“The importance of money flows from it being a link between the present and the future.”

— John Maynard Keynes

“No man’s credit is as good as his money.”

— John Dewey

“Where large sums of money are concerned, it is advisable to trust nobody.”

— Agatha Christie

“So you think that money is the root of all evil. Have you ever asked what is the root of all money?”

— Ayn Rand

“Money often costs too much.”

— Ralph Waldo Emerson

“I have always been afraid of banks.”

— Andrew Jackson, 7th President

“Money is a mechanism for control.”

— David Korten

“It is money, money, money! Not ideas, not principles, but money that reigns supreme in American politics.”

— Robert Byrd

“He who controls the money supply of a nation controls the nation.”

— James A. Garfield, 20th President

“You aren’t wealthy until you have something money can’t buy.”

— Garth Brooks

Bank-based digital money is happening. Right now. Like it or not. It claims to offer convenience, instant transactions, safety, and simplicity. The Federal Reserve’s FedNow payments service goes live in July 2023. Is this digital money? How does it work? What happens next? Should we be concerned? Maybe, maybe not. Like so much else these days, it depends …

You may have noticed that money is a major topic in the news today. The government is running out of [our tax] money in early June, so I read. According to data just released by the US Treasury, the US Government is down to its last $188 billion while spending continues at a rate of several trillion dollars a year. Treasury Secretary Janet Yellen penned a letter to Congress last week telling them that unless the US Debt Ceiling is raised, the U.S. Government “will not be able to meet its commitments by June 1”.

The so-called “debt ceiling” will of course be raised following a routine legislator ruckus since all it allows is the borrowing of more money via the money printing press. Actually, not a printing press but simply a few keystrokes on a computer somewhere that creates any amount of digital money that may be needed until the next time. Soon, that is.

There was a time, too long ago for anyone living today to remember, when money was something real, like gold and other hard heavy stuff. Now it is weightless and invisible, existing only on some computers somewhere. No stacks of colored paper or bags of heavy real stuff are involved any more, making life so much simpler – at least for government.

Wouldn’t it be easier for us all if money became fully digital?

Great news: The first huge step in this happy-money direction is already underway, and due for unveiling in July 2023 when the Federal Reserve Bank’s FedNow digital money happens. Of course, it is just a baby-step intended for use between banks and other financial institutions while things get put in place to roll out a retail (i.e., for us) version in the form of Central Bank Digital Currency (CBDC). Making life so much simpler for us all.

No more nasty paper money and heavy, expensive, scarce stuff like gold and silver to haul around and keep safe. Under the expert care and expertise of bankers and government officials, our money will shortly become almost fully digital and stored in completely safe and secure bank and government computers.

A minor obstacle exists – and one that is currently being dealt with – in obsolete and inconveniently competing money forms like cash, cryptos, gold, silver, and many other such real-money nuisances. Life for us will be so much simpler and easier when these are gone.

Given government’s lengthy track record of great and ultimate successes of so many kinds, this wonderful transition is certain to occur. Soon, or maybe even sooner. Probably much before the masses of normal folks even know what is happening.

About time that banks and government (among others) relieved us in the great masses of having to handle and protect nasty physical money and equivalents that have plagued humanity almost since humanity was invented. So much handier and reassuring to have all of our money, whatever “money” may be, safely stored as bits and bytes on computers located who knows where, maybe even in the clouds – or at least so I hear.

Say goodbye to obsolete old-fashioned physical money.
Say goodbye to obsolete old-fashioned physical money.

Our money is so much more safely stored on computers and clouds, right?

Good thing that nothing ever goes wrong with computers, and their clouds and kin. Especially now that we have all-powerful AI to lend a helping hand to do complicated money-stuff and computer-stuff and cloud-stuff. And our rulers can simply print new digital money in seconds with a few keystrokes, which is then backed by always-reliable government promises or IOUs whenever needed.

And, if you for some odd reason should ever want to get a bag of such digital money to – you know, like buy something privately and confidentially, or even give quietly to someone in return for something (like a simple kindness)? No problem. Just send them a USB drive that you can load from your smart phone in seconds. Or maybe via just an email or text if you don’t have a digital money bag or drive handy.

Life doesn’t get any better than this, does it?

Umm …

Life, unfortunately and inconveniently, seems to involve people

In a perfect world, digital money would be, well, perfect. Always available when you need it, always retaining its value while stored. In a somewhat less perfect world, something and often many things go wrong. Unintentionally and intentionally. Most often, both.

