A lot of smart people who have studied the money system (fiat currency, fractional reserve banking, leverage, derivatives, boom and bust cycles, inflation, etc) think a mathematically based decentralized currency such as Bitcoin could be an alternative money system, free from central control by central planners.
A lot of smart people think cryptocurrency including Bitcoin is primarily for speculators and invites criminal activity.
There are strong opinions and some good points on all sides.
The last few days stresses on regional banks — some of which have serious liquidity problems due to using their massive deposits to purchase low-yield treasuries which are now underwater — due to recent interest rate hikes — are seriously testing our financial system and post-financial crisis (2008-9) response mechanisms.
People are voting with their feet and hoping for the best.
It’s hard to know what to do at times like this.
During the Great Depression there was one regional banker who used psychology and communication strategies and brilliant negotiating to avoid every run on his banks. He didn’t lose a single dollar of any depositors money at a time when thousands of banks were failing nationwide. (And remember, there was no FDIC back then).
His successes and his advocacy for more sound banking got the attention of Pres. Roosevelt. Within a few years was appointed chairman of the Federal Reserve, a role he held for 14 years.
His name? Marriner Eccles.
His memoir “Beckoning Frontiers” captures his story and should be a must-read for all bankers and banking regulators.
During the 2008-2009 financial crisis I sought permission from the Eccles family to make an electronic copy of his memoirs and send it to every member of Congress and the nation’s banking regulators. The request was turned down.
I did buy two expensive used copies and gave one to a friend of mine who worked at the Fed. He found it really interesting.
Now I’m wondering if the book is on Internet Archive.
