Summary of US fiscal and G(overnment) monetary policy direction as of 21 Jan 2025 :
1. Keep spending yearly more than what is earned yearly.
2. Issue treasuries, i.e. take out loans.
3.
a. Print money to buy treasuries, i.e. pay back loans. QE.
b. Lower base rate, i.e. make it cheaper to borrow.
... a/b, money supply increases, inflation increases, DXY weakens.
4.
a1. Sell treasuries, i.e. re/issue loans, burn money (sales proceeds). QT.
a2. Retire treasuries, without replacing them, burning money. QT?
b. Raise base rate, i.e. make it more expensive to borrow.
c. ... new thang ... do not outlaw new asset class, cryptocurrencies, essentially legitimising the issuance of NGO-money ; capitalise on USD-safe-haven status as the contemporary backbone of stablecoin pegs ; regulate the G-money-NGO-money exchange by requiring US-based stablecoins to be backed by treasuries, thereby diverting global demand for cryptocurrencies into an analogy of the global demand for US equities and fixed income securities .
... a1/a2/b/c, money supply decreases, inflation decreases, DXY strengthens ...
... but 4c. only works as long as cryptocurrency is not used commonly as legal tender ; so that too must be blocked for this strategy to work. (US equities and fixed income securities are not used as legal tender, which is why the USD-safe-haven status works in favour of the DXY.)
5.
Broadly, capital markets are used to trick the middleclass into parting with their money for assets whose real values are controlled by the upperclass. The upperclass controls/colludes-with the government to debase G-money in tandem with the varying rate of absorption of money from the middle- to the upperclass, such that purchasing power is consolidated in the upperclass.
4c. is just an extension of this 20th century pattern into an asset class unique to the 21st century. Cryptocurrency issuing entities are just new fangled IPOs. Crypto issuance in the US is likely to be regulated in favour of US oligarchs who benefit from those issuances.
The government breaks-even in the long-run via the debased value of past debt, being paid for by future taxes from a broader future monetary base.
The rich get richer, and the poor get poorer. And public policy will make all the difference between ... a future where NGO-money economies have broken free from G-money economies ... or, a future that is hardly different from the past century.
