So, you are only going for a common medium of exchange, something still elastic to real and artificial supply and demand, and since it would not be Neo-Keynesians running the show we can rest peacefully knowing the old manipulation games are not 24/7/365 in the center ring of the circus. The long-term stores of value should still be valued commodities, much as it was throughout our history, sans the debasement of course. Fraud of any kind can be made a capital crime and punished accordingly...no more Corzines!
Two Common mediums of exchange. One naturally Speculative and one naturally Sound. I am sure there are still short term games that could be played - high taxes forcing Blue Dollars in demand, but no immediate spending to create a reverse National Bit Coin demand, and vice versa- and I have no illusion that a different power structure for the Fed will prevent graft and corruption. Its more to make graft and corruption more difficult. Cronies could be used as proxies for spending.. a secret deal to give Citibank a Trillion dollars and suddenly Citibank is a philanthropist who will "contribute" to social security by running their own welfare program or some such. Likewise, this would do nothing to stop TARP-like moves, where Huge loans are made to corporation at low rates in bail outs etc. Only the governments would be required to have all non defense spending in bitcoin.. But Bitcoin serves as an Anchor to the Blue Dollar, much as Gold did to the Greenback till the gold window closed. They can only take it so far out of whack. If they take it farther, in effect printing and inflating Blue Dollars supply, bitcoin cannot grow any faster ( there can be no race to the bottom like we see with Euro vs. Dollar vs. Yen vs. Yuan...) - the "Stagflation" we are seeing now would result in price inflation in blue dollars, and possible price deflation in National BitCoin - Savers in Bit Coin are rewarded, speculators in Blue Dollars are punished. This will likewise do nothing to fix the HFT trading or large money inflows into markets. The only thing I can think to do there is place mandatory life-times on bids and asks that are in the seconds, if not minutes. Highest bid in those windows wins ( and must pay, even if price falls during the bid window) - likewise, there should be a minimum holding time for a security - 3 days to a week I think. Much of the volatility in the market is due to these people trying to make a fast buck by being faster than the crowd. This would make that near impossible, and hopefully the result would be a market in which day traders are a thing of the past, and the goal is investing for longer term frames, and "not the get rich quick by screwing the latecomer" that turns the market into a casino. I am sure there would still be gamers in the system. .. it would just make gaming it harder. You can no longer manipulate a market price by bidding on your own asks -even slow-mo-Joe will get a chance to bid, so your ask better be legit. I think I would also outlaw shorts in anything but commodities (in a commodity , a short allows a producer to sell his risk on the amount of production to someone who can more afford the loss if the bet goes south) - I don't see how Shorts are anything but gambling in terms of Stocks and non-commodity contracts. A producer has factors outside their control that affect yields, and market price at a given time. The risk is inherent in the production. If you hold company A, what legitimate reason do you have to sell your risk to another? You assumed the risk buying the stock ( in someone else's production) . Sell the stock now for what its worth and stop complaining.
I am not sure if National BitCoin should even be traded internationally - Not doing so would give us a sort of firewall between internal transactions and foreign markets. In other-words a Foreigner would have to take his local currency, transfer it to blue dollars, and then, in an American owned and operated bank, convert the blue dollars to bitcoin. Since bit coins can be moved only using a connection to the bit coin servers, and since there is no bitcoin cash, access to the currency can be strictly controlled. (currently Bit coin is being used in just the opposite way - Folks in Greece were getting around capital controls by buying bitcoin locally and redeeming it internationally) I am not against having and participating in second International Bit coin system as well, I just see it as a possible threat to the safety of the sound money we are trying to create in America. If an international system of sound money gains traction and becomes the new reserve, its all to the better, as a system like that prevents any country from gaining the power of the reserve and abusing it ( as we arguably have done in the last 50 years)
In the end, you can only make things better. You can't fix them. That is the problem with Liberals - they are looking to fix things, and inevitably set up incentives that result in undesired behaviors ( which they then set out to fix - becoming ever more totalitarian with each iteration) Eventually the liberals look around, decide the situation is really not optimal - because totalitarianism never is, and just move from California or Detroit and repeat the process. Liberals try to change Human Nature itself - to build a better person, by force. You will like it once you see what is in it- once you are ground under my iron boot you will see I was right! . That is why they fail. Each. And. Every. Time. Some humans will always Aim to misbehave. And the liberal solution is to always kill those humans who refuse to submit to their tyranny. Mass Murder= Utopia. Just around the corner. I promise. Human Nature is a river, and the the founders simply tried to balance and channel human nature into more productive courses. Liberals always, always, always try to dam the river and allow nothing to flow to the other side. The consequences are obvious and inevitable. Each and every time.