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Rickards - >>> Trump Vows to Stop Biden Bucks
BY JAMES RICKARDS
JANUARY 30, 2024
https://dailyreckoning.com/trump-vows-to-stop-biden-bucks/
Trump Vows to Stop Biden Bucks
At a recent New Hampshire campaign rally, Donald Trump reiterated what he’s been saying for months: that central bank digital currencies (CBDCs) are dangerous and he would never allow one if elected:
Tonight, I am also making another promise to protect Americans from government tyranny. As your president, I will never allow the creation of a central bank digital currency…
Such a currency would give… our federal government, the absolute control over your money. They could take your money. You wouldn’t even know it was gone. This would be a dangerous threat to freedom.
Welcome aboard, Mr. President.
If you’ve been following my writings, you know that I’ve been sounding the alarm about what I call Biden Bucks for nearly two years. I’ve warned about Joe Biden’s plan to control your money and take away your privacy rights completely.
I like to think that someone brought my warnings to Donald Trump’s attention since I’ve been one of very few people to outline the dangers that Biden Bucks pose to Americans’ freedom. I’d be very happy if I was at least partially responsible for stopping them.
Biden Bucks, Summarized
To catch you up, Joe Biden is planning to replace your physical cash with new electronic currencies.
These new electronic currencies are called CBDCs — or, again, “central bank digital currencies” (I like to call them “Biden Bucks” because I want Biden to take full credit for what I consider to be crimes against American citizens).
And these Biden Bucks would have the full backing of the U.S. Federal Reserve. They’d replace the cash (“fiat”) dollar we have now. And if Biden gets his way, they’d be the sole, mandatory currency of the United States.
What does this mean for you? It would make your money less truly your own. It would be subject to government control, as Donald Trump said in New Hampshire.
We’re already seeing how many retailers are no longer accepting cash across America. What happens when physical cash is eliminated altogether from any payment transactions?
You’ve Met Your Quota!
Imagine this. To further advance his Green New Scam, what if Joe Biden and his cronies decide that gasoline needs to be rationed?
Your Biden Bucks could be rendered useless at the gas pump once you’ve purchased a certain amount of gasoline in a week! You want gas, but all you get is a one-word message: Declined.
How’s that for control?
Biden Bucks would create new ways for the government to control how much you can buy of an item, or even restrict purchases. It would keep score of every financial decision you make.
In a world of Biden Bucks, the government will even know your physical whereabouts at the point of purchase.
It’s a short step from there to putting you under FBI investigation if you vote for the wrong candidate or give donations to the wrong political party. If any of this sounds extreme, fantastical or otherwise far-fetched, it’s not.
It’s Happening Right Now
Recently, the FBI and Financial Crimes Enforcement Network (FinCEN) sent letters to U.S. banks asking them to identify and provide a list to the government of customers using Zelle, Venmo and similar payment channels who mentioned “MAGA,” or “Trump” in their message traffic.
They also asked for details on bookstore purchases of “religious” articles including Bibles. Finally, they asked for details on those shopping at Cabela’s, Dick’s Sporting Goods or Bass Pro Shops, presumably on the view that those are places to buy guns and ammo.
This is a clear-cut violation of the First Amendment (free speech, freedom of religion), Second Amendment (right to bear arms) and Fourth Amendment (no unreasonable search and seizure).
It’s not a crime to write “MAGA,” etc. and therefore there’s no reasonable basis for suspecting a crime, and therefore no right to get the information without a warrant, which requires a judge. Any judge would likely reject the warrant request since there’s no probable cause.
This is an obvious case of profiling that may well involve AI. If you shoot someone and you’re wearing a MAGA hat, you get arrested for the shooting, not the hat. In this case, the hat is enough to put you under surveillance because you have been profiled as “an enemy of the people” by the government’s definition.
I predicted this kind of surveillance would arise with the use of Biden Bucks since the government would have your financial records and would not have to go to the banks or get a warrant. I’d like to say I was wrong, but unfortunately I was right.
The FBI Isn’t Waiting for Biden Bucks
It looks like the FBI is not waiting for CBDCs. They’re collecting the same information we said they would directly from the banks. I specifically warned that “books” would be one category the FBI would want to know about since it helps with the profiling.
This goes hand in hand with prior revelations that the FBI was targeting traditional Catholics (especially those who go to Latin Masses) for surveillance as possible terrorists.
This is exactly why I sounded the alarm back in 2022. This administration is committed to not only taking control of your money with Biden Bucks, but also using the FBI and other government agencies to strip away your rights as citizens.
That shouldn’t surprise you if you’ve noticed how the administration has weaponized these agencies to punish their political opponents.
FBI whistleblowers are also stepping forward to reveal that the FBI is lowering standards to recruit more candidates with “left of center” political views. They say the agency is attracting candidates who seek to be “agents of social change versus protecting the country.”
One whistleblower said he (or she) rejected a special-agent applicant because the candidate’s only work experience was “working two years as a coffee-shop barista and having a bachelor’s degree in art history.”
That’s not exactly your stereotypical FBI agent, to say the least. But headquarters ordered the subsequent whistleblower to forward the application. It’s not hard to imagine the abuses this type of FBI could commit under a system of Biden Bucks.
How far will this go? Some Republicans are beginning to act.
Pushback
Sen. Tim Scott is now demanding explanations from the Treasury Department (which runs the Financial Crimes Enforcement Network, FinCEN), which asked banks for information on customers’ religious purchases, including Bibles, as evidence of domestic terrorism.
The FBI was working side-by-side with FinCEN on this. (I have been inside FinCEN headquarters as part of my work in the intelligence community.)
President Trump is right. Biden Bucks are a dangerous threat to freedom. They’re a threat to our constitutional liberties and give the government total control of our private financial information.
A change in leadership is our last hope in stopping this madness from continuing. With so many of our freedoms at stake, every presidential candidate (outside of Biden, for obvious reasons) should be forced to take a stand on this critical issue.
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>>> The Federal Reserve Broke The Budget. Buckle Up For What Comes Next.
Investor's Business Daily
by JED GRAHAM
11/24/2023
https://www.investors.com/news/economy/federal-reserve-broke-the-budget-what-budget-deficits-mean-for-the-economy-and-sp-500/?src=A00220
The 10-year Treasury yield set off roaring alarms about the U.S. budget when it surged to 5% last month. Now those warnings look like a fire drill. Federal Reserve rate hikes seem to be over for now, giving the bond market a reprieve and allowing a powerful S&P 500 rally to resume.
Enjoy it while it lasts. The next debt scare may be the real thing, and it could rock the U.S. economy and stock market.
Here's why: The Fed's historic turnabout, from enabling massive budget deficits to directing the sharpest rate hikes in 40 years, has seemingly broken the budget. Treasury market stress is almost certain to return.
The era of Fed quantitative easing and near-zero interest rates promoted carefree fiscal policies that led the U.S. to rack up $20 trillion in federal debt since the 2008 financial crisis.
Federal Reserve Fuels Red Ink
Exhibit A in the case of the broken federal budget is the deficit's surge in fiscal 2023, which ended Sept. 30. Unemployment was near a record low and GDP growth was strong. Under those conditions, the budget deficit usually shrinks. But it essentially doubled to $2 trillion, if you ignore accounting for Biden's student loan forgiveness that was struck down by the Supreme Court.
The Federal Reserve's fingerprints are all over the red ink. After the Fed sent more than $100 billion in interest on its bond portfolio to the Treasury in fiscal 2022, it had to halt those payments last year as bond prices fell. Having let inflation get out of the bag, an 8.7% cost-of-living adjustment stoked a $134 billion increase in Social Security checks.
Another roughly $100 billion went to FDIC bailouts, as banks like Silicon Valley Bank that loaded up on Treasuries when rates were ultralow became insolvent when Treasury yields surged. To top it off, the Fed hiking its key rate past 5% forced Uncle Sam to pony up an extra $177 billion in interest on the debt. That problem is destined to keep growing by leaps and bounds.
Debt Service Costs Skyrocket
With the Federal Reserve reversing its easy-money policies, the expense of servicing the national debt is exploding. Interest on the debt vaulted to $711 billion in fiscal 2023. That's up from $534 billion in 2022 and $413 billion in 2021. This month, debt service is running at an $825 billion rate. That's about what the U.S. spends on national defense.
US debt servicing costs chart
"The misjudged confidence that we had entered a brave new era of low interest rates is costing us dearly now — first through a period of high inflation and now through persistent pressure on a government budget that already has precious little room for maneuver," wrote Sonal Desai, chief investment officer at Franklin Templeton Fixed Income.
While a debt spiral isn't inevitable, almost no one thinks that Washington will act to avoid one. Fitch Ratings, in August's U.S. credit rating downgrade, bemoaned "a steady deterioration in standards of governance." When Moody's cut its U.S. rating outlook to negative this month, it warned of "rising political risk to the US' fiscal position and overall sovereign credit profile" as political polarization thwarts budget deficit reduction.
The catalyst for another bond-market rout — and possibly another U.S. credit-rating downgrade — could be the coming debate over the $3.3 trillion cost over 10 years to renew parts of the 2017 Trump tax cuts. Those cuts are due to expire at the end of 2025.
Bond Vigilantes
That tax debate won't get serious until after the 2024 election. But you can expect to hear plenty from "bond vigilantes" — a term coined by Wall Street strategist Ed Yardeni in the 1980s for the bond traders who made Washington pay for fiscal excess by driving up Treasury yields.
"At that point we can have renewed pressure on the bond market to the extent that nothing is being done to alleviate the reckless path the deficit is on," Yardeni, president of Yardeni Research, told IBD.
The "unsettling" thing, Yardeni said, is that "the bond vigilantes may be more powerful than ever because there's more debt than ever and it's compounding at a faster rate because of higher interest rates."
The Congressional Budget Office's latest projections show that under current law — meaning all of those 2017 tax cuts sunset on schedule — public debt as a share of the U.S. economy would rise from 98% to 119% by 2033. The Committee for a Responsible Federal Budget estimates that extending all of the tax cuts would raise that share by 10 percentage points. Under that scenario, the projected annual budget deficit in 2033 would exceed $3 trillion, or 8% of GDP. That's unheard of, except during war or in the wake of a recession.
No Plan To Rein In Budget Deficits
For reserve-currency countries like the U.S., for which default isn't a real risk, Moody's is less concerned about a high debt-to-GDP burden. Instead, it's focused on another metric reflecting its willingness to take action to curb escalating debt costs.
US budget gap chart
In 2022, the government spent 10 cents of every dollar in tax revenue on servicing the national debt. CBO projections show interest expense doubling to 20 cents on the dollar by 2033. But Moody's sees that as too optimistic. It sees 26 cents of each dollar in taxes going to debt service. Moody's says that would be the kind of fiscal stewardship consistent with a C-type credit rating.
