Proponents argue that a digital U.S. dollar will allow the Federal Reserve a much greater level of precision in enacting its own monetary policy. For instance, if the Fed wants to juice up consumer spending, it can start penalizing the digital U.S. dollars stored in each citizen’s wallet, thereby creating a perverse incentive to spend those dollars. Similarly, the Fed can also provide targeted relief to those most in need by depositing a set balance of the digital U.S. dollar directly within designated wallets.
Rohail Saleem
November 15, 2022
Here Comes the Digital U.S. Dollar: The NY Fed Has Now Launched a 12-Week Pilot Program for Digital Dollar Tokens
[This is what the proponents are saying? Wow! That’s like a used car salesman telling you, “This car is a ticking time bomb and by morning it will take out your house and family in a huge fireball. Just give us your money and in a few minutes it is yours to drive off the lot.”
This is a really bad idea. I prefer cash and perhaps precious metals for money. Change my mind.—Joe]
True. But, apart from the level of honesty, there’s nothing new here. The Fed has been doing exactly this for as long as it has existed, and its predecessors in the fiat currency business likewise. In particular, depositing fake money created out of thin air is what they do every day.
The one new thing is taking away balances directly. Other than being a bit faster, that’s no different from taking away buying power by inflating the currency. If anything, it’s a less attractive option because it is so much more obvious. I would expect the bad guys to stick with the existing scheme, where they devalue money sneakily, not by cutting your bank balances but by making the same balance as before worth less than before.
I wonder if some of what’s going on here is a mechanistic view of money and economics, the idea that you can twist some knobs and directly control economic outcomes. That’s nonsense. A few years ago, reading von Mises, I realized why this is so. A lot of people seem to think of economics as a science akin to math, one that deals in measurable facts. (Never mind that most economists have only the faintest understanding of either math or logic.)
In fact, that’s not accurate at all. Money is primarily a psychologic object, a token or symbol that is viewed as having value by group consensus. That perception is tied to some properties of real money — permanence, a supply that does not rapidly change, etc. But as some (like Neil Smith) have pointed out, there is nothing special about gold that says it has to be money; it is a long history and widespread consensus that has made it so. The same goes for the US fiat dollar. The same even went, in some circles, for crypto-currency — possibly the FTX affair will cure that hallucination, possibly not.
My point is that the psychological foundation of the US Dollar is not all that strong and has been weakening. The sort of nutty things proposed in the article you quoted will only serve to impair that foundation. If it collapses, the US Dollar will be revealed to be merely wastepaper with pretty pictures printed on it.
You’ve heard the expression “not worth a continental”. Well, there will be a new one, not worth a digital. You can thank FTX for that.
Yes, although the FTX story feels more like old fashioned fraud in the Bernie Madoff pattern.
All good comments. To me, this is being ruled by bean counters. And living in a bean counter world. Digitals, that’s priceless Mr. Macus!
And if I remember correctly. Exactly how they stole everything of value from the German people in Weimar. By directly injecting money into people’s pockets, they made it worthless.
And the theft gave rise to Hitler.
If one works all day at a certain rate flipping burgers. And by the end of the day your wages have become so worthless one couldn’t buy one of the burgers you had been flipping all day?
You will vote for Hitler too.
It also allows a certain group to never need you for anything ever again.
And if they do, they can get it for nothing. Absolute slavery.
Whatever the costs, it’s just issued. Kind of like bank credit is issued today. Except on a personal level directly from the bean counters.
The problem for them is human nature will not suffer it long. Their hubris and greed pushes into overreach every time.
Americans will never believe the shortages are real. Especially from this latest crop of liars.
I can hear Jean-Pierre lesbo now, Digitals have value, and work just like paper money. Believe it or else!
Let’s get really, really real: what’s the exchange rate of this digital currency to match grade ammunition?
If you can’t use your currency to get your hands on real, live ammo, your currency is objectively valueless. Just because the originator of the phrase “Political power flows out of the barrel of a gun” was a mass murdering communist, doesn’t make the notion wrong.
You could more easily replace the US Dollar with certificates for 50 rounds of 9mm, and make change with .22, with exchange rates for other calibers and grades of ammo. When the banks close down, the local gun store can take over the property and store the money-equivalent ammo in their vault.
I like that. Gold is pretty, but for an objective standard of value, ammo is at least as good.
Well Joe, you asked for someone to change your mind. I seriously don’t think that anyone who would attempt to do so could marshal an argument that would in any way meet your expectation for logic, consistency and adequately address the obvious fatal consequences for liberty. The only reason for a digital currency is to have immediate and severe punishment to mete out upon the heads of anyone unwilling to accept the new slavery. It will become the tool of ultimate cancellation. If money can be given to anyone, it can also be taken from anyone. Personally, I think the real problem will arise when independently minded people that are monetarily cancelled cannot pay their rent to the government for the property they own “free and clear”. (Think about your property taxes. Don’t pay them for three years and watch what happens.) There is no acceptably moral way that government can determine who is granted or denied largess sourced from the monies taken from citizens under threat of imprisonment or death. This is not going to end well for anyone.
The criminals in power will say ANYTHING to con people into accepting what they have planned. CBDC – Central Bank Digital Currency is the name. The END OF CASH is the goal. Once they succeed EVERY transaction anyone makes anywhere for any reason will be tracked, taxed and if they don’t like it BLOCKED.
Digital Currency will allow a level of control over society that until now was only DREAMED OF by tyrants. THAT is what they are after. Sadly I can’t think of a damn thing any of us can do to prevent them from implementing it…..at least not legal things.
That’s OK Dan. According to them you’ve been a criminal all your life anyway. As have we all. It’s a big club. But we ain’t in it.
Lucky for them we haven’t become comfortable with the distain under which they hold us.
Digitals only work when the electricity is on. And their the ones turning off the power. (Busting dams as fast as they can).
This level of ignorance can only run an armed society for a very short while. Then it pops.
Till then its popcorn, more ammo, and canned goods.