- HI THERE DENIZENS, AND WELCOME BACK!
- SO, LET'S Continue our discussion about CBDC's
- WHY SHOULD IT MATTER?
- The Clown Car
- Imagine…
- Enter the CBDC
- West Texas Intermediate Spot Oil Prices vs. S&P 500 Index- As noted by Authur hayes
- The categories of the various types of CBDC's
- The Trend
- Out Of business
- A Banks greatest threat.
- The Cure
- Outlook and final thoughts;
- Frequently Asked Questions.
- Refferences
HI THERE DENIZENS, AND WELCOME BACK!
- HI THERE DENIZENS, AND WELCOME BACK!
- SO, LET'S Continue our discussion about CBDC's
- WHY SHOULD IT MATTER?
- The Clown Car
- Imagine…
- Enter the CBDC
- West Texas Intermediate Spot Oil Prices vs. S&P 500 Index- As noted by Authur hayes
- The categories of the various types of CBDC's
- The Trend
- Out Of business
- A Banks greatest threat.
- The Cure
- Outlook and final thoughts;
- Frequently Asked Questions.
- Refferences
SO, LET'S Continue our discussion about CBDC's
The Decentralist issue 1: Sinister ; How do CBDC’s manifest limitless corruption?
The yoke of oppression made possible by the advent of CBDC’s will end the world as we know it.
The only reason why our global monetary system works at all is because we’ve granted central banks the authority to manipulate money while forsaking our own. Now a CBDC is simply us saying to the central authorities, institutions, governments, and banks; “you’re not manipulating money enough, we need you to manipulate it more”. Crazy
From the perspective of “We the people”, or those who are governed, CBDC are pure evil. Why? Because they centralize power within the government and the commercial banks chartered by that government. This centralization of power leads to greater control over the lives of the people governed.
With CBDCs, the government and commercial banks would have complete control over the money supply and could manipulate it for their own benefit. This would be disastrous for the economy and would lead to higher prices, wage stagnation, and job losses. In addition, CBDCs would also make it easier for the government to track financial transactions and crack down on dissent.
As a result, CBDCs would be a tool of oppression, used by the government to control its citizens. From the perspective of those who are governed, CBDCs are pure evil.
WHY SHOULD IT MATTER?
“Roses are Red, Violets are Blue, Inflation is theft and Taxes are too”-Robert Breedlove
The Clown Car
We are in the end game of fiat money and The Fed has lost its mind. They had 50 years to make it work and blew it on transitory inflation. They printed way too much money and they know it. Now inflation is running as hot as the sun and they’re scared. They’ve become the compulsive gambler at the casino at 2 am on a Tuesday. They’ve lost it all and are now making increasingly stupid moves.
It’s literally just math. It’s unbelievable that so many remain unaware of what’s unfolding.
The global debt burden is unserviceable. It’s a Ponzi in the purest sense. Meanwhile, a scarce, decentralized, digital asset is monetizing in real-time… Mathematically, there is no solution to the global debt burden except currency debasement.
#Bitcoin is an engineering solution purpose-built for an age where trust is lost in monetary authorities. This is an issue of great importance because the nature of the inflation to come is going to be distinctly different from the inflation that we have become inured to over the last 50 years
Governments have now become the clown car bouncing off the rails of inflation and deflation. They’ve fallen asleep and hit the inflationary rail. Now they’ve slammed on the brakes, salvage whatever credibility remains, and get back to the middle of the road. Now, there’s no way they can “Pivot” without a reason On the next move, their credibility is gone. They’ve walked themselves into a place where every direction out is hell and they’re going to attempt to cover their tracks with the CBDC.
What’s going on?
I believe that the apathy of the majority will allow governments to easily take away our physical cash and replace it with CBDCs, ushering in a utopia ((or dystopia) of financial surveillance. But, we could have an ally impede the government’s ability to implement the most effective population control CBDC architecture; domestic commercial banks.