America's unique strengths, including the central role of the dollar, solid productivity growth and technological leadership, afford Washington more leeway, Moody's says. But the lack of any plan to improve the fiscal outlook "is fundamentally different" from most "Aaa"-rated peers, such as Germany and Canada.
A credit-rating downgrade, if it comes to that, would signal that fiscal weakness will erode Treasuries' "preeminent safe-haven status."
Wall Street barely flinched after Moody's shot across the bow on Nov. 10 because the bond market had already flashed its own warning.
"The Bond Vigilantes may be saddling up," Yardeni wrote Aug. 3, heralding their return after a 16-year hiatus.
Federal Reserve QE Era
Bond vigilantes' long absence was marked by ultralow rates, low inflation and tepid demand ushered in by the 2008 financial crisis.
The Fed began its quantitative easing as an emergency market stabilization tool in late 2008. The central bank bought up government-backed mortgage securities to keep housing finance flowing. Yet with its key interest rate already at zero and the recovery unusually subdued, the Federal Reserve announced a second round of asset purchases — this time Treasuries — and then a third.
Joe Gagnon, senior fellow at the Peterson Institute for International Economics, argues that the Fed "really should have been even more aggressive," saying it took too long to achieve its full-employment mandate. The unemployment rate wouldn't fall to 5% until late 2015.
'Crazy' Not To Swell Budget Deficits
Yet QE, which held market interest rates low despite massive federal deficits, made a mockery of fiscal responsibility.
Conventional wisdom came to hold that "governments would be crazy not to deficit-spend more, since they could borrow pretty much for free," wrote Franklin Templeton's Desai. And for a while, it seemed to work.
Federal Reserve's 'Massive Mistake'
Even as public debt nearly tripled as a share of the U.S. economy from 2007 to 2021, net interest outlays actually dipped. That's because the average interest rate on debt held by the public fell from 4.7% of GDP to 1.4%.
US Treasury yields chart
Then came the Federal Reserve's "massive mistake," as Gagnon sees it, of keeping its pedal to the metal in 2021, despite gargantuan fiscal stimulus to speed Covid recovery. The biggest inflation outbreak in 40 years ensued, spurring rapid-fire Fed rate hikes to stem it. The interest rate hikes steadily lifted the Treasury's average borrowing rate to 2.3% by the end of 2022 and 3.1% as of October.
About $8 trillion worth of debt held by the public is set to mature over the next year. The Treasury will have to reissue that sum. The key question is at what interest rate.
Fed Rate Cuts Won't Be Enough
Following soft recent jobs and inflation data, markets expect the Federal Reserve to cut its key rate a full point in the coming year to 4.25%-4.5%. That would reduce the risk of a near-term fiscal derailment over runaway debt-service costs.
Yet it won't take sky-high rates to blow up the budget. Moody's projection of soaring debt-service costs assumes that the 10-year Treasury yield will settle back to around 4%. But the high stock of national debt is only about half the reason the budget deficit may hit 8% of GDP in a decade. The other half is a structural fiscal gap, with tax revenue insufficient to pay for the rising cost of Social Security and Medicare.
National defense, income-security and health care programs will continue to take up close to 100% of tax revenue, CBO 10-year projections show. That's even if most Trump tax cuts expire. Almost all the rest of federal spending will go on the government's credit card. That includes government salaries, veterans' health, border security, Pell Grants, National Institutes of Health research, infrastructure projects and more.
Fiscal Responsibility? Not Yet
Could fiscal responsibility make a comeback, now that the bond vigilantes have awakened? Not as long as big budget deficits are a realistic alternative to tax hikes on the right and spending cuts on the left. That will take significantly higher 10-year Treasury yields than we have today.
Consider this litany of reasons not to worry about the deficit from Dean Baker of the liberal Center for Economic and Policy Research. The inflation surge is fading. Addressing climate change will do a lot more for future generations than cutting the budget deficit while ignoring climate change. Japan has a far higher debt load than the U.S. and it's getting by OK. And artificial intelligence could ignite a productivity boom that spurs faster growth and makes our debt more manageable.
Treasury Yield Fire Alarm
The 10-year Treasury yield's surge to 5% in October — up 1.5 percentage points over three months — set off alarm bells that the scale of government debt issuance was overtaking the market's willingness to absorb it. That seemed to raise a risk of still-higher yields ahead.
News that Treasury will borrow less than expected in Q4 and further signs of easing inflation pressures have sent government bond yields tumbling over the past month. Yet it appears that the bond vigilantes are biding their time, rather than going back into hibernation.
Real Treasury Yields At Pre-2008 Levels
Confirmation of bond vigilantes' return came in September. That's when the yield on 10-year TIPS, or Treasury Inflation-Protected Securities, made a clear break above 2% for the first time since 2007. Though off its October high of 2.5%, the 10-year TIPS yield is holding at 2.20%. That's after spending most of the QE era below 1% — and below 0% for some of it.
The TIPS yield subtracts the inflation rate, making it synonymous with the real 10-year interest rate. The challenge the federal government will face in paying its bills is that real Treasury yields have largely reverted to pre-financial-crisis levels.
A number of factors help explain the reversion. Federal Reserve bond buying that squelched market signals has given way to reducing its assets. Baby boomers have gone from saving for retirement to living off their savings. Offshoring of production has turned to onshoring, with massive investment in chip manufacturing, electric vehicle supply chains, artificial intelligence and more. In general, funding has been scarcer relative to the demand for it.
What's unknown is where real interest rates will settle. Franklin Templeton's Desai thinks the neutral Fed policy rate — neither accommodative nor restrictive — may be at least 4%. That implies at least a 2% neutral real rate.
The term premium for holding bonds longer could add another 1 percentage point to the 10-year Treasury yield, putting it around 5%, she says.
If that's right, then the fiscal outlook is even worse than Moody's thinks.
What does all this mean for the U.S. economy, Fed policy and the S&P 500?
Jurrien Timmer, Fidelity's director of global macro strategy, envisions a scenario in which U.S. Treasury yields stretch, not to the breaking point, but enough to create "choppier seas" for the economy and financial markets.
Over the past several decades, the ongoing fall in interest rates and inflation, with little volatility, produced "elongated cycles, with a recession every 10 years, if that," Timmer told IBD.
The Federal Reserve could pivot quickly and pull out all the stops, if needed, without worrying too much that inflation would take off.
Federal Reserve May Not Ride To Rescue
But going forward, Timmer says, the Fed "might have to be much more muted in its reaction" to economic weakness. Higher rates might be quicker to choke off growth, leading to shorter expansions.
What if the 10-year Treasury yield shoots to 6%, threatening runaway interest costs and an economic slump, as bond vigilantes rebel?
In that case, Wall Street shouldn't necessarily expect the Fed to ride to the rescue with rate cuts, Gagnon says. That's especially true if massive and growing fiscal deficits prove inflationary, as he expects they will.
"The bottom line is inflation is going to be at 2% and the Fed is going to make sure that happens. It doesn't matter what interest rate Treasury has to pay," said Gagnon, who served in various Fed roles over two decades.
Even if the economic toll from a rise in Treasury yields sends inflation below 2%, the Federal Reserve might not be quick to roll out the heavy artillery. The Fed's modus operandi still treats QE as a last line of defense — after interest rates are cut to zero. In the new old normal, in which a 4% fed funds rate is neutral, that might take a while.
Fed End Game?
Still, some see that QE end game as inevitable, with the Federal Reserve essentially carrying some of the debt it enabled. "We will need QE in some form again, and in big size, in the future to control the rise in debt," Deutsche Bank strategist Jim Reid said.
Others think the Fed might eventually resort to yield curve control, dictating interest rates on the debt rather than influencing them with bond purchases. That's the approach it used to finance World War II, before the Fed got its independence in 1951. It's what the Bank of Japan uses today.
"The real acid test will only come if Treasury bond prices fail to rally on bearish economic data, such as a sudden collapse in payrolls or, for that matter, a stock market crash," wrote Jefferies strategist Christopher Wood. "This is the context where it becomes much more likely that Washington will end up resorting to Japanese-style yield curve control policies."
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Rinear - >>> Financial Intelligence Report
The Newsletter for people willing to take control of their financial future
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173257097
Part 1: General Commentary
Part 2: Market Commentary
Silence of the Lambs
Okay....
The one thing the globalist cabal hates more than anything, is us Rubes being able to share information about the corruptions they are engaged in. It angers them to no end, that true American Patriots, can investigate their plans, and via the Internet, try and counter them. So, as you can imagine, they want ever more control over the net, and what can be posted on it and by whom. Consider this.... this is the kind of "inside" info that the elitists cannot allow to be spread in a free speech society:
Tara Servatius
NikkiHaley had breakfast with BlackRock CEO and World Economic Forum board member Larry Fink Tuesday morning to raise money. By that afternoon, Haley was pushing mandatory "verification" of all social media users. Here's why.
Fink's big push is what he calls "digital payments," or central bank digital currency. Fink wants America to adopt a system like India's digital system, called Aadhaar, which citizens must have a verified digital ID to use. Bill Gates' foundation designed their digital ID system, which they use to access the internet.
Last week, the World Economic Forum held a symposium to push "50 in 5" its goal to get 50 countries in 5 years to adopt Bill Gates' digital identity system, which strips anonymity from users, who then would be required to have it as part of a digital wallet in order to acess and spend digital money. With money tied to identity for the first time, governments could control how an individual spends it, because the central bank digital currency would be programmable. It is an authoritarian's dream because cancellation could now include tracking people's online postings and freezing their ability to use money.
The Europeon Union last week announced it is in the process of adopting Gates' totalitarian digital ID system, the software for which he is giving away for free. It would be voluntary at first, but eventually required to access social media, use money, and do just about everything else that is digital.
Essentially, what Haley just did was sell you out to get the so-called "mark of the beast" in exchange for campaign funding from the Fink crowd, which has limitless resources. Fink is the creator of ESG scores, which cancel companies that aren't woke enough by cutting them off from investment. He's apparently angling to cancel individuals and "score" them the same way. Oh, and by the way, digital IDs are the basis for the Chinese social credit system.
It's things like that, things I've said, things Don Bongino says, things Alex Jones says, things Dave Janda says, and multiple others, that absolutely drive them batshit. So, with that in mind, many of you don't know that the Biden admin has requested that basically the FCC takes over every single aspect of the internet. I'm not talking some goofy group of "fact checkers" in someone's basement. I'm talking about everything concerning the infrastructure, the implementation, the speed of downloads, and much much more.
Biden called on the FCC to implement a one-page section of the 2021 Infrastructure Investment and Jobs Act (Infrastructure Act) by adopting new rules of breathtaking scope, all in the name of "digital equity." For the first time ever, those rules would give the federal government a roving mandate to micromanage nearly every aspect of how the Internet functions...from how ISPs allocate capital and where they build, to the services that consumers can purchase; from the profits that ISPs can realize and how they market and advertise services, to the discounts and promotions that consumers can receive. Talk about central planning.
Folks they want it all.
