Category Archives: Currencies

CBDCs, SDRs, and the Re-Monetization of Gold, by Nick Giambruno

Banks and central banks relentlessly debase their fake money, they are setting the stage for the return of real money, gold. From Nick Giambruno at internationalman.com:

Central bank digital currencies

The current monetary system is on its way out.

Even the central bankers running the system can see that.

That’s why they are preparing for what comes next as they attempt to “reset” the system.

It’s important to emphasize that nobody knows what the next international monetary system will look like—not even the elites. However, they know what they want it to look like and are working hard to shape that outcome.

Next, I’ll examine their preferred outcome.

Plan A: CBDCs and SDRs

The new international monetary system the central bankers would prefer involves central bank digital currencies (CBDCs) and the International Monetary Fund’s Special Drawing Rights (SDR) replacing the US dollar as the world’s new reserve currency.

Despite all the hype, CBDCs are nothing but the same fiat currency scam with a new label on it—and zero privacy. They will make it even easier for the government to inflate the currency, and that’s what I expect them to do if they impose CBDCs on us.

However, it’s doubtful CBDCs can save otherwise fundamentally unsound currencies—as I believe all fiat currencies are.

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Looking at the Economic Myth of the “Soft Landing”, by Frank Shostak

“Soft Landing” is a Wall Street concoction to convince clients not to sell their overpriced stocks. It takes a market crash before they sell. From Frank Shostak at mises.org:

According to commentators, countering inflation requires monetary authorities to actively restrain the economy, with “experts” believing that higher interest rates need not cause an economic slump. Instead, they believe that the Fed cab orchestrate a “soft landing.” It is questionable, however. that a soft-landing scenario is possible.

Money Printing Creates Economic Damage

If inflation is defined as increases in the money supply rather than increases in prices, then it becomes clear that all that is required to counter it is to close all the loopholes for the generation of money out of “thin air.” The increases in the money supply and not increases in prices inflict damage to the wealth generation process.

Originally, paper money was not regarded as money but merely as a representation of gold. Various paper money receipts represented claims on gold stored with the banks. The holders of paper receipts could convert them into gold whenever they deemed necessary. Because people found it more convenient to use paper receipts to exchange for goods and services, these receipts came to be regarded as money itself.

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Gold has never been so attractive, by Alasdair Macleod

Sooner or later, probably sooner, real money is going to catch a bid and never look back. From Alasdair Macleod from goldmoney.com:

In our lifetimes, we have not seen anything like the developing economic and financial crisis. Rising interest rates are way, way behind reflecting where they should be.

Interest rates have yet to discount the continuing loss of purchasing power in all major currencies. The theory of time preference suggests that central bank interest rates should be multiples higher, to compensate for the current loss of currency purchasing power, enhanced counterparty risk, and a rapidly deteriorating economic and monetary outlook.

There is no doubt that the majority of investors are not even aware of the true scale of danger that interest rates pose to their financial assets. Some wealthier, more prescient investors are only in the early stages of beginning to worry. But if you liquidate your portfolio, you end up with depreciating cash paying insufficient interest. What can you do to escape the fiat currency trap?

This article argues that having everything in fiat currencies is the problem. The solution is a flight into real money, that is only physical gold — the rest is rapidly depreciating fiat credit. Owning real money is the only way to escape the calamity that is engulfing our current economic, financial, and fiat currency world. 

Avoiding risk to one’s capital

From conversations with family and friends, one detects an uneasy awareness of increasing risk to investments. There are two broad camps. The first and the majority are only aware that interest rates are rising, and their stocks and shares are falling in value but fail to make the connection fully. The second camp is beginning to worry that there’s something very seriously wrong.

Investors in the first camp have usually delegated investment decisions to financial advisers, and through them to portfolio managers of mutual funds. They have taken comfort in leaving investment decisions to the experts, and besides the odd hiccup, have been rewarded with reasonably consistent gains, certainly since the early noughties, and in many cases before. They trust their advisers. Meanwhile, their advisers are rewarded by the volume of assets under their management or by fees.

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What the End of the Fed Put Actually Means, by Tom Luongo

It means there’s a chance that U.S. finances  and its economy are restored to sanity, although I wouldn’t advise holding your breath waiting for it. From Tom Luongo at tomluongo.me:

gold-dollar-trap

For more than a year I’ve been arguing that the Fed was tightening US dollar supply. When I first put the idea out there it was met with intense skepticism and, for the most part, it still is.

The Fed has long been the punching bag of hard money and alternative finance types because, frankly, it always deserved it. For nearly the past generation, until June of 2021, the Fed acted as the Central Bank of the World.

But we’re rapidly reaching the moment where a lot of people are finally beginning to realize maybe the vaunted “Fed Put,” the belief that the Fed always comes to the market’s rescue isn’t going to show up anytime soon, if at all.

