Hoppe on the "great" Milei hanshoppe.com/2025/06/a-grea…

lets say you have a bus line that issues tokens, people buy tokens, you take that money to pay the drivers, and the drivers collect tokens. effectively you paying the drivers means they owe you tokens, they have a debt in tokens. you can see how crazy you would seem to be as someone who is not a bus driver to try and return the token to the bus line who can create their own tokens, and oblivious to the purpose of the relationship between the bus driver and the token issuing bus line is to give the tokens value. and what could happen if you shutdown the bus line? the drivers no longer obligated to collect tokens would then start using real money as payment, and the tokens would lose value. with banking, the larger scheme is when the central bank prints money that is "real money", when that "real money" is put into the a local bank they now can now issue out their tokens, banking liabilities, credit, etc. when the central bank lends out money to buy treasuries, this is like paying the bus drivers up front who then have to collect the tokens, the banking liabilities. without the central bank and government demand for money, it may not cause hyperinflation but maybe it would cause banking collapse. there could be a disconnect between banking liabilities and real dollars, as the saying goes "a bird in hand is worth more than two in a bush" and having money in a fractional reserve bank is like having birds in a bush. frb is just ftx at scale.

maybe a shortcut way of thinking about this, the purpose of a cartel is to maintain prices. in the case of an oil cartel is to make sure members do not defect by lowering their prices. a union is also a cartel and another example. the purpose of the central bank isn't simply to lend and collect debts, it's to maintain the value of the dollar, which it can do through interest rate controls and controlling demand through indebting governments. but my original point is that you can have debts for a purpose outside of profits. like a father lending money to his son in order to teach him responsibility and to grow. if the mother offered to pay off the son's debt, she would be doing the complete opposite of what he intended. the central bank is trying to grow the economy because that increases the value of the dollar.