Take money printing, for example. The Fed does this with the best of intentions in order to reduce inflation and to spend on things that require future-money, money which does not yet exist. Money printing/creation adds this to our now-money supply, which eventually makes pre-existing money of less value in the grand scheme of things. Nothing of value was created by money printing except a bunch more IOUs, aka promises to exchange the IOUs for real money upon request. Maybe.

This unavoidable process has succeeded in reducing the purchasing power of our money by about 98% since 1913. That is, it takes $50 in today’s money to buy what $1 would buy in 1913. And this has happened almost entirely without the use of digital money. It certainly would have happened regardless of the form of fiat and credit money (IOUs) in use at any point. It is the quantity of such IOU-based money that does the nasty here.

So, who causes all this damaging money printing? Why, elected and appointed government people of course. It seems that these people simply never learn, individually at any time, or institutionally over time. This is their nature. It has been the nature of governing folks forever at least.

Changing the people doesn’t work. Ever. Electing, selecting, appointing, or collaborating with. As a wise but yet another largely ineffective member of this sorry lot once observed …

“I have always been amazed that Americans look to government entities for solutions when incompetence is the main attribute of government.”
— Paul Craig Roberts, Assistant Secretary of the Treasury under Reagan

So, doesn’t this mean that fiat-based digital money won’t be any more of a problem than our present fast-growing oceans of fiat-based paper money? That is, digital money really doesn’t fix anything? The problems arise from the wonderful folks who create and manage money in whatever form.

Applying this harsh lesson to digital money

On the extremely high likelihood, or certainty even, that our current batch of equally talented and effective rulers and their helpers will perform just as incompetently and ineffectively as those in past, we can expect at best the worst outcomes with digital money. All are fully onboard with digital money issued and controlled by themselves.

Some flavor of catastrophe is certain. Only its particular nature is as yet not fully clear – but only in terms of outcome, of course, not of intention and related machinations.

The good news about rulers and helpers of all kinds is that they are reliably incompetent and consequently, ultimately self-destructive. The bad news is that their damage and misery meanwhile is shared fully with us normal people. Or perhaps even more than fully shared.

This means that we should expect the absolute worst coming from the present headlong scramble into government digital money. The potential good news, if any, is that the worst may not occur – instead something slightly less-worse than that.

Okay, enough of the good news part of the bad news. Now we need to look at the bad news part of the bad news.

As you already suspected, it gets much worse

There are, over-generally speaking, just two kinds of people. The great majority consists of basically good, well-meaning, capable folks – like us. The vast minority of the rest – the few-but-still-too-many – are our rulers, ruler wannabes, and their helpers and supporters. Mainly those now globally in positions of great power and resources. They appear to be doing their domination thing quite successfully, so far at least.

Their thing for the most part is control over the masses, which inevitably requires surveillance of all. What aspect of living, such as it may be, is common to the masses and clear evidence of their behavior? Why, money of course.

Try living today without money as it is presently designed and managed. Preppers aside, since these naively well-meaning folks are readily disposable once the unprepped masses are behaving properly. If digital money is all that is available, nearly all of us will use digital money to conduct our living affairs.

I have written quite a bit about what seems to be going on in this respect. See here, here, and here as examples.

At this particular moment, in early May 2023, government-created and managed digital money is being rolled out globally and inescapably. Virtually every country in the world is now onboard and actively pursuing it. This is our future, with almost 100% certainty.

Why might this be so bad? Let me list just three reasons out of the many more available for such use:

  1. Money availability will be entirely under the control of governments, which are by definition nasty, incompetent, and worse.
  2. Every transaction with such money will be almost completely tracked and analyzed by the money controllers.
  3. Money itself will become the primary means of close and detailed control of people everywhere, 24/7.

Anonymous competitors to government digital money – such as cash, cryptos, gold, and the like – will be ruthlessly destroyed in the very near term. This operation is fully in progress now, as you almost certainly know.

The Great Reset: Bank failures, CBDCs, economic collapse, wars

Greatly convenient for the resetters but for us not so much, all of these miseries seem to be occurring simultaneously. Just coincidentally, of course, but probably inevitable in our complex, fragile, highly-interconnected world. This, as I have argued, is simply how complex systems like our world work. Random failures at almost any point can cascade into system chaos and collapse. At best.

Klaus Schwab’s WEF, ably and energetically assisted by the UN, WHO, EU, IMF, and similar large, capable, and upstanding entities, is rapidly shaping up a wonderful New World Order, One World Government, and other sustainable and healthful practices and systems. Just for us.