But do not take my word for it. The text of the order expressly provides that the FCC would be empowered, for the first time, to regulate each and every ISP's:
"network infrastructure deployment, network reliability, network upgrades, network
maintenance, customer-premises equipment, and installation;
"speeds, capacities, latency, data caps, throttling, pricing, promotional rates, imposition of late
fees, opportunity for equipment rental, installation time, contract renewal terms, service
termination terms, and use of customer credit and account history";
"mandatory arbitration clauses, pricing, deposits, discounts, customer service, language
options, credit checks, marketing or advertising, contract renewal, upgrades, account termination,
transfers to another covered entity, and service suspension."
As exhausting as it is to read that list, the FCC itself says it is not an exhaustive list. The Biden Administration's plan empowers the FCC to regulate every aspect of the Internet sector for the first time ever. The plan is motivated by an ideology of government control that is not compatible with the fundamental precepts of free market capitalism. But it gets worse. The FCC reserves the right under this plan to regulate both "actions and omissions, whether recurring or a single instance." In other words, if you take any action, you may be liable, and if you do nothing, you may be liable. There is no path to complying with this standardless regime. It reads like a planning document drawn up in the faculty lounge of a university's Soviet Studies Department.
Well the vote took place on the 15th and yeah it passed. The vote was 3-2 in favor. This is what Ted Cruz had to say about it Monday:
U.S. Senate Commerce Committee Ranking Member Ted Cruz (R-Texas) released the following statement after the Federal Communications Commission (FCC) voted to finalize its "Digital Discrimination" order:
"Despite admitting there's "little to no evidence" of discrimination by telecommunications companies, Democrats are hoping to convince the American people that broadband Internet is so racist they need to plow ahead with government-mandated affirmative action and race-based pricing. The only beneficiaries of this Orwellian "equity" plan are overzealous government regulators who want to control the Internet."
They're coming after us hard folks. From digital money, digital ID systems, absolute control of every aspect of the internet, everything you say or do. We are in the fight of our lives. That's why finding like minded web sites/pod casts, etc are so vital right now.
I used to do 10 - 15 radio shows and podcasts a week, mostly on terrestrial radio. It got overwhelming and I stopped about 5 years ago. But I think it's time for me to get back on the air, and really let loose. We're in a war, and I don't want to lose. Good luck.
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Rickards - >>> Why’s the Dollar So Darn Strong?
BY JAMES RICKARDS
NOVEMBER 7, 2023
https://dailyreckoning.com/whys-the-dollar-so-darn-strong/
Why’s the Dollar So Darn Strong?
The dollar has been extremely strong over the past two years. This persistent dollar strength has been a mystery to many. After all, the dollar’s problems are well known.
The ratio of government debt to GDP for the United States is at a record high approaching 130% (a prudent level is considered 30%, and anything over 90% is a headwind to any economic growth at all).
The U.S. is running multitrillion-dollar deficits year after year. The Congress and White House seem in the grip of Modern Monetary Theory, which claims that the U.S. can run unlimited deficits and accumulate unlimited debt without economic harm because it can print money in unlimited quantities to finance the debt and spending.
Meanwhile, projected annualized interest payments on the U.S. national debt exceeded $1 trillion at the end of October, according to Bloomberg. The cost of debt service has doubled in the past 19 months as interest rates have risen.
This fiscal profligacy comes against a backdrop of social unrest and political dysfunction. We’re facing a presidential election next year in which one candidate, Biden, is senile and the other candidate, Trump, may be behind bars on Election Day.
Take your pick. But the dollar keeps on chugging along. How can the dollar be so strong against such a dismal landscape?
There are two answers to this question.
Answer No. 1
The first is that the dollar has its problems, but other currencies are in even worse shape. For example, the Chinese yuan is on the brink of collapse being held aloft by non-sustainable intervention by Chinese banks.
The Japanese yen is joined at the hip with the yuan because of the extent of Japanese investment in China financed by Japanese banks. With the yuan going down, the yen will go down in sync.
So that’s two major currencies with problems.
Meanwhile, Europe and the U.K. have deindustrialized under the sway of the greeniacs pushing the Green New Scam policies. Now Europe faces a winter of freezing in the dark if cold weather is extreme and Russia decides to turn off the energy taps.
Germany, the largest economy in the eurozone, is heading for recession if it isn’t already in one, and the same is true for the U.K. That’s two more major currencies facing troubles.
So yes, the dollar has its problems, but as an investor do you really prefer sterling, euros, yen or yuan?
Answer No. 2
The second reason for the dollar’s strength is much more technical and not well understood, but it’s critical to grasp. You don’t need to nail down the technical details; it’s enough that you understand the bigger picture.
It involves the so-called Eurodollar.
Eurodollars are dollar-denominated deposits held at foreign offices of major banks, and therefore fall outside the jurisdiction of the Fed and U.S. banking regulations.
The Fed actually has very little influence over the global dollar market and the exchange value of the dollar. The old currency metrics of balance of trade and moves in capital accounts are leftovers from the world of fixed exchange rates, which have been gone for decades.
What drives the dollar is the Eurodollar market, as conducted by the world’s largest banks in London, New York and Tokyo. It’s here where global liquidity and interest rates are actually determined.
The Eurodollar market needs a constant supply of depositors parking their money in offshore offices of major banks.
Right now, this market is in contraction.
Derivatives are being unwound, balance sheets are being trimmed and interbank overnight lending is being financed with collateral.
And these banks are demanding the best collateral. They won’t accept corporate debt, mortgages or even intermediate-term U.S. Treasuries. The only acceptable collateral consists of short-term U.S. Treasury bills, the shorter the better. This means 1-month, 3-month and 6-month bills.
Those are denominated in dollars, of course. In order to get the bills to post as collateral, banks have to buy dollars to buy the bills. This has created enormous demand for dollars. And that partly accounts for the strength of the dollar.
Again, it’s not important that you understand the intricacies of the eurodollar system, just that high dollar demand in the Eurodollar market is contributing to dollar strength.
The fundamental dollar shortage problem is not going away soon, and will continue to support the dollar.
What About a New BRICS Currency?
What about the prospect of a BRICS currency union and the move toward a new currency? I wrote a lot about that ahead of the BRICS Leadership Summit that took place back in August.
This new currency would be gold-linked and would displace the dollar in time as a major player in world trade.
Shouldn’t that be weakening the dollar?
After all, the prospect of a BRICS currency should pose a severe threat to the petrodollar, which is a pillar of dollar strength.
But this movement is still in its infancy and, unsurprisingly, is experiencing growing pains.
It’s not yet as unified as it needs to be if it’s going to seriously threaten the dollar. And one of those BRICS nations — India — seems to be playing both sides.
It was recently reported that India’s government is expected to reject demands from Russian oil companies to pay for Russia’s crude oil imports in Chinese yuan.
Russia currently has a surplus of rupees and is having trouble spending them. At the same time, demand for yuan has grown as Russia trades more with China.
Meanwhile, India mostly uses the dirham and U.S. dollar to pay for Russian oil imports. Basically, India is currently in a balancing act. They consider Russia an important economic ally while they consider China a geopolitical rival.
India fears popularizing the yuan will hurt its own efforts to internationalize the rupee. In fact, India was the only BRICS nation to oppose the introduction of a common currency, fearing it would benefit the yuan.
India’s refusal to give in to Russia’s demands leaves a significant role for the dollar, which is another reason to believe the dollar will retain its strength for the foreseeable future.
The Golden Ruler
Now, don’t get me wrong. I’m not saying the dollar is strong. It isn’t, for all the reasons I listed above. It’s just stronger than its competitors, and that’s why it appears strong.
Is there some way to tell if the dollar is actually getting stronger or weaker without making reference to other currencies?
Yes. The answer is gold. Think of gold as a ruler that measures dollar strength or weakness.
Gold has gained close to 10% over the past month or so. I expect gold to become much stronger, despite some temporary setbacks along the way.
Investors should consider today’s prices a gift and perhaps a last chance to acquire gold at these prices before the real safe haven race begins.
Below $2,000, gold is so cheap right now, it’s practically a steal. I strongly urge you to take advantage.
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Rickards - >>> Another Bank Bites the Dust!
BY JAMES RICKARDS
NOVEMBER 6, 2023
Another Bank Bites the Dust!
Citizens Bank was a small bank in Iowa with about $66 million in assets. Its loan portfolio consisted largely of commercial and industrial loans.
Well, this past Friday the Federal Deposit Insurance Corporation (FDIC) announced that Citizens Bank had failed due to significant hidden loan losses totaling about $15 million.
Because Citizens Bank was not a member of FDIC, the bank’s losses will be the responsibility of the state of Iowa.
This is the sixth notable bank failure this year. As you might recall, the first five were Silicon Valley Bank (back in March), Silvergate Bank (a bridge from the crypto world), Signature Bank (another crypto conduit to the regular banking world), First Republic Bank and the giant Credit Suisse.
I warned in March that the failure of Silicon Valley Bank would be just the start. Now we’ve had five additional bank failures.
And this latest failure won’t be the last.
Veterans of such crises (and I include myself in that category) know that once the dominoes start falling, they keep falling until some government intervention of a particularly draconian kind is imposed.
We’ve seen some significant regulatory actions from the Federal Reserve, the FDIC, the U.S. Treasury and the Swiss National Bank, but the fixes have been temporary and followed quickly by new failures.
The FDIC abandoned its $250,000 deposit insurance limit and effectively guaranteed all the depositors in Silicon Valley Bank and Signature Bank, a guarantee of over $200 billion in deposits. This has impacted the FDIC insurance fund and required higher insurance premiums from solvent banks, the cost of which is ultimately borne by consumers (you).
The Federal Reserve went further and offered to lend money at par for any government securities tendered as collateral by member banks even if the collateral was worth only 80% or 90% of par. These collateralized loans are financed with newly printed money, which might exceed $1 trillion.
These actions have thrown the U.S. banking system and bank depositors into utter confusion. Are all bank deposits now insured or just the ones Janet Yellen decides are “systemically important”? What’s the basis for that decision? What about the fact that unrealized losses on U.S. bank portfolios of government securities now exceed $700 billion?
If those losses are realized to provide cash to fleeing depositors, it could wipe out much of the capital of the banking system.
Unrealized losses on securities held by FDIC-insured banks exceed $620 billion. That’s the amount of bank capital that would be wiped out if the banks were forced to sell those securities to meet demands from depositors who wanted their money back.
That would cause additional bank failures and continue the panic that began in March indefinitely.
We’re not out of the woods, and the confusion will continue.
What’s important to bear in mind is that crises of this type are not over in days or weeks.
A slow-motion rolling panic that takes a year or longer is more typical.
The 1998 crisis reached the acute stage on Sept. 28, 1998, just before the rescue of LTCM. We were hours away from the sequential shutdown of every stock and bond exchange in the world.