Whenever there was a major crisis on the horizon the Fed was always there to provide the world with the dollars needed to keep things from collapsing completely. This was especially true in the aftermath of Lehman Bros. and the 2008 housing crisis which broke the post-Bretton Woods Dollar Reserve Standard ushered in by Paul Volcker’s extreme monetary policy of the early 1980’s.

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Central Planners of the World, Unite! By MN Gordon

Central banking is Soviet style central planning, and it has worked about as well as Soviet central planning did. From MN Gordon at economicprism.com:

Federal Reserve Chair Jay Powell wants a swift decline in the rate of consumer price inflation.  He isn’t getting what he wants.

According to the Bureau of Labor Statistics, consumer price inflation, as measured by the consumer price index (CPI), increased at an “official” annualized rate of 8.3 percent in August.

This exceeded Wall Street’s consensus expectations of 8.1 percent.  What’s more, it crushed investor hopes a ‘Powell pivot’ would come sooner rather than later.  On Tuesday, the Dow Jones Industrial Average (DJIA) crashed 1,276 points on the news.

Powell, a central planner, wants consumer price inflation to be about 2 percent.  Instead, he’s got something that’s over 400 percent higher.  What’s going on?

If you want to understand what’s up with raging consumer price inflation and Fed monetary policy, you must understand this.  Right now, in the United States as in most of the world, we have a scam currency that’s controlled by central planners.  Specifically, we have what Karl Marx envisioned in Plank No. 5 of his Communist Manifesto:

“No. 5.  Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.”

The Federal Reserve System, created by the Federal Reserve Act of Congress in 1913, is indeed a privately owned ‘national bank.’  It also holds a monopoly on legal counterfeiting in the United States.

Without the Fed’s policies of mass credit creation, it would have been impossible for the U.S. government to run up a $30.8 trillion national debt.  Without the Fed’s printing press money, the U.S. government never could have run annual trillion-dollar budget deficits for a better part of the last decade and a half.  Without the Fed’s fake money there would not be over 100 million people dependent upon the U.S. government for their daily bread.

This is the miracle of centralized credit.

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An Asian Bretton Woods? By Alasdair Macleod

Are Russia and China converging on a true gold-backed currency? From Alasdair Macleod at goldmoney.com:

The financial war between Russia with China’s tacit backing on one side, and America and her NATO allies on the other has escalated rapidly. It appears that President Putin was thinking several steps ahead when he launched Russia’s attack on Ukraine.

We have seen sanctions fail. We have seen Russia achieve record export surpluses. We have seen the rouble become the strongest currency on the foreign exchanges. 

We are seeing the west enter a new round of European monetary inflation to pay everyone’s energy bills. The euro, yen, and sterling are already collapsing — the dollar will be next. From Putin’s point of view, so far, so good.

Russia has progressed her power over Asian nations, including populous India and Iran. She has persuaded Middle Eastern oil and gas producers that their future lies with Asian markets, and not Europe. She is subsidising Asia’s industrial revolution with discounted energy. Thanks to the west’s sanctions, Russia is on its way to confirming Halford Mackinder’s predictions made over a century ago, that Russia is the true geopolitical centre of the world.

There is one piece in Putin’s jigsaw yet to be put in place: a new currency system to protect Russia and her allies from an approaching western monetary crisis. This article argues that under cover of the west’s geopolitical ineptitude, Putin is now assembling a new gold-backed multi-currency system by combining plans for a new Asian trade currency with his new Moscow World Standard for gold.

Currency developments under the radar

Unreported by western media, there are some interesting developments taking place in Asia over the future of currencies. Earlier this summer, it emerged that Sergei Glazyev, a senior Russian economist and Minister in charge of the Eurasian Economic Commission (EAEU), was leading a committee planning a new trade currency for the Eurasian Economic Union.

As put forward in Russian and EAEU media, the new currency is to be comprised of a mixture of national currencies and commodities. A weighting of some sort was suggested to reflect the relative importance of the currencies and commodities traded between them. At the same time, the new trade settlement currency was to be available to any other nation in the Shanghai Cooperation Organisation and the expanding BRICS membership. The ambition is for it to become an Asia-wide replacement for the dollar. 

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Meet the most likely base layer for global CBDC’s: Ethereum, by Mark E. Jeftovic

The world’s central banks aren’t far enough along on central bank digital currencies, so they may end up using an existing cryptocurrency as a platform. From Mark E. Jeftovic at bombthrower.com:

Outside of China, no major nation has anything else ready

Imagine if you will, persistent double-digit inflation, energy costs soaring, shortages causing blackouts across Europe, bond yields spiking uncontrollably, supply chains grinding to a halt while sovereign debt crises erupt the world over…

Then one Friday after the markets close, heading into a long weekend, an emergency broadcast occurs in which the President, the Chairman of the Federal Reserve and the Speaker of the House appear on national TV to announce  that pursuant to the Statutory Bail-Ins provision of the 2010 Dodd-Frank Bill, a banking holiday would take place over the following week. During that holiday, certain bank liabilities would be converted into FedCoin (FED), an ERC-20 token on the Ethereum blockchain, at the rate of 10 FED per $1.