Today, when you go to make a purchase at a store, there’s a very good chance that the transaction will be made using a debit or credit card. Retailers love cards because they’re easy to use, and they also provide valuable data that can be used to track customer behavior. But what if there was a form of payment that was even easier to use than cards, and which also allowed the government to track every single transaction? This is the future that central bank-issued digital currencies (CBDCs) promise
While CBDCs may seem like a benign way to modernize our antiquated payment systems, there are some very real dangers associated with them. For one, CBDCs would represent a full-frontal assault on our ability to have sovereignty over honest transactions. With a CBDC, the government would be able to track every single financial transaction that takes place, meaning that there would be no more privacy when it comes to your finances. This would be a massive invasion of privacy, and it would give the government unprecedented control over our lives.
Another danger of CBDCs is that they would represent an existential threat to retail banks. Today, retail banks make money by collecting fees for services like processing payments and providing loans. With CBDCs, these services would no longer be needed, as the central bank would handle all payments directly. This would put many retail banks out of business, and it would concentrate even more power in the hands of the few remaining mega-banks.
The final danger of CBDCs is that they could be used to effectively modify the behavior of entire populations. With a CBDC in place, the government would be able to negative interest rates on deposits, meaning that people would effectively be taxed on their savings. This could easily be used as a tool to encourage people to spend rather than save, and it could have a profound impact on our economy.
Imagine…
You and the rest of the others decide to try to change your circumstances by nonviolent means. You march, sing songs of protest and generally engage in non-violent civil disobedience.
You use social media platforms like Facebook, Twitter, and Weibo to organize and galvanize. Your movement grows to be quite large, and you decide it is time for a march on the capital to show the country how unjust its discriminatory policies are.
Oh boy, the government doesn’t like it when you show them up in front of the whole country. That’s why they start getting really nervous when your movement continues to gain viral levels of visibility by effectively generating and disseminating heart-wrenching images from other smaller protests around the country. The police try to fight back by using tried-and-true tactics like firehosing and sicking attack dogs on you and your fellow peaceful protestors.
Images of children mangled at the hands of the supposed protectors of the people sway public opinion against the government. That, as history has warned us, the government cannot abide. Sooner or later, they’re going to crack down…hard. Just be careful you don’t end up on the wrong side of their crackdown. Trust me, you don’t want that.
With the new tool, the CBDC, the police can freeze out anyone they believe to be involved in or sympathetic to the upcoming march on the capital. Using data from Facebook, Twitter, Weibo, and other platforms, the police are able to target these individuals and prevent them from accessing the financial system.
This creates a significant barrier to entry for the march, as these individuals will not be able to fund their travel or accommodation. In addition, it also makes it more difficult for them to communicate and coordinate with each other. As a result, the police can effectively disrupt the march without having to take any overt action against the protestors.
In light of the current protests against the government, it is important to consider the role that access to essential goods and services plays in organizing an effective protest. Without access to transportation, food, and water, protestors will be unable to reach the capital or sustain themselves once they arrive.
This ultimately undermines the entire purpose of the protest. In order to be successful, protestors must have access to the resources they need to make their voices heard. Otherwise, their efforts will be in vain.
Enter the CBDC
The risks CBDC’ pose should not be taken lightly, and we need to have a serious discussion about whether or not we want to move forward with this tech.
Institutions have made it clear that they’re continuing on this path, even if it trashes the world economy and all our trading partners
As we unravel, Interest rates go higher, the deficit gets bigger, interest expenses increase, more debt (bonds) is issued, and Interest rates go higher……cycle repeats until “No Bid”
“No bid” on Government bonds = No liquidity for Governments to pay their bills
This = default or Pivot
The deflationary Death Spiral has now reached the Fed leading to the US Currency crisis and forcing Pivot
Hyperinflation “Be Damned”, is where the pace of the global fiat system collapse rapidly increases. Here is when we begin to see the government CBDCs narrative being gradually, covertly, and insidiously sold and introduced
They know enough to never let an opportunity for distraction go to waste. My guess is that they continue until something breaks. Powell said he wants to be paul Volcker which means he’ll keep raising interest rates.
We’ll experience a dramatic smear campaign on bitcoin and crypto from governments prior to the rollout of CBDC’s
Since the exchange rates became forex market-based in 1971, the world’s economies have had financial inflation built into them.
West Texas Intermediate Spot Oil Prices vs. S&P 500 Index- As noted by Authur hayes
“Oil is up almost 180% since 1983, reflecting a CAGR of 2.75%. The S&P 500 Index is up almost 35x since 1983, for a CAGR of 8.44%. Energy is the master currency. When viewed in that light, the Federal Reserve is only 0.75% above its 2.00% inflation target on average.”