But that crisis began in June 1997 with the devaluation of the Thai baht and massive capital flight from Asia and then Russia. It took 15 months to go from a serious crisis to an existential threat.
Likewise, the 2008 crisis reached the acute stage on Sept. 15, 2008, with the bankruptcy filing of Lehman Bros. But that crisis began in the spring of 2007 when HSBC surprised markets with an announcement that mortgage losses had exceeded expectations.
It then continued through the summer of 2007 with the failures of two Bear Steans high-yield mortgage funds, and the closure of a Société Générale money market fund. The panic then caused the failures of Bear Stearns (March 2008), Fannie Mae and Freddie Mac (June 2008) and other institutions before reaching Lehman Bros.
For that matter, the panic continued after Lehman to include AIG, General Electric, the commercial paper market and General Motors before finally subsiding on March 9, 2009. Starting with the HSBC announcement, the subprime mortgage panic and domino effects lasted 24 months from March 2007 to March 2009.
Averaging our two examples (1998, 2008) the average duration of these financial crises is about 20 months. Since this crisis began in March (eight months ago), it could have a long way to run.
In other words, crises can unfold for a long time before they’re finally squashed by massive regulatory intervention.
Get ready for more bank failures.
I’ve written a lot about what I call Biden Bucks. That’s my term for the central bank digital currency (CBDC) the government is currently preparing.
What does the ongoing banking crisis have to do with Biden Bucks? Well, plenty, as it turns out.
Read on to see why…
Bank Runs, Biden Bucks and Money Jail
By Jim Rickards
Whether an account is in CBDC or a regular checking account doesn’t make that much difference. Bank runs today are no different than in the 1930s from a behavioral perspective.
It’s all about lost confidence, fear, not wanting to be the last person out of a burning building, rumors, word of mouth and a host of psychological factors that are part of human nature.
That part hasn’t changed since at least the 14th century with the failure of the Bardi and Peruzzi banks around 1345. What has changed is technology. Marshall McLuhan said in the 1960s that in the global village, everyone knows everything at the same time. He was right. That means when a bank run begins, there’s an immediate reaction.
The difference with the 1930s is that you don’t line up around the corner and wait for the chance to demand cash from the teller. You take out your iPhone, make a few taps and, whether it’s Venmo or a wire transfer, the money is on its way out the door.
Whether you’re a retail depositor with $1,000 or a maven with $8 billion, everyone was online moving money all at once. In that sense, CBDCs don’t matter much. Whether it’s CBDC, Venmo, wire transfer or cash from an ATM, everyone is cashing out at the same time via digital channels. But there is one huge impact of CBDCs that is entirely new and sets them apart from what’s described above…
CBDCs are programmable and controlled by the government.
This means when a run develops, the government can stop the run just by freezing CBDC account transfers. They can even claw back earlier transfers. Since the government controls the CBDC ledger, they can see where the early withdrawals went and simply reinstate them on the account of the failing bank and debit them from the accounts of the transferees. The government can do this with a few keystrokes because they see everything.
This means that once Biden Bucks is implemented, you’re locked into a system controlled by the government. You’re in a money jail.
There’s no point even starting a bank run because the government can track your movements and put the money back where it started. It’s one of many ways that Biden Bucks gives the government total control of your money and can monitor your thoughts and movements.
Cash is likely to be eliminated sooner rather than later in order to pave the way for the dominance of central bank digital currencies. A U.S. dollar CBDC is coming soon. Cash will have to be eliminated to force individuals into the CBDC world. For better or worse, the only way citizens will be able to avoid the mandatory use of CBDCs will be to use gold, silver or cryptocurrencies.
I put comparisons of gold (and silver) and Bitcoin in the same category as comparing fish and bicycles. You can do it, but what’s the point? Gold is money and Bitcoin is a hallucinogen;(or more precisely an acoustic hypnotic spell).
The idea that the U.S. Treasury, Fed and other mainstream monetary institutions are hostile to crypto is absolutely correct. For 10 years they have taken the view that they don’t like it but don’t know what to do about it. Now they know.
The solution is to kill it.
Of course, Bitcoin and other cryptos have their own ecosystem of exchanges, derivatives, custodians, payment channels, tickers, etc., etc. But so what? Cryptos are like chips in a casino.
You can make money or lose money gambling with the chips. But if you walk outside with chips in your pocket, they’re worthless.
You can change tables at the casino but you can’t leave the casino. Chips only have value inside. If you want to spend money outside, you have to visit the cashier first to cash in your chips. The cashier is the portal from the crypto world to the real world of money.
That’s why the FDIC took over Signature Bank on Sunday, March 12, when they shut down Silicon Valley Bank. Signature Bank was no worse off than a lot of other banks. If it had survived until Monday, March 13, it would have been rescued by the Federal Reserve’s Bank Term Funding Program (BTFP) along with the entire U.S. banking system. Why did Signature Bank get whacked under those circumstances?
Signature Bank got whacked because it was offering a portal to the crypto world called Signet. Once the FDIC announced a blanket deposit guarantee and the Fed offered an unlimited ability to swap bonds for cash at par, Signature would have been fine like any other bank.
Yellen used a panicked weekend to wipe out the Signet portal. As Rahm Emanuel said, never let a crisis go to waste. This is one example of how crypto is getting strangled globally. CBDCs are being set up to replace cryptos as a digital currency.
As for gold, you can manipulate the price for short periods of time by dumping gold, painting the tape, acting in concert, etc. But those techniques are not sustainable (unless you want to sell all your gold, in which case you end up with no gold and the market still goes its way).
The London Gold Pool price rigging agreement collapsed in 1968. British Chancellor of the Exchequer Gordon Brown sold almost half of the U.K.’s gold in 1999 at a near 50-year low, a notorious effort at price manipulation known as Brown’s Bottom.
Both are good examples of how manipulation always fails in the end. The government could try a replay of FDR’s gold confiscation from 1933, but it won’t work this time because there’s no trust in the government’s promises.
There are many reasons for this. No one trusts the government today, whereas in 1933 there was a belief that FDR knew what he was doing and was trying to end the Great Depression. COVID is a good example of how people were lied to about vaccines, masks, etc.
The rule today is “Don’t get fooled again.’ No one will surrender their gold except perhaps the people still wearing masks. But they probably don’t have any gold to begin with.
The other reason gold confiscation won’t work is that gold is not fixed in price as it was in 1933. Very few saw the dollar devaluation from $20/oz to $35/oz of gold coming that FDR orchestrated in 1933.
That gold price increase (really a dollar devaluation) wasn’t announced until months after the confiscation. It was the ultimate in insider trading organized by FDR. Informed citizens won’t fall for that a second time.
In a non-pegged market as we have today, the crisis will come first and gold will go to $5,000 or $10,000 per ounce or higher before the government gets around to an attempted confiscation. By that point the damage is done and gold owners have their winnings.
How should everyday Americans evaluate the crisis choice between gold and cryptos as alternatives to the dollar? Ask the following questions:
Can crypto get whacked by governments? Yes. Can gold be manipulated in the long-run? No.
Those questions and answers really answer the bigger question of how to survive the collapse of the dollar.
Gold works. Crypto doesn’t. ‘Nuff said.
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>>> EU proposes payments sector shake-up to boost fintechs
Reuters
by By Huw Jones
June 28, 2023
https://www.msn.com/en-us/money/companies/eu-proposes-payments-sector-shake-up-to-boost-fintechs/ar-AA1d9K9h?OCID=ansmsnnews11
LONDON (Reuters) -The European Union on Wednesday proposed making the payments sector more competitive, giving legal backing to a digital euro, and preserving the role of cash as fewer people use coins and notes.
The package of European Commission reforms seeks to further prise open a payments market long dominated by banks and U.S. duo Visa and Mastercard, which are now being challenged by fintechs that offer rival services using data from customers' bank accounts.
"In practice, this proposal will lead to more innovative financial products and services for users and it will stimulate competition," the Commission said in a statement.
EU states and the European Parliament have the final say on the package, with some changes likely.
The reforms aim to make it harder for banks to stop fintechs from opening an account with them, and give fintechs easier access to customer data and to payments infrastructure.
"We are going to clearly identify the obstacles that the fintechs should never have been encountering," an EU official said.
Electronic payments in the EU have grown from 184.2 trillion euros ($201.7 trillion) in 2017 to 240 trillion euros in 2021, a process accelerated by COVID-19.
Protections on data would be strengthened to encourage consumers to use rival services, with redress for unauthorised transactions such as "spoofing" or fraudsters pretending to be a customer's bank.
To reinforce the sector's collective capacity to tackle scams, the legal basis for banks and other payment firms to share information without breaking data protection rules is also being made clearer, the EU official said.
Fintech company Klarna said traditional banks have undermined existing payments rules to lock customers into poor quality services, and that a proposal to allow banks to charge fintechs for accessing data raised concerns.
The proposal says fees for fintechs to access banking data should be "reasonable".
"There are steps in the right direction when it comes to ensuring fair competition between market participants with a fair distribution of value and risk," the European Banking Federation, a banking industry body, said.
The European Central Bank is due in October to decide whether to push ahead with a digital euro. The separate rules also proposed on Wednesday would make it legal tender, meaning it would have to be accepted as a form of payment.
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Rickards - >>> Yes, It CAN Happen Here
BY JAMES RICKARDS
JUNE 22, 2023
https://dailyreckoning.com/yes-it-can-happen-here/
Yes, It CAN Happen Here
I’ve warned repeatedly about the dangers that central bank digital currencies (CBDCs) pose to personal liberties.
I’ve warned how they would allow governments to monitor every transaction you make, which basically means a surveillance state.
This facilitates the creation of a social credit system that allows governments to punish those who engage in unapproved activity such as buying guns, donating money to the wrong political party, buying unapproved literature, etc.
The government will even know your physical whereabouts at the point of purchase.
People could be denied employment opportunities, educational opportunities, access to banking systems, even the ability to travel.
I’ve also said that China is well along the way to establishing a social credit system. Well, if you have any doubt that China’s social credit score is real, consider this:
Millions of Chinese have been denied the ability to travel by plane or train because their social credit scores are too low.
It CAN Happen Here
If you think nothing like that could ever happen here, you might want to reconsider.
Think of all the draconian policies that were imposed on Americans during COVID. Think of the lockdowns, the censorship, vaccine mandates, etc.
Before the pandemic, you probably wouldn’t have thought that any of this was possible. But it all happened. When you think of it in that light, you begin to understand that some type of social credit system in the U.S. really isn’t that far-fetched.
It might not be as extreme as China’s system. It’ll all be made to sound very benign, even necessary, to support “our democracy” against MAGA types, white supremacists, climate deniers and domestic terrorists.
As Ronald Reagan said, “If fascism ever comes to America, it will come in the name of liberalism.”
But this system would operate on the same principles as the Chinese system. Consider this hypothetical case…
Welcome to the 15-Minute City
Greenies want to mandate “15-minute cities” where you can walk everywhere in town within 15 minutes, which means you won’t need your car to visit a doctor, dry cleaner, grocery store, pharmacy or any of the other locations we routinely visit for errands and necessities.
