On the same day I published a piece calling out government officials touting the decline of cash as a reason to launch a CBDC, De Nederlandsche Bank published a speech… touting the decline of cash as a reason to launch a CBDC.

Let's walk through the argument. 🧵

Great FTA.
The threshold question is whether to seize the corpus of blocked 🇷🇺 assets. Europe not there.
Were the threshold crossed, officials can quickly devise a good plan.
This is far more a matter of political will than law.
Seize the assets.👇

omfif.org/2024/03/its-ti…

😳

The best revenge is a beautiful life

Thread: I fear I might spend the entire rest of my life just refuting Gary Gorton's distortions of financial history. His latest paper, with Jeffrey Zhang, is on a par with his other, recent productions in that field. papers.ssrn.com/sol3/papers.cf…

That outcome is possible in a fiscal dominance regime, but does not seem to be the case now. U.S. inflation peaked in mid-2022 just when federal interest payments as a % of GDP was starting to rise. Going forward, however, it could happen given the ongoing deficits & high rates.

The current federal interest outlay is ~$1T per year, straight into financial portfolios. If you think that outlay is inflationary, imagine how inflationary it was last year when the U.S. stock market rose 30% from trough to peak. 30% is worth $12T to those SAME financial…

In a maximally productive economy, literally everyone would be an economist. No need for e.g. the arts—instead we can simply admire the beauty of the Cobb-Douglas production function.

Superb paper by Josh Hendrickson on the history of our current global monetary order, the Treasury Standard

He argues, contra the orthodoxy, that the 'Treasury Standard is the direct result of U.S. policymakers’ desire for the U.S. to maintain global hegemonic power, especially in…

Leila Bengali decomposes inflation into interest-rate responsive and unresponsive categories. (whether each inflation category has historically declined after a surprise interest rate hike)

Current excess inflation is entirely due to the unresponsive categories.

Jamie Dimon: “Regulations should recognize the value and importance of . . . using central bank resources, such as the discount window. Adhering to current liquidity requirements permanently ties up good liquidity in a way that makes the system more fragile and more risky.”

The US native-born, working age population has been shrinking since 2015 and will continue. Folks that complain about 'all net job growth going to immigrants' will be able to continue their faux outrage but miss the point: it's all driven by demographics and we need immigrants