kaal:claim:3402701-035

Transparency is not an unqualified good for monetary policy: a currency only partially backed by reserves can be arbitraged by a Soros-style shorting strategy much more easily when the quantity of reserves is public.

Source quote, verbatim

For instance, a currency partially backed by reserves can be successfully arbitraged by Soros' shorting strategy much easier if the quantity of reserves is known

From

Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019), 3.4.2 Communication Design, p. 26
https://ssrn.com/abstract=3402701 · source PDF

Cite as

Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701

Holds when

partial reserve backing
reserve quantities publicly known

Classification

failuresupport: arguedfailure: transparency-enabled-peg-attackfamily: trigger-design-failuredisclosureconsensus-and-securitytokenomics

Related claims

supersedes kaal:claim:3396522-002 Monetary policy making for fiat currencies largely lacks transparency, and that opacity prevents markets from ...

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