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OpenMarket: Monetary Policy

  • Bitcoin Reserve Proposed for Australian Central Bank

    August 10, 2017

    The Australian parliament may soon consider adding Bitcoin to the currency reserve holdings of the Reserve Bank of Australia (RBA). Labor senator Sam Dastyari and Liberal senator Jane Hume, acknowledging the increasing importance of cryptocurrencies and blockchain technology, have...
  • 'Bitcoin Sign Guy' Joins CEI

    July 18, 2017

    Having photobombed a Janet Yellen congressional appearance with a “Buy Bitcoin” sign, newly famous “Bitcoin Sign Guy” is taking a stint with us here at the Competitive Enterprise Institute. He’ll be studying, writing on, and advocating for cryptographic monetary alternatives.

  • Arguments Against Cash Economy Bolster Government Power

    June 13, 2017

    If there was ever illustration of the need for a competitive monetary system rather than a centralized and monopolized one, Kenneth Rogoff’s book, The Curse of Cash, is it. Rogoff does not argue for the near-elimination of cash because...
  • Mr. Robot and the Future of Money

    September 23, 2016

    Last week, the cult USA channel TV show Mr. Robot showed once again why it is required viewing for anyone interested in technology. In a conversation between E Corp CEO Phillip Price and a top government official named Jack (a thinly-veiled Jack Lew?), he talked about his plans to get official government backing for his virtual currency, eCoin:

    Jack (James Lloyd Reynolds) : “…it’s unconstitutional, you can’t make your own currency.  That is the Federal Government’s job!  We simply cannot let you make big loans in eCoin that you would not make in dollars.”

    Phillip Price (Michael Cristofer): “Jack look at me.  I am not the problem here.  The problem here is hard cash is fading rapidly. That’s just the way of the world right now.  And Bitcoin is spreading.  And if Bitcoin takes over, we are all in...

  • RealClear Radio Hour: Taxpayers on the Hook

    August 15, 2016

    This week on RealClear Radio Hour, Michael Tanner tallies Uncle Sam’s ballooning entitlement debt and Romina Boccia pulls back the cover on the Beltway crony game.

    My first guest is Michael Tanner, Cato Institute Senior Fellow and author of Going for Broke: Deficits, Debt, and the Entitlement Crisis. Michael contends U.S. national debt is following the same trajectory as did Greece. Beyond the $18 trillion balance sheet debt, he estimates unfunded future liabilities compound the on-the-books debt by another $70 to $140 trillion—with carrying costs poised to skyrocket when interest rates rise. 

    ...
  • House Plan to Replace Dodd-Frank Provides Long-Needed Alternative

    June 10, 2016

    On Wednesday, House Financial Services Committee Chairman Jeb Hensarling announced the main features of his comprehensive plan to replace Dodd-Frank, the flawed response to the financial crisis. Overall, the plan, called the Financial CHOICE Act, contains many features CEI has long advocated, together with some new approaches that look promising. There are one or two concerns from CEI’s free market perspective, but overall the plan provides the comprehensive alternative that provides the basis for debate as the initiative moves forward.

    The plan comprises seven sections that would serve as titles for a bill. It is worth looking at each in turn.

    Section One deals with capital controls on banks, which have tightened as a result of Dodd-Frank...

  • The Improvisational Fed, and Unpredictable Regulations

    February 11, 2016

    Improvisation can be a wonderful thing when performed by talented hands—Charlie Parker, Miles Davis, and the like. The Federal Reserve, especially for the past several weeks, has fancied itself an improvisational talent on that level. But like most humans, Janet Yellen is no Charlie Parker. They should consider a return to the Paul Volcker/early Alan Greenspan adherence to a defined rule. But that isn’t the end of the story—any substantive Fed reforms will fail unless they are coupled with a thorough program of regulatory reform reaching through the entire executive branch. This post will examine a few worthwhile Federal Reserve reforms, then some regulatory reforms, most of which have already passed the House.

    The rest of the executive branch has a similar lesson to learn—more complexity and an ever-increasing stock of rules means less predictability and more uncertainty for...

  • Towards a Humbler Monetary Policy

    December 1, 2014

    Is it possible for opposite policies to both be wrong? Over at the Washington Examiner, I argue that it is. The U.S. is ending its quantitative easing program just as Japan is ramping its up. Those seemingly opposite policy paths are rooted in the same mistaken philosophy. I argue instead for a humbler monetary policy:

    Both Yellen and Kuroda should move their focus away from stimulus, exchange rates and constant tinkering, and toward stability, honesty and predictability in their price systems. Easing of $1.66 trillion has had almost no effect on the U.S. economy. How reality will stack up against the Bank of Japan’s predictions, no one knows.

    Along the way there are discussions of Keynesian liquidity traps, the Taylor rule, NGDP...

  • Nationalizing Bitcoin?

    September 9, 2014

    The phrase “if you can’t beat them, join them” seems so applicable in light of the Commonwealth of Dominica announcing plans to distribute bitcoins to all of its citizens. This is a wonderful attempt to integrate people into a burgeoning market. The timing could not have been better, as Ecuador also announced it will introduce its own cryptocurrency. The key difference between Ecuador and Dominica’s plan is that Ecuador plans to implement its currency through its central bank, whereas Dominica plans to disperse bitcoins directly to its citizens. Perhaps fearing competition, Ecuador is also...

  • Bitcoin’s Undiscovered Potential

    July 28, 2014

    A recent piece in American Banker magazine explores how Bitcoin and other cryptocurrencies can help the underprivileged, particularly the millions of unbanked people who do not have bank accounts. This is an area where digital currency could do much good.

    In fact, the online microfinancing platform Kiva has already begun a peer-to-peer service, known as Kiva Zip, whose model resembles some of the features in Bitcoin. Microfinancing is a form of lending for lower-income people that provides smaller loans than commercial banks are typically able to offer. Kiva Zip’s peer-to-peer structure means that users interact directly with each other, without administrators or other...

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