The problem is that In all of human history, the world has never been so indebted at such low-interest rates. The losses to savings and capital, in general, will be massive because the debt must be inflated away. These two objectives are at direct odds with each other under a traditional financial monetary system so the government will need to lean on some sort of technological innovation to achieve both. Guess what they have planned?
What’s the big deal with CBDCs? Well, for starters, they offer a way for governments to issue digital currency that is purely electronic and thus defies the laws of physics. That’s right, with a CBDC, you can actually have your cake and eat it too.
But more importantly, CBDCs are base money, which means they are direct liabilities of the central bank. This is in contrast to the electronic money you’re probably used to, which is based on the traditional banking system and thus consists of credit money that is created through loans.
With CBDCs, blockchain technology affords an additional level of control that enables governments to solve their two-pronged inflation problem. So if you’re looking for a way to improve your financial situation, a CBDC may be worth considering.
In a world where the government can directly control the money supply, it’s only a matter of time before they start implementing some truly dystopian policies. For example, they could start by giving e-money to those who are struggling to afford basic necessities like food and fuel.
This would help to keep the population placated, but it would also allow the government to exert more control over them. Additionally, they could put restrictions on how people can invest their money, forcing them to invest in government bonds that yield less than the rate of inflation.
This would effectively transfer wealth from the private sector to the government, and it would make it much harder for people to save for their future. Ultimately, this CBDC dystopia is a very real possibility, and it’s something that we should all be concerned about.
The rise of the CBDC, or Central Bank Digital Currency, has the potential to create a hellscape for the economically oppressed. CBDC’s could be used by governments to control who is allowed to transact and for what.
This would allow for the direct exploitation of already marginalized groups. The economic oppression of minority groups is often justified by majority groups who believe that others deserve their lowly station due to their supposedly deficient qualities. With the rise of the CBDC, this justification will become even easier.
The CBDC has the potential to create a future in which the economically oppressed are even further controlled and exploited by those in power. We must be vigilant to ensure that this does not happen.
The categories of the various types of CBDC's
The Wholesale Model
Sinister how cbdc’s will manifest the worst in human nature; Imagine…
The Federal Reserve has this new cryptocurrency called WokeCoin, and you can only get it through Bank of America or Bank of China because they’re only two nodes operated by BOA and BOC For ease of description. Anyway, you download the digital wallet app for whichever bank you’re using where your Wokes are kept. Moving Wokes between two accounts is an internal database transfer within the BOA ecosystem. Let’s assume it works similarly with the Bank of China.
When you move your money from one bank to another, you’re trusting that both banks will agree on the transaction. It’s just like the Bitcoin network, except it’s private and only BOA and BOC can validate transactions. BOA and BOC compete with each other for Woke deposits by offering attractive deposit rates. BOA and BOC then use their short-term deposit funding to make longer-term loans to businesses in Wokes.
While BOA and the BOC are dependent on the Federal Reserve, they’re buffered from government politics. This allows them to pursue their primary purpose-making money. This model doesn’t improve much on the current banking system as it is still operated by private banks that have profit motives. The only major change is that cash is banned, so usage of digital payments is 100%.
I was always under the impression that the Federal Reserve was a government non-profit organization, but that’s not the case. I mean, I guess it makes sense – if they’re in charge of running the node, why wouldn’t they need to charge a fee?
They can pretty much ask for whatever information they want from the banks, and the banks have to comply. That seems a little unfair, but I guess that’s just the way things are, and it’s nothing compared to the level of theft and forced compliance that we plebs have to cope with.
Also, it sounds like the Federal Reserve can direct the banks to lend money at attractive rates to certain people or groups. That’s actually pretty cool – I didn’t realize they had that power. Finally, it seems like they can also do things like hand out Wokes to people directly.
In this model, the government definitely has more control over the money supply than in an economy with physical cash. However, because the government relies on private organizations to execute its monetary policy, said policy may not be carried out as written. Private organizations may have their own agendas that conflict with the goals of the government, and they may not have the same degree of control over the money supply. As a result, the government’s control over the money supply may be less than perfect. Nonetheless, this model does provide a greater degree of control than an economy with physical cash.