Every depositor would have an NFT issued to their Social Security Number – and that would give them access to their FedCoin via the Sign-On-With-Ethereum protocol. Depositors would have to “stake” their Ethereum to access the “full benefits” of FedCoin, however any sub-optimal social behaviours, (such as being behind on current vaccinations, or running your air conditioner too cool) could result in “slashing” – having a portion of their staked assets “burned”.

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Existential Disquiets: Financial War Against the West Begins to Bite, by Alastair Crooke

The U.S. government is writing checks its overdrawn bank account can’t cash. From Alastair Crooke at strategic-culture.org:

Europe sinks into being a distant backward province to a falling ‘Imperial Rome’, Alastair Crooke writes.

The Club of Rome, founded in 1968 as a collective of leading thinkers pondering global issues, took as its leitmotiv the doctrine that to view the problems of humankind individually, in isolation or as “problems capable of being solved in their own terms”, was doomed to failure – “all are interrelated”. Now, fifty-years on, this has become an unquestioned ‘revealed truth’ to a key segment of western populations.

The Club of Rome subsequently attracted immediate public attention with its first report, The Limits to Growth. Published in 1972, the Club’s computer simulations suggested that economic growth could not continue indefinitely because of resource depletion. The 1973 oil crisis increased public concern about this problem. The report went ‘viral’.

We know the story: A group of western thinkers were posed three questions: Can the planet sustain a European-style level of consumption spreading everywhere, across the globe? The answer from these thinkers was ‘clearly not’. Second question: Can you imagine western states voluntarily relinquishing their standard of living by de-industrialising? Answer: A definite ‘No’. Must a lower plane of consumption and use of energy and resources then be coerced upon reluctant populations? Answer: Definitely ‘Yes.

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Biden’s Most Enduring Legacy? By James Rickards

The Biden administration’s push for Central Bank Digital Currencies is on. From James Rickards at dailyreckoning.com:

Central bank digital currencies (CBDCs) are coming fast, and you need to be prepared for them because they’ll mark a major victory in the war against cash — and against your personal privacy.

You’ll see why today.

As the name implies, central bank digital currencies are digital, existing exclusively in electronic form. They’re not physical at all. Central banks would control them.

But it’s important to understand they’re not new currencies. They’re just digital forms of existing currencies. So the central bank digital currency of the European Central Bank will still be the euro. The central bank digital currency of the Fed will be the dollar. The Chinese yuan will be a digital yuan.

They’ll just exist in 100% digital form. A lot of people say, “Wait a second. Isn’t that a cryptocurrency?” The answer is it’s not.

Digital, but Not Crypto

Cryptocurrencies are different in some important respects. Number one, cryptocurrencies operate on a blockchain, or a digital ledger. It’s a way of keeping track of every transaction involving a particular cryptocurrency like Bitcoin.

A central bank digital currency does not have to be on a blockchain. It could be, but it probably won’t be. So it is digital, it is encrypted, but it’s not a blockchain and it’s not a cryptocurrency.

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The Threat Of Cashless Societies, by Louis Webber

If you really the government to know everything you do, just let them track every penny you receive or spend. From Louis Webber at earlking56.family.blog:

(A cashless society truly is a scary world. Picture everything that you’ve read about in history books within other totalitarian regimes, and you’ll get a taste of what is to come.)

Cash is the king.

So the old adage goes anyway, and for the prepper – the one who’s keeping abreast of current events – cash is one of the last man-made means of protection that he or she has against governments that have grown to a degree of power that they never had before.

The Dangers of a Cashless Society

There are two predominant dangers that come with a cashless society, and just about every negative that you can think of due to such will fall into one of these two groups:

  1. Denial of purchasing power
  2. A complete loss of anonymity

Denial of Purchasing Power

The Threat Of Cashless Societies

A cashless society is a controlled society. If everything must go through an online banking or credit card process, then you have just lost virtually all control over what you buy.

Anything that is not politically sanctioned(guns, ammo, body armor, helmets, particular books, particular website premium subscriptions, political donations, etc.) could very easily be vaporized overnight.

This, of course, would drive the makers and holders of such products into a black market to barter their goods, and this in turn would be responded to by the use of overwhelming government force. This will come in the form of Stryker vehicles, concussion grenades, snipers, and men with automatic rifles and body armor.

Don’t believe me? Read FA Hayek’s The Road to Serfdom. Totalitarian governments must resort to force simply for the sole reason that people will naturally refuse to comply with widespread theft of their own goods. This force will only continue to grow in its usage.

Totalitarians do not accept blame for their own economical failures. The state is the end of all things to them, and as such, the end justifies the means – no matter how terrifying such a means may be.

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