That may sound attractive if you chose it voluntarily. But that’s not what the greenies have in mind. They want 15-minute cities as a Trojan horse to eliminate automobiles entirely and force you to ride bicycles or use public transportation. In the end, you’ll need a permit to fly to another city.
The permits will be rationed and you’ll have to put yourself on a waiting list until your turn. You can pay for your ticket with the new central bank digital currency, assuming your social credit score is high enough and you didn’t vote for the wrong candidate in the last election.
In this vision, citizens will be confined to small towns or cities for extended periods. Travel will be tightly restricted. Appliances will be downsized with no consumer choice allowed. Taxes will be imposed on targeted activities to discourage use.
Education will be turned to indoctrination to raise a generation who believe in the climate lies needed to gain support for these measures (that kind of indoctrination has been underway for some years).
It’s coercive, restrictive and arrogant. It’s a world where the elites control everything and you do as you’re told. It’s a world based on lies and fear.
Again, if you think that’s just being paranoid, I refer you once more to what happened during the pandemic.
The Censorship-Industrial Complex
We know that the government has engaged in censorship designed to shut down unapproved viewpoints.
Thanks to Elon Musk opening up the Twitter Files to the public, we now know just how rotten and corrupt the White House, FBI and Twitter under Jack Dorsey were in terms of influencing the 2020 election, crushing voices that said the vaccines weren’t really safe and effective (they aren’t) and saying that Russia is winning in Ukraine (they are).
Twitter created a separate portal for FBI goons to target individual Americans and to deplatform them from using Twitter. (Facebook and Google were even worse but they are still under the same control. So we don’t have the internal files we do for Twitter.)
It’s an unconstitutional violation of the First Amendment for the U.S. government to engage in any censorship of this kind.
Instead, the FBI and White House used Twitter as a kind of private-sector hatchet man to cut off anyone who dissented from the government agenda.
Even that may be unconstitutional because Twitter is acting as a proxy for the government in this instance. The courts will ultimately decide that issue, but for now, we know that both the government and Twitter were engaged in rank censorship of everyday American voices.
It can’t get any worse, right? Guess again. We’re now learning that the Twitter-FBI censorship activities went far beyond silencing critics of government policy.
Combine a Social Credit System With a Police State
The FBI also took orders from Ukraine. It turns out the Ukrainian secret security service sent lists of reporters and other U.S. citizens who were not supporting the Zelenskyy regime running the Ukrainian war effort.
The FBI was told to forward the list to Twitter, deactivate the anti-Ukraine accounts and hand over user data to the Ukrainian secret police. I’m active on Twitter and I’m opposed to the war, so for all I know my name was on the list. I don’t care. I’ve always written what I want, and I’m not intimidated by the FBI or the Ukrainian secret police.
Still, many accounts were censored on this basis. No one is surprised to learn Ukraine is a police state. Americans are still learning just how much of a police state the U.S. has become.
Now throw a social credit system into the mix. Just think of the ways the government can punish dissenters.
This is the Brave New World that we’re facing. And it’s all facilitated by central bank digital currencies, which enable the type of surveillance state that’s always been the dream of tyrants.
They’ll just say it’s being done in the name of democracy. Don’t fall for it.
Is this future inevitable? No, it isn’t. But it’s coming sooner than you expect unless citizens join hands, reassert the truth and push the elites back into a corner where they belong.
You might not be able to fight back easily in the world of CBDCs, but as I always say, there is one nondigital, nonhackable, nontraceable form of money you can still get your hands on.
It’s called gold. Get some while you still can.
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Ed Dowd has an interesting take on what's ahead (video below) --
He says that at the depth of the coming recession they will roll out the CBDC, combined with a 'universal basic income' scheme to insure public support for the otherwise unpopular CBDC. At the same time, bank consolidation will also help usher in the CBDC.
Dowd sees a recession starting in Q3-Q4 this year. He points out that the M2 money supply growth yoy has actually dropped 5%, and this hasn't happened since 1930. So liquidity in the system is falling fast. He is actually predicting deflation to begin as early as Q1-24, associated with a lot of economic chaos, and that's when they will introduce the CBDC, during the maximum amount of fear.
He says this is basically the collapse of the monetary system. They know the current system is nearing the end, so they install this new CBDC system on top to maintain control. He says the new CBDC system creates incredible amounts of social control, and it is rolled in while the public is in economic turmoil.
Rickards - >>> “Biden Bucks” and the War on Crypto
BY JAMES RICKARDS
JUNE 13, 2023
https://dailyreckoning.com/biden-bucks-and-the-war-on-crypto/
“Biden Bucks” and the War on Crypto
I’ve written a lot about central bank digital currencies (CBDCs) including the U.S. dollar version that I call “Biden Bucks.” The threat from CBDCs is enormous.
They are digital (but not true cryptocurrencies), which means they are programmable. The Treasury and Fed can use the CBDC ledger to track your purchases, look at your political contributions, look at your religious affiliations and basically profile you as an enemy of the state or “ultra MAGA.”
Your “Biden Bucks” could be made to stop working at the gas pump once you’ve purchased a certain amount of gasoline in a week. How’s that for control?
And in a world of “Biden Bucks,” the government will even know your physical whereabouts at the point of purchase.
But it gets even worse…
CBCD + AI = Nightmare
This profiling can be combined with artificial intelligence (AI) and generative pretrained transformer platforms (GPT) to practically read your mind.
From there, the government can freeze your bank accounts, impose taxes and penalties and put you on a “use it or lose it” fiscal policy stimulus plan that forces you to spend your money within 30 days or have it partially confiscated.
If any of this sounds extreme, fantastical or otherwise far-fetched, it’s not. It’s already happening around the world.
China is already using its CBDC to deny travel and educational opportunities to political dissidents. Canada seized the bank accounts and crypto accounts of nonviolent trucker protesters last winter.
These kinds of “social credit” systems and political suppression will be even easier to conduct when “Biden Bucks” are completely rolled out in the U.S.
The Associated Press actually tried to fact-check me, saying that my claims are false, that the digital dollar has nothing to do with social control. The whole project is completely innocent and you can trust the government.
But even the general manager of the Bank for International Settlements, which is known as the “central bank of central banks,” has admitted that CBDCs would give central banks “absolute control” of everyone’s money — and the “technology to enforce that.”
Even The Economist has announced the rise of government-backed digital currencies, warning they will “shift power from individuals to the state.”
Let’s just say The Economist isn’t known for engaging in conspiracy theories.
No Competition Allowed
And this is central to the CBDC plan: As the CBDC dollar is being implemented, it’s important for the government to take away your alternatives. The three main alternatives are physical cash, gold and cryptocurrencies.
Cash is under attack through multiple channels including “no cash accepted” signs at public events, anti-money laundering rules and simple inflation that might allow you to hold cash, but it won’t be worth very much.
(In 1969, the U.S. abolished the $500 bill, leaving the $100 bill as the highest denomination. The $100 bill of 1969 is only worth $12 in today’s purchasing power because of inflation. Give it time and it won’t be worth much more than a $5 bill.)
And cryptocurrencies are also under full-scale attack. The U.S. Securities and Exchange Commission (SEC) has sued Binance, the world’s biggest cryptocurrency exchange, and its founder Changpeng Zhao, alleging they operated a “web of deception.”
Among the 13 other counts in the lawsuit are allegations that Binance inflated trading volumes, mishandled customer funds and misled investors about market-surveillance controls. Just one day later, the SEC also sued the Coinbase crypto exchange for failure to register as an exchange under U.S. law.
During the wave of bank failures in early March, the FDIC closed Signature Bank, which operated a cryptocurrency portal called Signet in addition to normal banking activities. That came days after the failure of Silvergate Bank, which also bridged the normal banking world to the world of crypto.
None of this is random.
Governments Never Wanted to Kill the Blockchain — Just to Control It
The U.S. has opened a full-scale war on crypto. Silvergate, Signature, Binance and Coinbase are just the first victims. They won’t be the last. Crypto has to go if CBDCs are going to be fully implemented.
Many advocates of Bitcoin and other cryptocurrencies have shared a naïve belief that their digital assets are “beyond the reach of governments,” “cannot be traced” and “cannot be frozen or seized.”
They’ve learned otherwise. Blockchain does not exist in the ether (despite the name of one cryptocurrency) and it does not reside on Mars. Blockchain depends on critical infrastructure including servers, telecommunications networks, the banking system and the power grid, all of which are subject to government control.
As I’ve argued for years, governments don’t want to kill the blockchain upon which cryptos are based. They want to control it.
The fact is governments enjoy a monopoly on money creation and they’re not about to surrender that monopoly to cryptocurrencies.
But governments know they cannot stop the technology platforms on which the cryptocurrencies are based. Blockchain technology has come too far to turn back. That’s why they’re co-opting it.
What Happens if CBDCS Get Hacked?
Here’s one issue with Biden Bucks that hasn’t been adequately addressed: How can you trust them to keep your money secure once you are forced to convert it to a traceable digital currency?
Hackers routinely target crypto architecture and steal money. What happens if that digital currency gets hacked?
This is from a 2022 Federal Reserve paper:
Threats to existing payment services — including operational disruptions and cybersecurity risks — would apply to a CBDC as well. Any dedicated infrastructure for a CBDC would need to be extremely resilient to such threats, and the operators of the CBDC infrastructure would need to remain vigilant as bad actors employ ever more sophisticated methods and tactics. Designing appropriate defenses for CBDC could be particularly difficult because a CBDC network could potentially have more entry points than existing payment services.
This part is truly terrifying. To repeat:
Designing appropriate defenses for CBDC could be particularly difficult because a CBDC network could potentially have more entry points than existing payment services.
If bad actors can already hack crypto platforms with ease, what’s to stop them from hacking a CBDC network with more entry points?
You might not be able to fight back easily in the world of “Biden Bucks,” but there is one nondigital, nonhackable, nontraceable form of money you can still get your hands on.
It’s called gold. Get some before it’s too late.
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Rickards says that Signature Bank was deliberately taken down because of their crypto portal -
Excerpt -
>>> ...That’s why the FDIC took over Signature Bank on Sunday, March 12, when they shut down Silicon Valley Bank. Signature Bank was no worse off than a lot of other banks. If it had survived until Monday, March 13, it would have been rescued by the Federal Reserve’s Bank Term Funding Program (BTFP) along with the entire U.S. banking system. Why did Signature Bank get whacked under those circumstances?
Signature Bank got whacked because it was offering a portal to the crypto world called Signet. Once the FDIC announced a blanket deposit guarantee and the Fed offered an unlimited ability to swap bonds for cash at par, Signature would have been fine like any other bank.
Yellen just used a panicked weekend to wipe out the Signet portal. As Rahm Emanuel said, never let a crisis go to waste. This is one example of how crypto is getting strangled globally. CBDCs are being set up to replace cryptos as a digital currency....
