https://m.primal.net/Lebc.png 

This referenced paper from the Minneapolis Federal Reserve, along with the much discussed European Central Bank paper, has received an enormous amount of attention in Bitcoin circles – although I have yet to find any parallel attention being paid to it in tradfi media. That said, this paper was written for a reason, almost certainly a tasking received from Fed seniors to analyze the possible impact of bitcoin on Treasury markets. Anyone who has worked in government knows a lot of think pieces are written only to be shelved. But even those that are shelved represent some lines of thinking that motivated leadership to designate resources to a project. 

I am not an economist, and thus am not in any position to refute the very serious looking formulas the authors use to support their conclusion that a “legal prohibition against bitcoin can restore unique implementation of permanent primary deficits, and so can a tax on bitcoin at the rate -(r - g) > 0.” What I am in a position to quibble with, however, are the normative assumptions that underline their entire thesis.

The foundation of the authors’ very scholarly sounding arguments are two assumptions; that bitcoin is “useless pieces of paper,” and that buyers of our debt, primarily among them foreign governments and financial institutions, won’t come to the same conclusion about this debt. 

As for the “useless pieces of paper,” the phrase belies not only a profound misunderstanding of what bitcoin is and how it works, but also a deep well of contempt for those who see value in it. Regarding foreign buyers, it seems the authors are content to trap US citizens and financial entities in a debt cycle knowing full well that large foreign entities have been reducing their exposure to Treasuries for some years now. They can’t force China to buy our debt, but they certainly compel you to use your retirement savings to do so.

Strip away the fancy econometrics, and what you have is an apologetic piece of which the core intent is not ensuring Americans have the freedom and autonomy to choose their own paths to prosperity, but rather a blueprint for a subset of elites to keep all of us locked in a system that has made them wealthy at the expense of a large swath of our fellow citizens.

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