Direct Model
What if I told you that the Federal Reserve has its own app? And what if I told you that this app is the only means through which Wokes can be stored and transferred? This app is called the FedWoke app, and it’s available for download on the App Store and Google Play.
Commercial banks can still obtain licenses to take deposits and lend, but they now compete directly with the Federal Reserve. Given that the Federal Reserve cares only for politics, the Federal Reserve can enact policies that, if banks followed suit, would send those banks into bankruptcy. Specifically, the Federal Reserve can pay the highest rates of interest on deposits and offer the lowest rates on loans, because it can operate at a negative net interest margin for as long as it can get away with it politically.
The Federal Reserve can do this because it can never go bankrupt since it’s the government. This makes it the safest place to store your Wokes. So if you’re looking for a safe and convenient place to store your Wokes, look no further than the FedNow app.
The Trend
Here is a quick summary of what the five major central banks have in place or plan to implement with regards to CBDCs.
- People’s Bank of China (PBOC) — The Chinese Communist Party launched the e-CNY using the Wholesale Model.
- The Federal Reserve — The Boston Fed is studying the issue in conjunction with the Massachusetts Institute of Technology. They have yet to decide on whether to use a Wholesale or Direct Model.
- The European Central Bank (ECB) — They have decided to implement the Wholesale Model but continue to study the issue.
- The Bank of England (BOE) — They are studying the issue and have not fully decided whether to issue a CBDC at all — but if they do decide to, they have said they would implement the Wholesale Model.
- The Bank of Japan (BOJ) — They are still studying the issue but have determined that when the time comes to implement their CBDC, they will adopt the Wholesale Model.
Given that every country that has at least reached the “choosing a CBDC model” stage has opted for the Wholesale Model, it’s clear that no central bank wants to bankrupt their domestic commercial banks. Not even in China, where the biggest banks are all directly owned by the government.
That tells you how much political power the banks have inside of the government. For politicians who care more for power than profits, this is their chance to completely destroy the influence of Too Big to Fail banks, yet, they seem to remain politically unable to do so.– Arthur Hayes
Out Of business
How much business do you think commercial banks stand to lose globally if CBDC’s are introduced using the Direct Model?
According to the McKinsey 2022 Global Payments Report If the government were to issue currency directly to the people, it would cut out the middleman, so to speak. The global payments industry is a $2.1 trillion industry, and 40% of banking revenues come from it. So, if CBDCs were to become a reality, the banking sector would lose a significant chunk of revenue. They would do whatever it takes to be included in the payments flow, even if it means offering direct government-issued currency to the people. Given their track record, it’s likely they would succeed. After all, they have billions of dollars at their disposal and a lot at stake. So, while direct government-issued currency may seem like a good idea in theory, in practice, it may be difficult to implement and may not have the intended effect.
A Banks greatest threat.
Every time the mainstream press publishes FUD about stablecoins, CBDC discussion heats up. Why is everyone so obsessed with stablecoins? It seems like every time the mainstream financial press publishes an article about them, the internet goes crazy. I think it has something to do with the fact that they’re pegged to the dollar, so people see them as a safe investment. Plus, they’re convenient to use and easy to trade. But there’s more to stablecoins than meets the eye.
For example, did you know that the three largest stablecoins all hold dollars in the banking system against a token pegged at $1? That means for every $1 token outstanding, the issuer has cash, short-term government bonds, and short-term corporate bonds worth at least that much. And because they’re such large issuers, they actually have pretty sizable margins. In fact, I estimated the Net Income Margins (NIM) of each of the three largest stablecoins, and they’re all quite healthy.
So if you’re thinking about investing in stablecoins, don’t just look at the price. Take a closer look at the underlying economics, too. You might be surprised at what you find.
The beauty of stablecoins is that they are a fraction of the cost of running a bank. A bank has to pay for things like employee salaries, benefits, and physical infrastructure. They also have to pay for security. stablecoins don’t have any of those costs. Instead, users just have to pay a small transaction fee each time they want to send value. This makes stablecoins a much more efficient way of sending money.