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https://dailyreckoning.com/another-zombie-bites-the-dust/
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>>> Emmer Leads Effort to Squash Financial Surveillance State Initiatives
February 23, 2023
https://emmer.house.gov/2023/2/emmer-leads-effort-to-squash-financial-surveillance-state-initiatives
Washington, D.C. – This week, Majority Whip Tom Emmer (MN-06) introduced the CBDC Anti-Surveillance State Act to halt efforts of unelected bureaucrats in Washington, D.C. from issuing a central bank digital currency (CBDC) that strips Americans of their right to financial privacy.
The bill also holds the Federal Reserve’s CBDC research and development programs accountable to the American people. The bill was co-sponsored by Republican colleagues Representatives French Hill (AR-02), Warren Davidson (OH-08), Mike Flood (NE-01), Byron Donalds (FL-19), Pete Sessions (TX-32), Andy Biggs (AR-05), Young Kim (CA-40), Ralph Norman (SC-05) and Barry Loudermilk (GA-11).
“Any digital version of the dollar must uphold our American values of privacy, individual sovereignty and free market competitiveness,” Emmer said. “Anything less opens the door to the development of a dangerous surveillance tool.”
“After all, America remains a technological leader not because we force innovations to adopt our values under regulatory duress, but because we allow technology that holds these values at their core to flourish,” concluded Emmer.
Rep. Hill said, “As Chairman of the Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion, it is my top priority to protect people’s privacy and their data. When it comes to consideration and design of any possible U.S. Central Bank Digital Currency (CBDC), the federal government cannot and does not have the authority to issue a CBDC directly to individuals without explicit Congressional approval. I am proud to co-sponsor the CBDC Anti-Surveillance State Act, led by my colleague, Whip Emmer, which will protect the financial privacy of individuals, their civil liberties, and stop efforts of federal overreach to surveil Americans.”
“The Fed must focus on its dual mandate rather than eradicating financial autonomy. A retail CBDC would essentially allow the government to mediate all transactions, which would mirror what we see in China. It’s vital to ensure this does not happen here,” said Rep. Davidson.
Rep. Flood said, “In a digital age, cryptocurrency represents new economic opportunities for America – but it’s critical for private sector innovators to take the lead. The American dollar has long been a symbol of prosperity and freedom, and our digital currencies should be the same. The Chinese Communist Party’s move to use government-run digital currency to impose further control on its people and its economy is a cautionary tale that America must avoid. The CBDC Anti-Surveillance State Act is a key step towards ensuring that Americans maintain their financial freedom by prohibiting a centrally controlled digital currency as our economy continues to innovate in the area of digital assets.”
Rep. Donalds said, “As the Federal Reserve continues its study of central bank digital currencies, one thing has become clear – CBDCs pose a clear threat to Americans’ financial independence. Rather than following the lead of oppressive regimes like China and Russia, we should dramatically decrease the federal government’s involvement in personal finances and look to the free market to guide the way regarding innovation. That’s why I’m proud to support Congressman Emmer’s CBDC Anti-Surveillance State Act which prevents the issuance of a retail CBDC and ensures the Fed stays within its statutory bounds.”
“The U.S. Government cannot move to issue a digital dollar without an Act of Congress, and before that happens, Congress must first be completely certain a digital dollar can never be used as a surveillance tool. That’s why I’m an original co-sponsor of Whip Emmer’s bill,” said Congressman Pete Sessions. “I am also very concerned that a digital dollar would fundamentally reshape the banking industry to the detriment of consumers and the economy, therefore Congress must fully consider the negative and unintended consequences that could result from issuing a digital dollar, which I look forward to working on with Whip Emmer together on these very important issues in the House Financial Services Committee.”
“I applaud Congressman Emmer’s latest efforts to protect the financial privacy and currency of millions of Americans,” said Congressman Andy Biggs. “A government run digital currency presents a real threat to Americans’ freedom to use their hard-earned money, and fundamentally, to the value of that money – Emmer’s bill ends this threat before it can begin.
“From Big Tech censorship to COVID mandates to now regulating digital currencies, unelected bureaucrats continue to push our nation toward an authoritarian state. This rogue behavior must stop and this legislation gets us closer to achieving that,” Biggs concluded.
“One of my primary concerns with the federal government is its constant push to expand the way it invades and collects information on the American people; and the Federal Reserve’s push to develop a central bank digital currency would allow the Fed to track an individual’s transactions indefinitely. Given the economic uncertainty many Americans are facing, the Federal Reserve should be focused on its core mission of keeping prices stable and ensuring maximum employment, not exploring digital currencies, without congressional input or approval,” said Rep. Loudermilk.
"Innovation is the key to unlocking America's economic future," said Rep. Kim. "I'm proud to join Whip Emmer to introduce the CBDC Anti-Surveillance State Act to prohibit the Federal Reserve from offering central bank digital currency directly to individuals, allowing the federal government to monitor everyday financial transactions. I'll keep working to promote financial freedom and economic empowerment for all Americans."
Rep. Norman said, “We have enough problems with abusive government surveillance without the Federal Reserve becoming an instrument to possibly monitor and scrutinize individual account holders and their transactions. CBDC would create significant privacy concerns for Americans, so I want to thank Rep. Emmer for his leadership on this important legislation.”
Specifically, the legislation prohibits the Federal Reserve from issuing a CBDC directly to an individual, mobilizing itself into a retail bank able to collect personal information on all Americans. The bill also bars the Federal Reserve from using any CBDC to implement monetary policy, ensuring the Federal Reserve cannot use a CBDC as a tool to control the economy. Additionally, it requires that the Federal Reserve Board of Governors consult each Federal Reserve bank about the development of a CBDC study or pilot program and issue a quarterly report to Congress on their progress and findings. The federal government must be held accountable to the American people.
Background
Emmer has been a longtime advocate that any Fed-issued digital dollar (central bank digital currency) remain open, permissionless and private. The CBDC Anti-Surveillance State Act expands upon Emmer’s bill from the 117th Congress, which would have also prohibited the Fed’s direct issuance of a CBDC to individuals. More information about that bill is available here.
Additionally, in December, Emmer led a letter with House Financial Service Committee Chairman Patrick McHenry (NC-10) seeking transparency from the Boston Fed on Project Hamilton on the private sector’s role in the project. Project Hamilton is an initiative between the Boston Fed and MIT to research the potential development of a U.S. CBDC and the private sector's role must be transparent. No government body should be in the business of picking winners and losers in private industry. Additional information about this effort can be found here.
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>>> Federal Reserve announces July launch for the FedNow Service
March 15, 2023
https://www.federalreserve.gov/newsevents/pressreleases/other20230315a.htm
The Service will Debut with Financial Institutions and the U.S. Treasury on Board
CHICAGO – The Federal Reserve announced that the FedNow Service will start operating in July and provided details on preparations for launch.
The first week of April, the Federal Reserve will begin the formal certification of participants for launch of the service. Early adopters will complete a customer testing and certification program, informed by feedback from the FedNow Pilot Program, to prepare for sending live transactions through the system.
Certification encompasses a comprehensive testing curriculum with defined expectations for operational readiness and network experience. In June, the Federal Reserve and certified participants will conduct production validation activities to confirm readiness for the July launch.
"We couldn't be more excited about the forthcoming FedNow launch, which will enable every participating financial institution, the smallest to the largest and from all corners of the country, to offer a modern instant payment solution," said Ken Montgomery, first vice president of the Federal Reserve Bank of Boston and FedNow program executive. "With the launch drawing near, we urge financial institutions and their industry partners to move full steam ahead with preparations to join the FedNow Service."
Many early adopters have declared their intent to begin using the service in July, including a diverse mix of financial institutions of all sizes, the largest processors, and the U.S. Treasury.
In addition to preparing early adopters for the July launch, the Federal Reserve continues to engage a range of financial institutions and service providers to complete the testing and certification program and implement the service throughout 2023 and beyond. Montgomery noted that availability of the service is just the beginning, and growing the network of participating financial institutions will be key to increasing the availability of instant payments for consumers and businesses across the country.
The FedNow Service will launch with a robust set of core clearing and settlement functionality and value-added features. More features and enhancements will be added in future releases to continue supporting safety, resiliency and innovation in the industry as the FedNow network expands in the coming years.
"With the FedNow Service, the Federal Reserve is creating a leading-edge payments system that is resilient, adaptive, and accessible," said Tom Barkin, president of the Federal Reserve Bank of Richmond and FedNow Program executive sponsor. "The launch reflects an important milestone in the journey to help financial institutions serve customer needs for instant payments to better support nearly every aspect of our economy."
About the FedNow Service
The Federal Reserve Banks are developing the FedNow Service to facilitate nationwide reach of instant payment services by financial institutions — regardless of size or geographic location — around the clock, every day of the year. Through financial institutions participating in the FedNow Service, businesses and individuals will be able to send and receive instant payments at any time of day, and recipients will have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments. Access will be provided through the Federal Reserve's FedLine® network, which serves more than 10,000 financial institutions directly or through their agents. For more information, visit FedNowExplorer.org.
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Current banking crisis -- It wouldn't be surprising to see the ongoing narrative steered toward the idea that CBDCs are needed to improve / stabilize the financial system. Elon Musk's recent cryptic comment might be headed in that direction (article excerpt below).
They have already floated the dubious idea that the CBDC will help maintain the dollar's position as the world's reserve currency, so we can expect more positive spin on the amazing curative powers of the CBDC. The Fed's instant payment service 'FedNow' is set to begin in early April, with the full rollout starting in July. So we can expect the CBDC and its FedNow plumbing to be praised to the heavens by the media, and seen as a glorious alternative to those unreliable and shaky 'banks'. With CBDC / FedNow, the banks are bypassed, and everything goes directly through the Federal Reserve -
>>> 'Inefficiency of Resource Allocation Databases':
These measures have so far failed to restore calm. Experts are divided.
One solution circulating is for the FDIC to guarantee all deposits in U.S. banks. For entrepreneur Elon Musk, the failure of the extraordinary measures that have been announced is proof that the current financial system is inefficient. Or so the CEO of Tesla indicated in a thread on Twitter.
"The inefficiency of the set of heterogeneous resource allocation databases we call money is astounding," he said in a cryptic message on March 17.
Musk doesn't say what an efficient system would look like. He might mean that it would probably be easier to have a central entity where customers can deposit and withdraw money, rather than a system with multiple entry and exit points. The more points of entry and exit you have, the greater the risk of failure, he might suggest. <<<
https://www.thestreet.com/banking/elon-musk-sends-cryptic-message-about-the-banking-crisis?puc=yahoo&cm_ven=YAHOO
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>>> Federal Reserve to launch instant payment service 'FedNow' in July
Yahoo Finance
Jennifer Schonberger
March 15, 2023
https://finance.yahoo.com/news/federal-reserve-to-launch-instant-payment-service-fednow-in-july-210022218.html
The Federal Reserve said Wednesday it will launch its long-awaited instant payment service FedNow in July.
