By Stan Szymanski
The Federal Reserve is ‘considering’ issuing a CBDC (Central Bank Digital Currency). They are asking for your ‘opinion’ by answering 22 different questions (they can be found at https://www.federalreserve.gov/apps/forms/CBDC) and the Fed’s prevention for the consideration of a digital dollar can be found here (which you might read (if you have the time)) to have an understanding of the questions: https://www.federalreserve.gov/publications/money-and-payments-discussion-paper.htm and click on the link to the accompanying 40 page PDF if you are so inclined). In today’s writing, I am going to offer some thoughts maybe not only for the Federal Reserve but for Louie and LouAnn LunchBox to consider (nothing contained in this writing is financial advice-consult your financial advisor). There is no way I can cover all facets of this issue in one article; hopefully this is a jumping off point for you to form your own opinion.
1. What additional potential benefits, policy considerations, or risks of a CBDC may exist that have not been raised in this paper?
Is a new CBDC going to do things better than Bitcoin or Litecoin? The people who write the code for Bitcoin have been at it for years and it has already been alpha/beta tested through over 12 years of transactions. Plus the ‘Network effect’ (as described by Trace Mayer) of Bitcoin is almost unsurpassable at this point. If the USCBDC comes out and is besieged by payment problems it will just make people run to Gold, Silver or Bitcoin that much faster.
2. Could some or all of the potential benefits of a CBDC be better achieved in a different way?
Some. With a better long term outcome for the US govt -and- its people. The US should opt for a bi or tri-metallic standard on which to base its currency. It should be based -real money- for instance on a tri-metallic standard that would be: Gold, Silver and Copper (perhaps a case could be made for a different metal format the third metal like Platinum). No matter what anyone says, the US dollar is ‘fiat money’ backed only by the ‘full faith and credit’ of the issuing government. That means that when they need more, they ‘decree’ it into existence by printing at whim and eventually, end up with hyperinflation. Even Bitcoin is fiat money. It may be the most perfect accounting mechanism ever invented (and loved by overbearing Anti-Christs everywhere), and it may be ‘somewhat’ scarce but the inherent, intrinsic value of an ethereal Bitcoin, IMHO is Zero. Your Mileage May Vary.
Gold, silver and copper in the other hand cost real money in the form of fuel, machinery and manpower (just to name a few) to pull out of the ground, refine and make presentable at the retail level. A government that bases its currency on real money (Gold, Silver, Copper) is constrained on how much it can spend because they would have to have more reserves of gold/silver/copper before they could create new money. Our fiscal budget would be easier to keep under control, especially when you have unstable people with the reins of power in their hands. Less sociopaths would be inclined to become politicians since the job would be less lucrative (‘lucre’-active?).
3. Could a CBDC affect financial inclusion? Would the net effect be positive or negative for inclusion?
Net negative. The linked Federal Reserve pdf stated that 5% of US households were unbanked and that almost 20% had a bank account but used more expensive financial services such as money orders, check-cashing services, and payday loans. Well a lot of these services allow the citizen to basically keep their transactions more private (especially when they choose to use cash) than a federally controlled digital tracking entity that some will call a currency.
4. How might a U.S. CBDC affect the Federal Reserve’s ability to effectively implement monetary policy in the pursuit of its maximum-employment and price-stability goals?
Coming from left field on this one. The Fed PDF didn’t really spell out the role of commercial banks in a world where the Federal government creates -all- the money. If the Federal government creates all the money then they would then also have the power to say yes or no as to who gets a loan. What if you didn’t get a jab and needed a loan for your business? Might not work out so good for you. Perhaps the Gubbamint would require you to have a ‘mark’ before you could access their unilaterally controlled system (And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. Revelation 13:17 KJB)
5. How could a CBDC affect financial stability? Would the net effect be positive or negative for stability?
Everyone knows that large numbers in a marketplace help to make for a fair and orderly market. Having just one central planning entity never works out well…just ask the Soviet Union…the US practically has a centrally planned economy now…
6. Could a CBDC adversely affect the financial sector? How might a CBDC affect the financial sector differently from stablecoins or other nonbank money?
The Marketplace needs to have -real money- to count on not fiat money. The US dollar is being devalued every day that they print new money. A Bi/Tri-Metallic standard is the only system that would have true stability. If the Fed adopts CBDC it will ultimately fail in a heap of worthless digital dollars.
7. What tools could be considered to mitigate any adverse impact of CBDC on the financial sector? Would some of these tools diminish the potential benefits of a CBDC?