Just like a bank, stablecoin issuers love a rising interest rate environment. They don’t pay anything to holders of the tokens, so every time JayPow raises short-term interest rates, it puts more cash money in their pockets. This week JayPow increased short-term rates another 0.75% — that’s an extra $1 billion in yearly revenue, assuming their NIM rose by an equivalent amount. Banks pay billions of dollars for legal and compliance professionals to stay compliant with the law. A stablecoin must also pay these folks, but the business model is simply accepting fiat from a trusted counterparty and purchasing fixed-income securities. I wouldn’t imagine the total spend on legal and compliance for the three above issuers combined totals more than $100 million per year.
A lot of people seem to think that banks hate stablecoins because they’re a threat to their business model. But I think it goes much deeper than that. I think banks hate stablecoins because they represent everything that’s wrong with the financial system. They’re efficient, they’re decentralized, they’re borderless, and they’re transparent. In other words, they’re exactly the opposite of what banks are.
Don’t get me wrong, I’m not saying that banks are evil or anything like that. But I do think that they’re not only a relic of a past age, but they also don’t serve us with the same level of integrity that they served our parents and grandparents. They are inferior in every way and the sooner we transition to a new system, the better. The fact that stablecoins are still relatively small is irrelevant. They have the potential to upend the entire financial system, and that’s why the banks are so afraid of them.
The Cure
Its looking like CBDCs using the Wholesale Model will be launched in all major economies as there’s just no other way out of the current inflation pickle that they created that they’re willing to explore. They do not want to loose their privilage and they can’t survive without tools like these to placate the plebes and financially repress the patricians.
I’m nervous because I know that genpop doens’t understand or care. They’re is too busy with TikTok to wonder first why their physical cash disappeared, and then why their financial sovereignty was openly taken from them.
The good news is that its looking like retail banks aren’t going anywhere as no country is interested in bankrupting them with the use of a direct delivery of a CBDC.
The most utilized CBDC model will be the Wholesale one, and the most negative aspects of this technology will likely be neutered by profit-hungry, Too Big to Fail commercial banks that operate at odds with power-hungry politicians.
We also have Bitcoin. Capital controls are coming, and when all money is digital and certain transactions are not allowed, the ability to purchase Bitcoin will likely vanish.
If you don’t own at least a very small % of your liquid net worth in Bitcoin, the best day to have bought Bitcoin was yesterday.
Outlook and final thoughts;
Yet again. For the love of God, will somebody please think of the children?!? No, seriously, think of the children. The future depends on it. I’m talking about stablecoins and Bitcoin of course. The CBDC discussion heats up every time the collective mainstream financial press publishes FUD about stablecoins and Bitcoin, and it’s always the same arguments.
They’re all about trust without verifying. About how we can’t possibly trust a digital currency that isn’t backed by a central authority like a government. But that’s missing the point entirely. trust isn’t the issue here. The issue is control and transparency. Who do you want control over your money? myself? The government? A multinational corporation?
I don’t know about you, but I’ll take my chances with a decentralized network of computers run by nobody in particular over any of those options. At least then I know that nobody’s going to be able to print more money out of thin air and use it to buy up all the assets in the world, inflating away my savings in the process.
Frequently Asked Questions.
Well, you would be out of luck. The CBDC would be mandatory for everyone to use.
Nope! The CBDC would replace cash altogether. So say goodbye to your privacy!
Too bad! With a CBDC, the government would have a database of all of our financial transactions. So they would know exactly where your money is going.
Well, you’re out of luck. With a CBDC, the government would have unprecedented control over our finances. They could freeze our accounts or impose negative interest rates if they wanted to. In other words, they could make your life very difficult!
Um, well, they would be very convenient I guess. But other than that, no, not really. In fact, they could potentially be very dangerous!
**Disclaimer**
Cryptocurrencies and ICOs are all the rage these days, with everyone from celebrities to your next door neighbor looking to get in on the action. However, it’s important to remember that investing in cryptocurrencies and ICOs is highly risky and speculative. The prices of these assets can be incredibly volatile, and there’s no guarantee that you’ll make any money by investing in them. In fact, you could easily lose everything that you put into them. So if you’re thinking about investing in cryptocurrencies or ICOs, make sure that you understand the risks involved and only invest what you can afford to lose.