The instant payment network will settle payments in seconds, with the capability to support consumer-to-consumer, consumer-to-merchant, merchant-to-merchant, and bank-to-bank transactions.
"With the FedNow Service, the Federal Reserve is creating a leading-edge payments system that is resilient, adaptive, and accessible," said Tom Barkin, president of the Federal Reserve Bank of Richmond and the FedNow Program's executive sponsor.
"The launch reflects an important milestone in the journey to help financial institutions serve customer needs for instant payments to better support nearly every aspect of our economy."
According to the Fed, a mix of banks of all sizes, including the largest processors and the U.S. Treasury, are on board. The central bank is continuing to speak with financial institutions and service providers to test the program ahead of its implementation.
"With the launch drawing near, we urge financial institutions and their industry partners to move full steam ahead with preparations to join the FedNow Service," said Ken Montgomery, first vice president of the Federal Reserve Bank of Boston and FedNow program executive.
Montgomery noted availability of the service is just the beginning, and growing the network of participating financial institutions will be key to increasing the availability of instant payments for consumers and businesses across the country.
Starting in the first week of April, the Fed will begin formally certifying banks to launch the service. Early adopters will have to conduct customer testing, informed by feedback from the FedNow Pilot Program, to prepare for sending live transactions through the system.
The Fed maintains making funds immediately available will help Americans living paycheck to paycheck or small businesses with cash flow constraints by avoiding late payment fees and freeing up working capital to finance growth.
Analysts say FedNow could also cut demand for payday loans as consumers won't have to wait for a check to clear. For businesses, there could also be upside for better paying suppliers on time, and businesses could embrace it as a less costly, and more certain, way to accept consumer payments.
Fed Governor Michelle Bowman said last year that FedNow, which will enable consumers and businesses to send payments instantly, could offer some of the same benefits as a central bank digital currency.
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>>> NY Fed Launches Digital Dollar Pilot Program With Big Banks
Investopedia
By RAHUL NAMBIAMPURATH
November 16, 2022
https://www.investopedia.com/ny-fed-works-on-cbdc-6829573
Nine U.S. financial institutions, including Citibank, Wells Fargo, and Mastercard launched a pilot program working with the Federal Reserve Bank of New York to test the feasibility of a digital dollar based on distributed ledger technology.
KEY TAKEAWAYS
Several U.S. financial institutions are collaborating to test the feasibility of a digital dollar based on distributed ledger technology.
Participants include BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank, and Wells Fargo. The New York Innovation Center, part of the New York Fed, is also involved.
The pilot will run for 12 weeks in a test environment and will involve central banks, commercial banks, and regulated non-banks.
Pilot to Use Distributed-Ledger Tech
The project is the most significant step to date in creating a digital dollar to improve financial settlements. The Biden administration has recommended the creation of a digital dollar and the U.S. has recently begun putting resources into the effort. Other countries are also exploring plans to create their own central bank digital currencies (CBDCs).
The proof-of-concept project is a 12-week effort that will test the feasibility of an interoperable digital money platform called the regulated liability network (RLN).
It will use a distributed ledger—like the blockchain technology behind bitcoin. The goal is to improve financial settlements and will involve central banks, commercial banks, and regulated non-banks.
The U.S. dollar will be represented as tokens and settled through simulated central bank reserves on a shared multi-entity distributed ledger. The pilot will be conducted in a test environment and will use a technology provided by SETL and Digital Asset.
The list of participants in the pilot program includes BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank, and Wells Fargo. Global payments provider Swift is also participating in the effort, along with the New York Innovation Center (NYIC), part of the Federal Reserve Bank of New York.
China Tests Digital Yuan
Other countries have made headway in digital currency development, most notably China. China has tested its digital yuan in several provinces, and the currency is even available to users on the popular app WeChat.
It recently added four provinces to its list of regions for the CBDC trial.
Nigeria also has launched a digital currency, the eNaira.
Central Bank of Nigeria (CBN) Governor Godwin Emefiele said it was responsible for more than $9 million in transactions in the past month.
Earlier this month, France, Switzerland, and Singapore jointly conducted a trial for their digital currencies, one of the first of its kind.
These cross-border trials are also an important agenda in CBDC development.
The Bottom Line
With the White House recommending the creation of a digital dollar, a major announcement could come as early as next year. Major economies like India are also considering adopting CBDCs. The efforts so far are mainly cautious pilot programs. At the same time, regulators around the world are looking at the regulation of cryptocurrencies.
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CBDCs - >>> As many as 87 countries are exploring a central bank digital currency
Yahoo Finance
January 4, 2022
https://finance.yahoo.com/video/crypto-many-87-countries-exploring-172617285.html
AKIKO FUJITA: Well, China has now released a pilot version of its digital Yuan wallet app for Android and iOS, as the country's central bank moves aggressively to develop its own digital currency. The PBOC though, certainly not the only central bank that's looking to roll out their CBDC.
Let's bring in Emily Parker, CoinDesk global macro editor and CoinDesk TV anchor. Emily, I just threw in a lot of acronyms in there. But we're talking about central bank digital currencies. And dozens of countries, I mean nearly 100, now working on this.
EMILY PARKER: Absolutely. So as you mentioned, China has grabbed a lot of the headlines for taking the lead in developing a central bank digital currency. But we're seeing more and more countries getting involved. So I think, according to the Atlantic Council, which has a very cool CBDC tracker, there are something like 87 countries that are developing, or exploring rather, exploring a central bank digital currency.
And the latest, we've learned, is Mexico, which has announced that they plan to issue a CBDC within the next two years. So Mexico is joining other countries in the region, such as Peru and Brazil, who are actively exploring this. So this is something that's going on all over the world.
And if we look at those 87 countries, again according to the Atlantic Council, that accounts for over 90% of global GDP, the countries that are exploring developing this central bank digital currency. So it's definitely, definitely not just China.
ZACK GUZMAN: Yeah, although a lot of the attention has been on China, given kind of what's going to play out at the Olympics and kind of the buildup to unveiling that one. And of course, there's the big overhang and big question of whether or not anyone who's actually crypto-savvy is going to want to use any of these, or if they might beat out other stablecoins in terms of being the rails that we see used in terms of large institutions.
But when we look at maybe the other big story to watch in 2022, certainly a big one in '21, the rise of NFTs. And now in Korea, we're seeing it used politically, not just for the tech-savvy anymore. I mean, how big is that in terms of bringing on new entrants to the space?
EMILY PARKER: So CBDCs and the news item that you just mentioned are all part of a larger story, which is that cryptocurrencies in theory are supposed to be independent of governments. But what we're seeing now is just a lot of governments trying to get in on the action in some way, either by launching a central bank digital currency or, in the case of Korea, we have the ruling political party now saying that they will basically be giving NFTs in return for political donations.
And clearly what this is is it's a play for younger voters, voters in their 20s and 30s. But this is also an acknowledgment by the Korean government that crypto isn't going anywhere. And if they want to get traction with younger voters, they're going to have to play along.
ZACK GUZMAN: Yeah, I mean, that's the biggest thing too. I think we had, of course, the president of El Salvador labeling Bitcoin, and I guess stances on crypto, a major theme to watch in 2022. Of course, we have the midterms coming up.
I tend to agree with that. I think that it's something that we've seen Republicans and Democrats really start to align on on different sides now, although some of them are conflicting. I mean, how important do you think it is going to be for maybe politicians back here in the US to also-- I don't know if it's important for them to really utilize NFTs to fundraise or whatnot. But how important is it to really start setting, I guess, their stances on these things ahead of those elections?
EMILY PARKER: Yeah, I mean, 2021 was the year that Washington really woke up to crypto. And we're just going to see that trend continuing into 2022. So we're going to see lawmakers in Washington.
What they're going to have to do is learn more about crypto and how crypto works because there are a lot of regulatory actions that are being suggested out there. They're going to have to understand what those are. Whether or not they're going to start issuing NFTs is another question. But I do think we're just going to at least see an attempt to be more educated about crypto in Washington, which I think is a good thing for the industry.
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BIS / CBDC - >>> Crypto fears now materialising, central bank body BIS says
Reuters
June 21, 2022
By Marc Jones
https://www.reuters.com/business/finance/crypto-fears-now-materialising-central-bank-body-bis-says-2022-06-21/
LONDON, June 21 (Reuters) - Recent implosions in the cryptocurrency markets indicate that long-warned-about dangers of decentralised digital money are now materialising, the Bank for International Settlements has said.
The BIS, the global umbrella body for central banks, sounded the warning in an upcoming annual report, in which it also urged more effort in developing appealing central bank digital currencies.
BIS general manager Agustin Carstens pointed to recent collapses of the TerraUSD and luna 'stablecoins', and a 70% slump in bitcoin, the bellwether for the crypto market, as indicators that a structural problem exists.
Without a government-backed authority that can use reserves funded by taxes, any form of money ultimately lacks credibility."
"I think all these weaknesses that were pointed out before have pretty much materialised," Carstens told Reuters. "You just cannot defy gravity... At some point you really have to face the music".
Analysts estimate that the overall value of the crypto market has slumped more that $2 trillion since November as its troubles have snowballed. read more
Carstens said the meltdown was not expected to cause a systemic crisis in the way that bad loans triggered the global financial crash. But he stressed losses would be sizeable and that the opaque nature of the crypto universe fed uncertainty.
"Based on what we know, it should be quite manageable," Carstens said. "But, there are a lot of things that we don't know."
CENTRAL BANK DIGITAL CURRENCIES (CBDCs)
The BIS is a long-term sceptic of cryptocurrencies and its report laid its vision for the future monetary system - one where central banks utilise the tech benefits of bitcoin and its ilk to create digital versions of their own currencies.
Roughly 90% of monetary authorities are now exploring CBDCs as they are known. Many hope it will equip them for the online world and fend off cryptocurrencies. But the BIS wants to coordinate key issues such as making sure they work across borders.
The immediate challenges are mainly technological, similar to how the mobile phone world needed standardised coding in the 1990s. But there is also the geopolitical issue as relations between the West and countries such as China and Russia wane.
"This (interoperability) is a topic that has been on the G20 agenda for quite some time.. so I think there is a good chance for this to move forward," Carstens said, adding how there had been a number of "real-life" trials with different CBDCs over the last year.
Asked how long before international standards for CBDC interoperability might be agreed, he said: "I think in the next couple of years. Probably 12 months is too short."
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>>> Yes, “Biden Bucks” Are Real
BY JAMES RICKARDS
OCTOBER 21, 2022
https://dailyreckoning.com/yes-biden-bucks-are-real/
Yes, “Biden Bucks” Are Real
I told my readers several weeks ago about how Joe Biden and the Fed’s plan to develop the digital dollar is moving from the research stage to the development stage.
