Topic: Keynes and the IMF both support Bitcoin (Read 2753 times)

Very very much agree with you !

One shouldn't forget that central banks have been invented to be able to cheat: to pretend to have banknotes standing for gold, without having to exchange them for actual gold, so that you can print a high multiple of the actual gold you possess.

The central tenet of central banks is seigniorage !

Good Lord!

With gold backed money from trusted central banks, we don't need a world central bank. We can not trust a central bank, thus we can not trust a world central bank.

Since the point of central banks is to steal from the public, they will not give their control to the world central bank. Unless we have a world government. But that would drain the wealth from the people quicker than any failed national government, so it is not sustainable.

Getting rid of the need to convert between local fiats would be nice. For that we need world money not controlled by any bank. Wonder if something like that could be constructed...

For a supranational currency to exist, it has to created exogenously from any state. This is because the world of international relations is one of realism--one states loss is another states gain. This is part of the reason why the Bancor was rejected by the US at Brentton Woods in the first place, as it would lose the upper-hand in the world that it had just received bombing most of the world into oblivion.

From the International Clearing Union, May 1943.



I rather suspect that Keynes would have seen the same weaknesses in Bitcoin that he saw in gold (hoarding, lack of international oversight), weaknesses which he addressed here with the proposal of Bancor.

Bancor is reserve currency for central banks to use, not consumers.  Its value is pegged to SDR.  Bitcoin is none of this

That describes shadow banking pretty well.

There is definitely a need for a borderless international currency. Any country whose currency is used as the reserve currency has undue influence in the world. No single country should have that much power or that much responsibility.

Hahaha.  Bitcoin is nothing like bancor or SDR

The title may be a bit link-baity, I'll admit But the underlying conceit isn't a stretch at all.

Whether BTC would ever be accepted by the IMF / international community as a modern-day bancor - well, that's impossible to say - but saying that it fits the criteria for the bancor is simple observation.

Yeah, you're REALLY stretching here

...they just gave it a funny name, the bancor

From http://en.wikipedia.org/wiki/Triffin_dilemma:

"The Triffin dilemma or paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives when a national currency also serves as a world reserve currency. The dilemma of choosing between these objectives was first identified in the 1960s by Belgian-American economist Robert Triffin. He pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, and thus cause a trade deficit.

The use of a national currency, e.g., the U.S. dollar, as global reserve currency leads to tension between its national and global monetary policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account: some goals require an overall flow of dollars out of the United States, while others require an overall flow of dollars into the United States.

Specifically, the Triffin dilemma is usually cited to articulate the problems with the role of the U.S. dollar as the reserve currency under the Bretton Woods system."


Keynes argued that a national currency could not function as the world reserve currency for exactly this reason and proposed the bancor, a supranational currency, to solve this problem. Unfortunately the idea died with Bretton Woods, but in 2010 the IMF revived it:


"On April 13, 2010, the Strategy, Policy and Review Department of the IMF published a comprehensive report[6] examining these aforementioned problems as well as other world reserve currency considerations, recommending that the world adopt a global currency (bancor) and that a global central bank be established to administer such a currency. In this report, the current issues with having a national global reserve currency are addressed. The merits, difficulties and effectiveness of establishing a multi-currency reserve system are weighed against that of the SDRs, or "basket currency" strategy, and those of establishing this new "global reserve currency". A new multilateral framework and 'multi-polar system' for managing capital flows and national debts is also called for, but the IMF cautions that it prefers a gradual shift to this new framework, rather than a sudden change."

Moral of the story: next time someone tells you Bitcoin is a libertarian fantasy, point out that Keynes and the IMF would love it if the world ditched the USD for BTC.