[uLogMicheal]

I appreciate the context and will research the differences you shared; this topic interests me.

> This is goalpost moving.

My comments have been under the context of the post, VC funding. With VCs, you often find companies spring from nowhere with a marketing blitz or infinite runway in an exclusive access phase. This is not accessible to the common person, and in my opinion stems from a modernly masked form of nepotism. This is also not accessible in a world that requires near-term profitability, so maybe more of this will be broken in the years to come by economic realities.

[imtringued]

I am personally of the opinion that the central bank is irrelevant. The only factor relating to central banks that has any relevance is that they issue cash with a price control aka the zero lower bound on interest. This results in the usual problems with minimum price controls. There will be an oversupply of the "product" in question. Because the ZLB applies to the short term interest ratethere will be an oversupply of liquid and immediately accessible deposits or account balances. People will be hesitant to commit their money long term and they instead just wait for the next opportunity. This then leads to a slow down of money circulation, which in turn forces the entire economy to adapt to this artificially created situation. This behaviour creates an opportunity to plug the gap with newly created money by commercial banks by keeping less than 100% of the deposits in reserve. The problem is that the newly created money will end up stuck in the same accounts as before which means that the bandaid solution has to be repeated endlessly. The obvious solution is to eliminate the zero lower bound and let the market determine both positive and negative interest on liquid account balances. Then the central bank won't have to do anything at all except prevent commercial banks from creating too much money by having reserve requirements at 50% or higher. You will get most of the neoclassical predictions like full employment even if the economy is no longer growing or the last world war has been eighty years ago.

But the reverse is also true. If you keep the ZLB enjoy living in an imperfect world that needs constant government intervention to deal with the constant dysfunction that such a price control generates.

[uLogMicheal]

I understood how one-sided discovery is problematic in paper-asset markets. I think this is a big reason we are seeing efforts to shut down decentralized exchange. Decentralized exchange prohibits censored price discovery. Orders must execute in public by nature of the systems. Now from what I understand, if the order is big enough to cause major market impact it goes to dark pools, or other frontrunning/delay measures are executed in private via contractual negotiations. Interesting that this is also similar in borrowing markets, thanks for that context.

[littlestymaar]

> I am personally of the opinion that the central bank is irrelevant

The economic history of the US (which was one of the last industrial power to addopt a central bank) is against you on this one, especially the period between ACW and the creation of the Fed in 1913.

The purpose of central bank isn't to set up price control on money (which it doesn't, btw) it's to make sure that commercial bank don't have liquidity issues.

[littlestymaar]

I'm not defending VCs in any way (and I kind of agree with your sentiment here), it's just that you don't need to have any relationship with the central bank to do that: the central bank sets the interest rate, it affects the entire money market all at once so anyone with access to this market will benefit from cheap credit.