Author Topic: Only continuous improvement of MCR is the only way out for BTS  (Read 42 times)

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Offline gghi

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Only continuous improvement of MCR is the only way out for BTS
« on: November 30, 2018, 02:57:36 am »
 In this paper, I will use a longer length to demonstrate the importance of improving MCR, and hope to read it patiently.
Why must MCR be improved?
Firstly, high MCR is the guarantee of high market value of BTS, secondly, high MCR is the guarantee of stable operation of the system, and thirdly, high MCR is the foundation of smart currency anchoring.
High MCR is the guarantee of high market value of BTS
The market value of BTS is closely related to the level of MCR, because CNY is generated by BTS mortgage, so other conditions remain unchanged, too low MCR can produce more CNY. Conversely, high MCR produces less CNY. If we want to increase MCR and produce the same CNY, we must raise feeding price, which is beneficial to the rise of market value of BTS, and lowering feeding price will depress the price of BTS. If MCR is too low and CNY demand is not up, BTS price is not up, because higher prices will produce more CNY, unable to digest.
Specific operating methods, continuously improve MCR, while raising feed prices. When the MCR is high enough and the feeding price is much higher than the market price, then the market falls. Because the price is much higher than the market price, no one eats the burst warehouse receipt, which is equivalent to locking the warehouse. Neither harms the mortgagor nor puts pressure on the market. The larger the volume of such locks, the more conducive to the rise of BTS prices. When explosive warehouse receipts do not put pressure on the market, the market multi-empty game is the fair battlefield.
High MCR is the guarantee of stable operation of the system
We see that too low MCR leads to a sharp fall in market prices, easy to insolvent, CNY production will gradually decline. Several times, facing the danger of black swan, the system can not run steadily, CNY can not be used normally, a deflationary currency can not meet the normal use. When the market falls, we should release the risk. In fact, we are putting more pressure on the market, which makes it worse. We should reduce system risk by improving MCR.
High MCR is the foundation of smart currency anchoring
The core mechanism of BTS is anchoring currency. BSIP42 solves the CNY premium problem well, but there is no way to deal with the discount problem. One important reason is that the MCR is too low. Excessive mortgage rates lead to excessive risk to the system, and market declines are prone to insolvency. When it comes to insolvency, we still talk about anchoring as a castle in the air. The fundamental measure to avoid anchoring deviation caused by insolvency should be to improve MCR.

After the feeding reform, the cancer of BTS is too low MCR. Too low MCR limits the price rise of BTS, because CNY demand remains unchanged, MCR remains unchanged, and the price rise of BTS means that CNY depreciates, so it can not go up.

   
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