Why, they are even trying their very best to get a world war or worse started. War has historically proven to be the most effective means of achieving major societal restructuring and improvement. Or at the very least, getting things greatly reset.

And, as noted above, pretty much all tied tightly together using money.

And why? Via the always diplomatic and understated The Burning Platform under the heading “Coming To America”:

“Their plan is to force all the small banks to go bankrupt, with the top 5 or 10 banks vacuuming up their assets. Then the Federal Reserve, in conjunction with the Treasury, rolls out their central bank digital currency (CBDC). Google, Apple, Microsoft and the rest of the Silicon Valley tyrant corporations roll out the electronic footprint for all commerce to be conducted using CBDCs. All the mega-corporations fall into line, requiring CBDCs to buy their products. Your social credit score, just like your financial credit score, will determine whether you can buy anything. You will live in your 300 sq ft hovel in your 15 minute city and you will be happy.”

A bit harsh, but probably not too far off the mark.

Digital money – CBDCs – for everyone, everywhere.
Digital money – CBDCs – for everyone, everywhere.

Some banking system consolidation may be good

With so much of our financial activities being conducted online (aka digitally) these days, the necessity for huge numbers of small banks and branches has greatly diminished. Substantial consolidation will help decrease bank costs without damaging customer services to any great extent, and help ensure bank profitability and survival.

That said, consolidation into a handful of huge banks seems bad. This pretty much applies to any concentration of market power. Diversity of size, location, and services mix is always much healthier overall. Big banks are not known for their deep and demonstrated concern for customers despite their PR to the contrary.

However, banking system consolidation/collapse will make the rollout of CBCDs that much easier and faster, and probably less costly. It may even be, thinking briefly on the far side of fantasy, that the banking system mess is actually part of the grand CBDC rollout scheme and its related machinations. But they would never do such a thing, would they?

CBDCs are inevitable, and are all but here

CBDCs will be our new money, like it or not. Sure, there is a bit of competition at the moment from cash, cryptos, and metals, but it can be dealt with quite effectively once the CBDC backbone and infrastructure is largely in place. FedNow is how it begins operationally, but much of the overall system groundwork has been completed. It’s a done deal.

So, what is FedNow, you might wisely inquire?

It is supposedly the “wholesale” part of the digital banking system that facilitates only interbank and similar transactions – back-office stuff. It has nothing to do, so it is said, with the “retail” side that involves us bank customers in so many ways.

Umm …

From personal finance website NerdWallet.com: “What is FedNow?”:

FedNow is the Federal Reserve’s new instant payment service that will enable customers at participating banks and credit unions to send and receive money within seconds, 24/7 and every day. You’d be able to complete payments or transfers on weekends, holidays and after banks’ business hours, which isn’t the case for standard online transfers such as those through the Automated Clearing House Network. ACH transfers are processed in batches and tend to take one to three business days to complete.”

“’What FedNow will do is it will enable all the banks, any bank in the United States — not just the big ones — to offer instantly available funds and real-time payments to their customers,’ said Fed Chair Jerome Powell before the House Financial Services Committee on March 8.”

“FedNow will be available to all banks and credit unions, but there’s no requirement for them to join. Consumers, businesses and non-bank payment providers won’t be able to use FedNow directly, but they can through a participating financial institution. Neobanks, which aren’t banks, would need to partner with a participant bank.”

“When will FedNow launch? The Federal Reserve plans to launch FedNow in July 2023. More than 120 banks and payment providers have been part of the pilot program since 2021.”

Source: https://explore.fednow.org/.
Source: https://explore.fednow.org

I don’t know about you, but my somewhat techie background readily fills in the obvious blank space in this story: FedNow is exactly what is needed as the foundation for a superfast CBDC rollout. Which is, as I understand things in reality, just what the folks in charge of the world want.

FedNow is not (yet) a CBDC

DC think tank Cato Institute makes a strong point that FedNow is not a CBDC: “Is FedNow a CBDC?”:

What is FedNow? FedNow is an instant payments system—a sort of update to Fedwire and the Automated Clearinghouse (ACH). Individuals will not have direct access to FedNow, but they will have access to faster payments so long as their bank or credit union opts into the FedNow network. Although creating FedNow was not necessary to achieve faster payments, one big difference with FedNow will be that payments will no longer be held up on weekends, holidays, or after traditional business hours.”

