The Fed has a lot of policy tools, to be sure. But, traditionally — that is, when the Fed was operating in a corridor system — it exerted influence on the FFR primarily through its open-market operations.
Hayek’s commodity reserve standard would automatically serve to stabilize prices and output. In our discussion of rule-based monetary policy and sound money, the mechanics and principles guiding Hayek’s proposal deserve careful consideration.
In August, it will be 10 years since the Federal Reserve balance sheet exploded in size. How does it look now?
The idea that a central bank might be constrained by rules is problematic. It merely moves the central bank's choices to the more abstract level of selecting and interpreting rules.
Discretionary central banking places immense information burdens on central bankers.
Central banking is the institutionalization of irresponsibility in monetary policy.
My theory: the paper is written for bankers and policy makers of an older generation who have heretofore ignored or dismissed crypto-based innovations. They might know something about money and banking. But they know next to nothing about computer science, digital resources, and cryptography. As a result, the paper speaks in the plainest-possible English about these technical topics. It then turns to debunking the most common myths about crypto.