So, in Rogoff's mind, in
order for central bankers to have the option to set significantly negative rates, we have to get rid of cash — or at least big bills above, say, $ 10 or 10 euros.
One particular point I want to highlight is the
need for central bankers to be aware of the risks that their banks and corporations are taking in regard to foreign currency exposures, as these can be a major source of financial vulnerability for a country.
Being disconnected from reality, these «products» have been more easily subjected to price manipulation than the underlying assets, and therefore have served as effective policy
levers for central bankers to distort reality to achieve their objectives.
What is needed is a
willingness for central bankers to stand in the way of investment / lending booms, and raise rates to deflate investment / lending bubbles before they deflate themselves, with large consequences to the economy.
In a rare move for the Bank of International Settlements — the central
bank for central bankers — BIS openly stated during a high - profile meeting at Jackson Hole that yes, central bankers can indeed see burstings coming, which was apparently a diplomatic way of saying that Greenspan should have.
But while this all may seem like an unlikely
turn for a central banker, Kalukhov argued that utilizing the more experimental capabilities of blockchains is perhaps best viewed as a matter business.