The Federal Reserve -could- consider a digital currency that was tied to a Bi/Tri-metallic standard so that that way you have the digital convenience (perhaps like LODE (LODE is a blockchain-powered payments ecosystem providing investors with stabilized digital currencies backed by gold and silver.)-but they won’t. They love their fiat that they can control and use to control the populace.
8. If cash usage declines, is it important to preserve the general public’s access to a form of central bank money that can be used widely for payments?
We already have, gold, silver, copper and Bitcoin… I don’t see how the bureaucrats improve on these.
9. How might domestic and cross-border digital payments evolve in the absence of a U.S. CBDC?
According to Rob Kirby of Kirby Analytics …’Elephants are hard to hide. It’s also hard to hide $150 billion in daily turnover in cryptos. That translates into a $54 trillion annual run rate’… (Watch the Rob Kirby video at the usawatchdog link where Mr. Kirby talks about the Bitcoin settlement). Kirby is saying that …’More dollars are being pushed into the world market every year, and fewer of them are being used in trade settlement.’ So that means that apparently it is crypto that is being used in trade settlement in these amounts, -not- the US dollar…So I share all this to say that the dollar is already dethroned so a US CBDC will not stem the tide.
10. How should decisions by other large economy nations to issue CBDCs influence the decision whether the United States should do so?
They don’t give a rip. The other large economies have already mostly figured out how to trade around the US so the Fed’s hubris just doesn’t matter.
11. Are there additional ways to manage potential risks associated with CBDC that were not raised in this paper?
Gold and Silver.
12. How could a CBDC provide privacy to consumers without providing complete anonymity and facilitating illicit financial activity?
THAT is the dream of a supposedly compassionate central government.
13. How could a CBDC be designed to foster operational and cyber resiliency? What operational or cyber risks might be unavoidable?
Again, Bitcoin, Litecoin et. al. have already figured this out. Ask them.
14. Should a CBDC be legal tender?
It would be fiat money. My vote would be something that includes precious metals.
15. Should a CBDC pay interest? If so, why and how? If not, why not?
No. Any currency is not a an interest bearing bank account. But then again, maybe they want to end the banks and be your one stop shop.
16. Should the amount of CBDC held by a single end-user be subject to quantity limits?
How very communistic of you.
17. What types of firms should serve as intermediaries for CBDC? What should be the role and regulatory structure for these intermediaries? Steve Quayle, Greg Hunter, Bill Holter/Jim Sinclair, Kirby Analytics and Bob Moriarty just to name a few…Role: Keep ‘em in line
18. Should a CBDC have "offline" capabilities? If so, how might that be achieved?
You mean if the electricity goes away so the money would still work? Here is a better answer: Gold, Silver and Copper.
19. Should a CBDC be designed to maximize ease of use and acceptance at the point of sale? If so, how?
…or you could hand them a coin…
20. How could a CBDC be designed to achieve transferability across multiple payment platforms? Would new technology or technical standards be needed?
If you are going to go digital the cryptos have already figured a lot of this out. They will always be better at it than the Federal Reserve.
21. How might future technological innovations affect design and policy choices related to CBDC?
Future technological innovations and precious metals will make the CBDC look silly.
22. Are there additional design principles that should be considered? Are there tradeoffs around any of the identified design principles, especially in trying to achieve the potential benefits of a CBDC?
Why-Why is the most important (at least today) central bank in the world asking everyone from bakers to Mr. Bojangles on design considerations for a digital currency? Is it desperation, ineptitude or something else?
The reign of the US dollar, in whatever form, is over except in the minds of the totalitarians in charge of the institution issuing the questionnaire. The people who run it can’t admit it. The rest of the world is done with the US telling them what to do and the US breaking all the promises they make to their neighbors.
In my humble opinion, Bitcoin and a few of the other Cryptocurrencies will -always- be more advanced than the guys starting 12 years too late. Perhaps the issuers of the current legal tender will succeed in roping the US population into the ‘Not-So-OK Coral’. Much of the population has had its independence broken by the oppressive and tyrannical medical community. Hopefully there are enough Mavericks left for us to exercise our unbroken spirit for our country to remain free and with real money in our pockets to have the economic liberty that the founders intended.
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Stan Szymanski (or Encouraging Angels) is not a medical doctor. This is not medical advice. In all matters pertaining to the health and care of a human being consult a medical doctor. This is not legal, financial or personal advice. Consult appropriate professionals in those fields for that type of advice.
