KITE OR BOARD

Summary from the TLDR Crypto newsletter

This essay discusses the concept of fiscal dominance, where the central bank is forced to prioritize government debt funding over maintaining low inflation. It references a paper by Dr. Charles Calomiris, which suggests that the Federal Reserve and US Treasury may resort to such a strategy to address the high levels of government debt and deficits. The essay argues that this could lead to the Fed reducing interest rates, increasing bank reserve requirements, and pushing capital out of the banking system and into alternative assets like crypto.