That’s how economist and banking expert Richard Werner describes the coming digital dollar – aka FedCoin.
Werner isn’t a hotshot economist like Larry Summers or Paul Krugman. He has a somewhat obscure academic post at De Montfort University in England.
But he’s one of the few professional economists who’s vocal about the danger of this new money system.
And he’s right to be sounding the alarm.
As you’ll see today, this technology hands governments and central banks total control over your financial life. It also obliterates what’s left of your financial privacy.
And that makes it fundamentally incompatible with a free society.
On Monday, I (Chris Lowe) showed you how governments want to replace the physical cash in your wallet with a new, purely digital kind of cash.
This will be loosely based around cryptocurrencies such as bitcoin – but with none of the privacy or decentralization features.
And we looked at how the Chinese central bank has just rolled out its first public test of a new digital version of its national currency, the yuan.
Then yesterday, we looked at how central banks across the Western world – including the U.S. and Canada – are following suit.
Financial elites want to promote digital cash as a convenience. And most folks will see it that way… and embrace this new money. But that will be a huge mistake…
Already, most of the money supply in the U.S. (about 97%) exists as electronic dollars.
But today, you still have the option of switching to physical cash. You just have to go to an ATM and pop some notes in your wallet.
That’s important for your financial freedom.
When you pay for something with Ben Franklins from your wallet, nobody needs to know about it. Not the government. Not a central bank. Not a Big Tech firm in Silicon Valley.
But digital dollars are different. They’re electronic notations recorded in a federal database. So the government can track, monitor, and record everything you do with them.
He’s the coauthor of The Bonner-Denning Letter along with Legacy Research cofounder Bill Bonner.
Dan and Bill have been warning about governments’ escalating War on Cash for several years.
And Dan told me he’s now more worried than ever…
The phrase “permanent record” is an appropriate one. That was the title of NSA whistleblower Edward Snowden’s recent book about the surveillance state.
There’s already mass physical surveillance through CCTV cameras, drones, blimps, and the like. There’s already mass digital surveillance via Big Tech platforms such as Facebook and Twitter.
That’s bad enough. Now, we’re talking about mass financial surveillance by the government… connected with the ability to punish people for either their political or economic behavior. I can’t imagine why anyone would be in favor of that. So that’s why we want to keep banging the drum about it.
If you follow colleague Teeka Tiwari’s research, you’ll know that the blockchain technology cryptos are built around allows you to create “programmable money.”
I won’t get into the technical details of how this works. But at a high level, you can code each digital coin. This code determines how the holder of that coin can spend it… along with other properties and features.
Put another way, programmable money is money with constraints built in.
Think of food stamps. The government sends folks plastic cards that carry dollar values. But you can’t use food stamps at the liquor store… or to bet on a sports game… or to buy lottery tickets.
Food stamp “money” is spendable only on certain items. And the issuer – Uncle Sam – has the final say.
I’ve already shown you what they’re doing in China with the Social Credit System.
The ruling Chinese Communist Party gives everyone a social credit score. An app on your phone tracks this.
If your score drops too low, it bans you from getting on planes and trains. It stops you from staying in certain hotels. It even stops your kids from going to certain schools.
It separates what the party bosses see as “bad citizens” from “good citizens.”
What if governments in the West were to integrate someone’s theoretical social credit score with a programmable government currency?
Here’s Dan again…
With a digital dollar, the feds could say, “Dan is a bad citizen. He writes anti-government things. And he engages in financial behavior that suggests he distrusts the government. So we’re going to restrict his access.
“We’re going to inhibit his ability to buy plane tickets or train tickets or bus tickets, or rent a car. We’re certainly not going to allow him to buy anything that you could use as a weapon, whether it’s a gun, a hammer, or a sledgehammer.”
Once our financial data gets into the wrong hands – by which I mean the government’s hands – it can be and will be used against us.
You probably heard that, this week, Twitter throttled traffic to a New York Post article that claimed to have new dirt on Joe Biden’s son Hunter.
It caused a storm of outrage from folks claiming it was unfair censorship.
If you think that kind of censorship is bad… you ain’t seen nothing yet. With digital-only currencies, governments will be able to freeze or restrict accounts of dissenters and regime critics to the point where they can’t even buy necessities.
As I showed you yesterday, it’s already a trend in motion.
In addition to China, six other jurisdictions are in advanced stages of testing digital-only versions of their official currencies.
And the International Monetary Fund, the World Bank, the European Union, and the G20 are busy working out how to design, issue, and regulate centralized currencies.
So are central banks in the U.S., Canada, Britain, Japan, Switzerland, and Sweden… along with dozens of other central banks.
That means now is the time to prepare for what’s coming. And fortunately, there are some simple portfolio moves you can make to protect yourself.
So stay tuned for more on that next week… when we’ll wrap up our miniseries on the cashless society that’s coming.
Regards,
 |
Chris Lowe
October 15, 2020
Bray, Ireland