was an economy.   Gold came after credit money.  Then later gold proved to to inelastic when economies expanded quickly and demand for money outpaced supply

[Nicolas Dorier]

Deathandtaxes did such a great job of explaining banking.

Just wanna add something to the topic.  Even if BTC replace fiat USD, there will always be need for FRB banking services.  The simple reason is most credit is for business rather than individuals.

Suppose you invented a widget.  You save up a bunch of money by working and create a prototype.  Then you get orders in the form of invoices.  How are you gonna buy the supplies & and pay the labor to produce that order?

People will always need credit.  Money has always existed as credit whenever there was an economy.   Gold came after credit money.  Then later gold proved to to inelastic when economies expanded quickly and demand for money outpaced supply

The problem is that labor, supplies and pay will never accept a debt BTC and if they do, we come back to the same cycle that sparked our today's situation that BTC wants to avoid.
If there is credit between suppliers/business or  employee/employers it will be because employee or suplliers believe in the project. And will be compensated for the risk they take, nothing like what we have today.

In other terms, employee or supplliers might get paid in colored coins instead of BTC, which would be a very interesting application of it.

[twiifm]

Deathandtaxes did such a great job of explaining banking.

Just wanna add something to the topic.  Even if BTC replace fiat USD, there will always be need for FRB banking services.  The simple reason is most credit is for business rather than individuals.

Suppose you invented a widget.  You save up a bunch of money by working and create a prototype.  Then you get orders in the form of invoices.  How are you gonna buy the supplies & and pay the labor to produce that order?

People will always need credit.  Money has always existed as credit whenever there was an economy.   Gold came after credit money.  Then later gold proved to to inelastic when economies expanded quickly and demand for money outpaced supply

The problem is that labor, supplies and pay will never accept a debt BTC and if they do, we come back to the same cycle that sparked our today's situation that BTC wants to avoid.
If there is credit between suppliers/business or  employee/employers it will be because employee or suplliers believe in the project. And will be compensated for the risk they take, nothing like what we have today.

In other terms, employee or supplliers might get paid in colored coins instead of BTC, which would be a very interesting application of it.

You are right.  Credit is a type of risk.  So before banks give credit, the borrower has to show that they are credit worthy.  You can put up collateral have co-signer, credit history/ rating, etc...

I see the problem in this forum is that most people think of money in terms of commodity but in practical applications money is more like stock & flow. 

Economies can be broken down to goods - services - finance.  Then you have govt as a regulator.  Its impossible to remove finance & banking from the economy.  So you are correct we always end up at the same place.  But theres nothing inherently "bad" about this.

You could create a banking system w colored coins representing convertible notes based on a BTC reserve.  But in order to get to this point you have to convince people BTC is at the top hierarchy of money.  In the past gold was at the top.  The reasons are historical.  But in modern economies it doesn't work like that anymore.  In MMT the explanation for why fiat has value is because the govt demands taxes in form of legal tender.  Fiat can collapse if the issuing state collapse.  But as long as the state doesn't collapse then fiat is what everyone will use

BTC derives value from speculation so if the speculation collapse the BTC will collapse.  This is one reason why in its current state BTC is not useful as money.   

[DeathAndTaxes]

Borrowing, lending, and credit doesn't require fractional reserve banking.  Now if you are a banker there is nothing better than lending someone elses money and keeping all (or almost all) the profits but it isn't a requirement.

If I have 1 BTC and I lend it to you that was done without fractional reserve banking.  If someday Bitpay floats a 20,000 BTC, 10 year bond @ 3.5% interest that would be another form of lending that doesn't involve fractional reserve banking.

[twiifm]

Borrowing, lending, and credit doesn't require fractional reserve banking.  Now if you are a banker there is nothing better than lending someone elses money and keeping all (or almost all) the profits but it isn't a requirement.

If I have 1 BTC and I lend it to you that was done without fractional reserve banking.  If someday Bitpay floats a 20,000 BTC, 10 year bond @ 3.5% interest that would be another form of lending that doesn't involve fractional reserve banking.

Lending doesn't require FRB but FRB frees up liquidity constraints.  Modern banks create the loans first then they find the reserves afterwards to close out their balance sheets end of day.  They either get the reserves from intrabank lending or if no other banks lend to them to go to the Central Bank.

I agree w you there are a lot of examples of non-commercial bank lending.  And there is a lot of "shadow" banking outside the Federal Reserve System. 

But I seriously doubt modern economies can run without FRB.  The liquidity constraints would drive interest sky high

[Yakamoto]

You can't technically control a crypto-currency via fractional reserve lending.

Unless you control all the wallets, it's impossible.

They only way you can do something like that is if people use the wallet on "your" exchange, and trade only with each other. Sure, you can modify the numbers.

Anywhere else, however, and you have to send the actual Bitcoins. It can't be a make-believe number from another source.

That is why fractional reserve lending is impossible with a decently-designed crypto currency.

It all comes down to the numbers. If you use online wallets, you get promises of bitcoins. Use your own wallet, however, and suddenly those are YOUR bitcoins, no questions asked.

