Tyler Cowen: belief

Transcript context

…This is a great question. I do worry that, because the stablecoins are going to require the backing of these Treasury bills, that effectively you’re taking that out of the market, which means less credit to the system ultimately, but the alternative also feels risky. I don’t know. It seems like two choices. It’s not a Hobson’s choice. It’s just a difficult choice. I imagine over time that we will loosen those standards. That’s what I imagine. I imagine this is the first baby step so that people can say these stablecoins are safe, and then over time, we will maybe shift gears slightly. What do you think? I think I agree with that, and it will be necessary. Even with high debt and deficits, there’s only so many T-bills to go around, and we want to use them for everything So, does the rest of the world. You don’t want to get into T-bills paying a rate of zero. The real economy is intrinsically risky for obvious reasons, and financial engineering can only make it so much safer. That’s the ultimate dilemma. It seems to me New Deal banking regulation is finally truly obsolete, and we just don’t know what to replace it with. Okay, I got one for you. Talking about the GENIUS Act, what do you think of the idea that we’re going to have private credit and venture capital and private equity funds effectively in either retirement accounts or available to retail investors without the commensurate or similar disclosures that we’ve typically had for publicly traded companies, so these are going to be funds that are going to have private assets in them. They’ll have a NAV, a valuation ostensibly — at least in my mind, unfortunately — being measured by the manager of these funds, so I would like to see more disclosure personally and auditing and the like. But there are also going to be these interesting semi-liquid funds, which is to say, it’s going to look like a stock. You could buy it on any day, but it’s not clear you could sell it on any day.…

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