Well, the Biden administration has recently released the first-ever framework for developing a U.S. central bank digital currency (CBDC) system. In other words, “Biden Bucks” is getting closer to becoming a reality for us all.
(I like to call them “Biden Bucks” because I want him to take full credit for what I consider to be a crime.)
Essentially, I believe the U.S. dollar, the standard of the world since 1792, will be replaced by a new currency, the digital dollar. It’ll also have the full backing of the Federal Reserve.
What’s this mean for you? I’ve argued it before but I can’t say it enough…
It would basically subject your money to government control. “Biden Bucks” would create new ways for the government to control how much you could buy of an item, or even restrict purchases altogether. That’s because the government would keep score of every financial decision you made.
Nowhere to Hide
Imagine if the government decides that gasoline needs to be rationed to further advance the climate change agenda?
Your “Biden Bucks” could be made to stop working at the gas pump once you’ve purchased a certain amount of gasoline in a week. How’s that for control?
And in a world of “Biden Bucks,” the government will even know your physical whereabouts at the point of purchase. Also, if you give donations to the wrong political party or make purchases the government doesn’t like, maybe the IRS will take a sudden interest in you.
Who wants to be subjected to an IRS audit?
If any of this sounds extreme, fantastical or otherwise far-fetched, it’s not. It’s already happening around the world.
China is already using its CBDC to deny travel and educational opportunities to political dissidents. Canada seized the bank accounts and crypto accounts of nonviolent trucker protesters last winter.
These kinds of “social credit” systems and political suppression will be even easier to conduct when “Biden Bucks” are completely rolled out in the U.S. In fact, it’s already starting. If you have a PayPal account, you can see that I was not exaggerating.
Misinformation — or Facts?
On Oct. 8, PayPal released an update to its user agreement that included a clause allowing PayPal to fine its users $2,500 for using the service to spread “misinformation.” PayPal quickly retracted the update and said the misinformation clause had been included in error (isn’t it always?).
In truth, this was nothing but a foreshadowing of life under central bank digital currencies.
They want to surveil us all and take our money for holding the wrong views. China has shown the world that it can control the whole population this way. PayPal was designated to be the test case.
The management at PayPal considers misinformation to be anything they disagree with even if facts and science are on your side. Well, here are some facts…
The COVID vaccines are not real vaccines; they are experimental gene-modification therapies that do not stop you from getting infected and do not stop the spread if you do get infected.
Masks don’t work because the SARS-CoV-2 virus (that causes COVID) is only 1/5,000th the size of the weave. The virus goes right through the mask.
There is no climate emergency. There is evidence that the 2020 presidential election involved extensive irregularities, including cheating.
A Test Run for Biden Bucks
Those are all facts. But if you say them, PayPal treats them as misinformation and threatens your account balance. PayPal’s terms of service show that providing “false, inaccurate or misleading information” is still on the list of prohibitions in their Terms of Service.
Misleading according to whom? Not only does PayPal threaten free speech, but they also lie about the threat when challenged. If PayPal can punish its users for speaking their minds, who is to say that the government can’t do the same thing?
I believe that the PayPal announcement was a test run of a new system of financial surveillance that could be woven into a central bank digital currency.
That in turn could be deployed to copy China’s social credit system of political surveillance and control.
The government can’t be trusted to do much of anything correctly. How can you trust them to keep your money secure once you are forced to convert it to a traceable digital currency? What happens if that digital currency gets hacked?
The government certainly isn’t going to bail you out like it did with the elites in the banking and auto industries.
Safe and Secure? Really?
Hackers recently stole around $160 million worth of cryptocurrency from crypto market maker Wintermute. This incident is only the most recent in a long-growing list of large crypto thefts so far this year.
In June of this year, hackers looted about $100 million from a so-called cryptocurrency bridge, again exposing a key vulnerability in the digital-asset ecosystem.
According to a recent article from CNN, “In the first seven months of 2022, a staggering $1.9 billion worth of cryptocurrency was stolen in hacks of various services, marking a 60% increase from the same period in the year prior, according to a report released from blockchain analysis firm Chainalysis last month.”
Meanwhile, a Federal Reserve paper from January 2022 stated:
Threats to existing payment services — including operational disruptions and cybersecurity risks — would apply to a CBDC as well. Any dedicated infrastructure for a CBDC would need to be extremely resilient to such threats, and the operators of the CBDC infrastructure would need to remain vigilant as bad actors employ ever more sophisticated methods and tactics. Designing appropriate defenses for CBDC could be particularly difficult because a CBDC network could potentially have more entry points than existing payment services.
This part is truly terrifying:
Designing appropriate defenses for CBDC could be particularly difficult because a CBDC network could potentially have more entry points than existing payment services.
If bad actors can already hack crypto platforms with ease, what’s to stop them from hacking a CBDC network with more entry points?
What could this mean for you and your life savings? How can you protect your finances from being hacked by bad actors?
Fact-Checking the Fact-Checkers
The Associated Press recently tried to fact-check me, saying that my claims are false, that the digital dollar has nothing to do with social control or the elimination of cash. The whole project is completely innocent and you can trust the government.
Yeah, OK. And I’ve got a bridge in Brooklyn to sell you!
Even the general manager of the Bank for International Settlements, which is known as the “central bank of central banks,” has admitted that CBDCs would give central banks “absolute control” of everyone’s money — and the “technology to enforce that.”
Who should you pay more attention to, some hack with the mainstream media who really has no idea what he’s talking about, or a true banking insider who knows exactly how the system would work?
Even The Economist has announced the rise of government-backed digital currencies, warning they will “shift power from individuals to the state.”
The Economist isn’t known for engaging in conspiracy theories.
You might not be able to fight back easily in the world of “Biden Bucks,” but there is one nondigital, nonhackable, nontraceable form of money you can still get your hands on.
It’s called gold.
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>>> Jim Rickards Was Right -
BY JAMES RICKARDS
NOVEMBER 17, 2022
https://dailyreckoning.com/jim-rickards-was-right/
Jim Rickards Was Right
I’ve been warning about a central bank digital currency (CBDC) for a long time — or as I like to call it, “Biden Bucks.”
That’s because Biden fast-tracked its development. He’s been responsible for implementing CBDCs at a very quick tempo in the U.S.
They could actually end up as his most enduring legacy, believe it or not.
“Respectable” economists and financial commentators derided me as a conspiracy theorist and kook for talking about it..
Well, it looks like I was right after all. A U.S. central bank digital currency is not a plan anymore — it’s here. It’s now gone from what I would call the research phase to an implementation phase.
The Mainstream Media Confirm Biden Bucks
But don’t take it from me, take it from the mainstream media. Here’s Reuters:
Global banking giants are starting a 12-week digital dollar pilot with the Federal Reserve Bank of New York, the participants announced on Tuesday.
Citigroup Inc., HSBC Holdings Plc, Mastercard Inc. and Wells Fargo & Co. are among the financial companies participating in the experiment alongside the New York Fed’s Innovation Center, they said in a statement. The project, which is called the Regulated Liability Network, will be conducted in a test environment and use simulated data, the New York Fed said. The pilot will test how banks using digital dollar tokens in a common database can help speed up payments.
This might be just a pilot program, but you can bet that the real McCoy will be here before you know it. They just have to work out the kinks and whatever plumbing issues they run into before rolling out the finished version.
It’s just a matter of time.
What’s the Big Deal?
Here’s what you need to know, in a nutshell: The U.S. dollar will be replaced by a new currency, the digital dollar, with the full backing of the Federal Reserve.
Well, what’s the big deal? many will argue. It’ll just simplify the payment system and make it more efficient. It’ll be much more convenient than the convoluted system we have today. And they’re actually right about that. A digital dollar will be simpler, more efficient and more convenient to use.
Assume you buy gasoline at your local gas station (hopefully not diesel — have you seen diesel prices recently?).
You pay with a credit card, which begins a payment process involving maybe five separate parties.
These include the merchant from whom you bought the gas, the credit card company, the bank and an intermediary called a merchant acquirer (no need to explain what a merchant acquirer does for today’s purposes, but just realize that it’s part of the payment system).
Ultimately the bank that issues your credit card sends you a bill, which you pay. You also pay a fee, maybe 3%, all to buy the gas.
Eliminating the Middleman
But with a central bank digital currency, you could simply pay for the gas with an account you have at the Fed.
You would get rid of all the middlemen. You could bypass the merchant acquirer, the banks and the credit card company. A digital dollar would also eliminate many of the fees we currently face.
So yes, the payment system will be faster, cheaper, easier, more streamlined and more secure. What’s not to like as far as you’re concerned?
And that’s exactly how they’ll sell the new digital dollar system to the public. Here’s what they won’t tell you, as I’ve argued over and over again…
The digital dollar — again, what I call Biden Bucks — would basically end privacy as we know it.
Bye, Bye, Privacy
Every purchase you make would be tracked by the government, including purchases they don’t like.
Biden Bucks would create new ways for the government to control how much you could buy of an item, or even restrict purchases altogether.
What if you’re in a bookstore and buy a book written by Donald Trump or a book by some author who supports Trump, Ron DeSantis, Rand Paul or any of Biden’s political enemies?
With the digital dollar they can tag you and potentially label you a domestic terrorist or some such. And what if you make a political contribution to a candidate the administration doesn’t like?
Well, now you could really be in trouble. You bought a pro-Trump book. You gave money to a pro-Trump political candidate. You’re on a list. And they know this because of the payment system.
And if you buy a gun? Now you’re a real threat.
Who Needs FBI Agents When They’ve Got Biden Bucks?
That’s the point of it all. Obviously, they can have an FBI agent follow you around and see what you bought at the book counter or at the gun show, but they don’t have enough FBI agents for that. But if they’re using central bank digital currencies in an account that identifies you, then they can pigeonhole you.
Remember these 87,000 IRS agents they want to hire? Well, maybe your name will pop up on one of their lists, just by chance of course, and they’ll audit you. We’ve already seen how the IRS can be used to target political opponents. Does the name Lois Lerner ring a bell?
Imagine that type of abuse on a massive scale, all because the government can use Biden Bucks to track your every purchase. But before they can truly implement Biden Bucks the way they want, they need to eliminate cash.
Getting Rid of the Competition
If you didn’t like the central bank digital currency system for privacy reasons, you might say, “Wait, I feel like I’m under surveillance here. This is intrusive. I just don’t trust this thing. Where’s my alternative?”
Let’s go back to your theoretical purchase of gasoline at the local station. Particularly if they eliminate the traditional credit card payment system, you might buy your gas with cash. But if you’re the government and you want the central bank digital currency to succeed, you have to eliminate cash because it’s your competition.
The government hates cash because it’s not traceable. If you buy the gas with cash, they can’t track you. They can’t put you under surveillance with cash.
Yes, I realize that sounds like a conspiracy theory to some. That’s fine. But more and more these days, conspiracy theories have a funny way of becoming fact a short time later.
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