[DeathAndTaxes]

Control is probably the wrong word, influence is a better choice.  Still the purchasing power of a unit of currency is based on the effective money supply.  If FRB raises the effective money supply by 20% then the purchasing power of each currency unit is likewise reduced.  It doesn't matter if you hold "real BTC" or "fake BTC" the purchasing power is devalued.  This is no different than the fact that you can not use a bank and do all your transactions in cash (dollars) but it doesn't change the fact that inflation will affect prices.  It isn't like merchants value "cash" dollars more than "bank" dollars.

If you use online wallets, you get promises of bitcoins. Use your own wallet, however, and suddenly those are YOUR bitcoins, no questions asked.

This is true but it deals with counterparty risk. There is no counterparty risk if you hold the private key.  This is something I always recommend and the more people that hold their own private keys the less of an effect a FRB system would have on the money supply.  However we are all in this together.  If some users allow their coins (either for the promise of interest or through apathy/ignorance) to be used in a fractional reserve then it affects everyone.

[Nicolas Dorier]

If you use online wallets, you get promises of bitcoins. Use your own wallet, however, and suddenly those are YOUR bitcoins, no questions asked.

This is true but it deals with counterparty risk. There is no counterparty risk if you hold the private key.  This is something I always recommend and the more people that hold their own private keys the less of an effect a FRB system would have on the money supply.  However we are all in this together.  If some users allow their coins (either for the promise of interest or through apathy/ignorance) to be used in a fractional reserve then it affects everyone.

I don't know enough on existing online wallet, but I guess some (will?) implement 1-2 wallet which would limit the effet a FRB system would have, while allowing users to not take too much responsability on their key.
Does such wallet exist ? I speak to people I know about bitcoin, and how great it is, but sincerely, when they ask me if they should buy, I respond no for 3 reasons.
1. They would not be responsible enough for their key, and will loose them, (In this age of technology most people are always computer illiterate)
2. I don't want to take the risk of keeping their key for them,
3. I don't want they turn their money to an online wallet, because if they do that in masses, I would be worried about the flood of fake BTC appearing after some years.

[DeathAndTaxes]

Bitcoin makes provable reserves possible.  I don't know of any online wallets that use reserve proofs but it can be done.   Some exchanges use this (became a selling point after it turned out MtGox didn't have a full reserve and probably hadn't for years).  There is no reason online wallets can't as well.   Of course provable reserves require users (at least some) to verify the proof is correct (by locating their balance in the reserve tree).  If users don't then it is possible for online wallets (and exchanges) to still cheat.  There are no material difference between an online wallet (that uses a shared wallet) and an exchange when it comes to proving reserves, but I guess users of online wallets have so far not demanded them.  Services like blockchain.info are more like a desktop client in the sense that keys are not shared with the wallet service and users have unique sets of keys.  FRB wouldn't be possible on a wallet like blockchain.info without fraud and that fraud would be very easy to detect.

Another option is multisig where the eWallet has one key and the user has a second key (on say a smartphone) spending coins requires using both keys.  This is more secure than provable reserves as it doesn't require validation and it has the added benefit that the exchange can't get "hacked" or hacked and disappear with all the funds.   However this does mean that all transactions are on blockchain so any benefits of off blockchain transactions are lost (reduced/no fees, instant confirmations, reduced blockchain volume, etc).

[Nicolas Dorier]

Another option is multisig where the eWallet has one key and the user has a second key (on say a smartphone) spending coins requires using both keys.  This is more secure than provable reserves as it doesn't require validation and it has the added benefit that the exchange can't get "hacked" or hacked and disappear with all the funds.   However this does mean that all transactions are on blockchain so any benefits of off blockchain transactions are lost (reduced/no fees, instant confirmations, reduced blockchain volume, etc).

That was what I meant by 1-2 wallet (1 of 2), except that both should be able to spend, so the user can loose its key without loosing money.
Yes, the wallet can be hacked, but the reserve is provable.

Actually, instant confirmation is possible with a 2-2 wallet as you describe. If the two parties trust the eWallet provider to not double spend, then they don't have to wait for confirmation in the blockchain, a simple signed transaction is enough.

For reduced blockchain volume, Blockchain would need to scale one day or another, so I don't think this is a concern. Yes by bypassing the blockchain, it will be slimer... but this just give time to a problem surfacing later without any doubt.

[DeathAndTaxes]

Well I didn't mean blockchain volume is a "problem" but at some point in the future tx will either be off blockchain or the tx volume demand will be so high that either tx fees are incredibly high (bitcoin becomes more of a high value fund transfer network like interbank wire transfers) and/or the requirements to run a node become so high that the network is run by a handful of nodes.

For example 7 billion people aren't going to be able to pay for their morning coffee with bitcoins, at least not as on blockchain transactions.

[Nicolas Dorier]

Well I didn't mean blockchain volume is a "problem" but at some point in the future tx will either be off blockchain or the tx volume demand will be so high that either tx fees are incredibly high (bitcoin becomes more of a high value fund transfer network like interbank wire transfers) and/or the requirements to run a node become so high that the network is run by a handful of nodes.

For example 7 billion people aren't going to be able to pay for their morning coffee with bitcoins, at least not as on blockchain transactions.

Oh god, if one day bitcoin encounter the problem of too much people buying coffee through the blockchain, then the blockchain scalability would not be my problem anymore... the amount of lemon in my mojito would be. 

But without blockchain we would come back really quick to an "influencable" money supply right ?