“You can't issue yield in bitcoin and issuing yield in fiat is just more of the same shit.”

Correct, we know banks can’t issue yield in BTC because of the fixed 21M, but they can’t issue it in fiat either. 

Think about it - banks would print fiat which would be dilutive of the numerator against the fixed supply denominator meaning the real yield would actually be negative against the price appreciation of the underlying Bitcoin.. No-one is going to risk that, they’ll just sell what BTC they need rather than take on counterparty risk for fiat liquidity.

This is why they cant back the dollar/peg with Bitcoin either. I mean they can and probably will try, but it will constantly break because fiat must be inflationary for the system to work. 

And a system where the peg breaks frequently is revealed as pointless pretty quickly, people will just flood into BTC which.. further destroys the peg..

Absolute scarcity is a bitch. Humanity has never experienced it before and nothing in the fiat system is ready for it. 

 Well said! I still marvel at it every time I think about it.  That peg sounds exactly like "stable" coins now so makes sense.