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I'm Not a Secret Baby, I'm a Secret, Baby
FOMC FOMO, digital assets with tab-like characteristics, and "less" is not "none."
Devin Gordon has a long profile of Claire “Grimes” Boucher in Vanity Fair, and there’s so much going on that I’m at a loss how to even summarize it so I will just list what I can remember without reading the whole thing again:
1. Grimes heavily implies that it would be very easy to kidnap the richest man in the world, who happens to have access to a huge stash of cryptocurrency.
2. She wants to reclaim the title “manic pixie dream girl” for her people.
3. Oh right also she and Elon Musk, via a surrogate, had a SECRET BABY this past December—a fact revealed to Gordon in the most slapstick possible way, which leads to this genuinely historic paragraph:
I suggest we pause for a moment to discuss the surreal professional ethics at play, which are that I can’t pretend I don’t know she’s got a secret baby with the world’s wealthiest man hiding upstairs. Especially when she invited me here. It’s a calming period that breaks with a sitcom punch line: full-blown infant screams upstairs, followed by the voice of a woman pleading SHH. Now we both start laughing.
Before you read the whole profile (and you should) go ahead and tickle your ganglia with…
What is Elon and Grimes’s secret baby’s real name?
Only one of these options, at most, is true. Click on your best guess:
Did you win? No, no one wins here. Somehow there’s not just one secret celebrity baby today, but two. BuzzFeed’s Emily Mae Czachor reports that “Michael Cera Confirmed He Welcomed His First Child Six Months Ago After Amy Schumer Accidentally Broke The News.” My head is still spinning from the Grimes profile so let’s just assume that Michael Cera had a secret baby with Amy Schumer, and move on. Meanwhile Jeff Bezos’s attention is fixed firmly on his crotch.
Joe Biden issued an executive order directing the government to look into all this crypto business and find out exactly what its, you know, whole thing is. The most interesting part of the order was a directive to investigate “the research and development of a ‘U.S. Central Bank Digital Currency,’” as Jason Abbruzzese and Kevin Collier reported for NBC.
One of the core beliefs of crypto bros is that the way we create money in the normal economy is deeply deranged, and unfortunately they are right, which is awkward for those of us who don’t agree with their assessment of what we should do about it. Look, let me quickly explain how the Federal Reserve creates new money:
First, the Federal Open Market Committee (FOMC) meets and guesses how much money there is already. I should take one step back and say that no one actually knows what money is. Or, to put it another way: no one knows… what is money. There are different “Ms,” like M0, M1, M2, etc. Sometimes money is paper and coins (M0), but sometimes it’s more just a vibe (M3 🌴✌️).
So next the FOMC opens the discount window and places a fresh pie on it to cool. This pie is called “Treasuries.” Then commercial banks like Chase or Bank of America smell the delicious pie and come wafting along on the scent waves to gobble it all up, and fly back to their nests (the banks are mommy birds, here) and vomit up the pre-digested pie into the hungry beaks of their little borrowers. The birds are a metaphor, but also the birds are very real. If just one metaphorical bird dies, our economy disappears.
So, the birds (commercial banks) are allowed to vomit one hundred times as much pie as they actually consumed. This is called “fractional reserve banking.” Then the borrowers take this pie (pie is a kind of money classified as “M4” or “short-term rate-limited repo chunks”) and use it for economically productive activity, like importing “smart TVs, laptops, drones, hairdryers, top of the range headphones, computer drives, books galore, thousands of sealed face masks” and dumping them all directly into a crusher. Then next quarter the cycle starts again.
Of course it’s actually a lot more complicated than that, which is why some people think the Federal Reserve should just create a digital currency and let people open accounts and transact with it directly. In fact the Fed has already written a white paper on this idea, and it’s shockingly readable. For example here’s one of the clearest definitions of cryptocurrency I’ve ever seen:
Technological innovation has recently ushered in a wave of digital assets with money-like characteristics. These "cryptocurrencies" arose from a combination of cryptographic and distributed-ledger technologies, which together provide a foundation for decentralized, peer-to-peer payments.
It’s longer than “a decentralized system of expensive numbers that uses more energy than Finland and has mainly proven useful for doing crimes,” but slightly more complete. The white paper speculates that:
A [Central Bank Digital Currency] could potentially… provide households and businesses a convenient, electronic form of central bank money, with the safety and liquidity that would entail; …A CBDC could also pose certain risks… including how it might affect… the safety and stability of the financial system.
So: pros and cons! Somehow Matt Levine hasn’t written about this yet. I hope he’s appropriately ashamed to have left it to me. This is what you get, Matt. This is what we all get.
Rich Fellers in trouble, in the world of competitive horsies. Max Read on how to update your stale journalism #brand. Our Regrettable Platform launched an app which I guess is also an RSS reader. If you use it, please leave email delivery on for Tabs, ok? Casey had the correct take about it in Platformer (subscriber-only post, sorry Dave). Apple introduced the Mac mini maxi and USB-A ports are back. George R.R. Martin is the most relatable multi-millionaire fantasy author:
I made a lot of progress on [WINDS OF WINTER] in 2020, and less in 2021… but “less” is not “none.”
Today’s Song: Duckwrth, “Power Power”
~ TRANSMISSION GAGOSIAN GENOCIDE - Issey Miyake Sobornost & some thoughts on tabs ~
I guess some days there are a lot of tabs and other days I just write alt-universe monetary policy? My excuse is: it’s Thursday. Tomorrow for subscribers I’ll explain how we actually create money—the whole thing with the Policy Stone and the Federal Open Markets Blood Ritual and so on. Sique [sic].