Can the Central Bank’s Hand be Moved by Bitcoin?
Forward guidance is a key tool used by central banks in conveying publicly and clearly the state of play when maintaining financial stability and confidence, preventing surprises or disruption which might cause unexpected asset price fluctuation.
To the modern view, markets react to words and the central banks’ credibility, along with transparency, becomes bound in the language they use — which can’t be rooted in a pre-defined system, independent of changing dynamics, or outside of common comprehension.
Relevant when considering how a central bank may react to expectation-building or creatcontextual assuage of Bitcoin.
Clarity in a Game
The agency of central banks comes from them being principals to economic policy of a state or monetary union. In respect of forward guidance, central banks are already being moved by Bitcoin:
To them, Bitcoin isn’t a macroeconomic variable currently considered a threat to financial stability: more an microeconomic factor where retail investors should be aware of the speculative risks.
A Picture of Reality
The language game played by central banks is emphasised in mediated trust, where formally trained lawyers such as Powell and Lagarde are just as prominent as specialist economists: the comparative volatility in Bitcoin is something they don’t like because they’re unable to condition it:
If non-cooperative games exist because of communication problems between rational actors, Satoshi removing the mediation postulate sets Bitcoin apart from the diachronic of central bank orchestrated money:
The stabilising of this relationship between the central bank trusted money and the principal-free comparatively trustless money, can bound in the evolution of what exists, so long the general price level remains unaffected:
Games use mediums tending toward ideals, which Wittgenstein regarded a mirror of nature, as a synthesis for language where meaningful statements are pictured in the real world:
And where it is pointed [that] Wittgenstein’s ideas about language have a connection to the emoji, which have taken on meaning with the growth of digital communication, less is lost to translation:
The game finds its legs:
The central bank’s hands work to an increasingly mature strategy and the establishing of multilateral consensus and probable atrophying of the Bitcoin in the process — Satoshi moved on to other things some time ago now😘.