FedNow is Not a CBDC. Astute eyes will likely recognize that FedNow does vaguely resemble a wholesale CBDC. Where a wholesale CBDC would be restricted to financial institutions for use during interbank settlement, FedNow would also be restricted to financial institutions. The difference, however, lies in their design. Where a CBDC is a currency, FedNow is a payment rail.”

Another umm …

Perhaps FedNow is instead a piece of foundation architecture that will be needed shortly to implement a U.S. retail CBDC. Technology today is truly amazing, so this kind of transition should be a piece of cake. Well, maybe not quite … another wrinkle has mysteriously emerged to complicate this current mystery.

DCMA’s UMU/Unicoin – unicorn or proto-CBDC?

On April 10, 2023, the grandly-named Digital Currency Monetary Authority (DCMA) launched its international central bank digital currency – grandly-termed the Universal Monetary Unit (UMU, Ü). DCMA calls it the “Unicoin” despite there being an existing, prior, separate cryptocurrency also going by the name “Unicoin”.

Source: John McKeown via Tekedia.com.
Source: John McKeown via Tekedia.com.

Josh Adams writing in BeInCrypto.com reports this odd happening suchly: “What’s the Deal With the New ‘Unicoin’ International CBDC”:

Who Is the Digital Currency Monetary Authority? The DCMA is a private organization that advocates for the advancement of digital currencies in central banks and money systems. According to a press release, its executive team has been working with governments and central banks on blockchain and digital currency cryptography since 2013.”

“The DCMA is also a monetary authority. ‘UMU is our monetary asset, and we back it,’ said Darrell Hubbard, the Executive Director of the DCMA, and the chief architect of UMU, in an interview with BeInCrypto. ‘Meaning, you can always redeem the value from us for the value paid to us. That’s the role of a monetary authority.’”

“The group aims to promote global trade by integrating international payments and settlements with digital currency. … It is important to note that UMU (or Unicoin) will not be a central bank digital currency in the traditional sense. At least not in the foreseeable future. It is intended to function ‘like a CBDC.’ However, it is legally a money commodity. ‘UMU functionally operates as a CBDC,’ said Hubbard. ‘But it’s intentionally working across all national jurisdictions. Not just for a local economy.’”

“According to the DCMA, UMU/Unicoin is designed to be suitable for central banks to create retail (for use by the public) and wholesale CBDCs (for use by financial institutions.)  It also claims to fix a problem: the slow, inefficient, and complicated process of international bank transfers.”

“According to the release, banks will be able to link UMU digital currency wallets with SWIFT codes and bank accounts to process cross-border payments similar to SWIFT but over digital currency networks. This will be done at wholesale foreign exchange rates and with settlements happening in real time. This contrasts with the traditional model, where international bank transfers can take days.”

Kind of like what FedNow is doing, yes? And, as you know, governments don’t like competition. Even quasi-government entities like the privately-owned (by banks) Federal Reserve.

Bottom line:

CBCDs are surely coming here, probably before year-end. Maybe even sooner. Old forms of money – mostly real money – will be steadily phased out. And CBDCs, much to no one’s surprise, will be used to the fullest extent possible for surveillance and control purposes. As China is already doing. Soon to be in place almost globally.

Our best hope meanwhile is that the rulers, ruler-wannabes, and supporters will be as self-destructive as such nasties have been throughout history. They serve mostly to flush out systems that cannot be repaired by peaceful, constructive means. In this event, The Great Reset may well turn out to be The Great Flushing.

Related Reading

“The Managing Director of the International Monetary Fund, Kristalina Georgieva, believes it’s only a matter of time before central bank digital currencies (CBDC) are rolled out around the world and in the United States. ‘The future has arrived,’ Georgieva said. ‘Even in the U.S. where [CBDC] was for quite some time a topic of not great interest, now there is an engagement.’”

“Georgieva spoke at the Milken Institute’s 2023 Global Conference on May 1, where she addressed the opportunities and risks the IMF sees for CBDCs and urged financial leaders to think about the unthinkable.”

“’What we have lived through in the last years has been a series of unthinkable events, the pandemic, the war in Ukraine, the rapid jump of interest rates after many, many years of staying low,’ she said. ‘It is upon all of us to anticipate shocks and be ready to act when they occur, because they will be coming.’”

“Among the events the IMF believes could have a destabilizing effect are CBDCs, depending on the type a country chooses to adopt. ‘When we think about CBDCs […] what we are careful about, is the choice between wholesale and retail CBDCs,’ she said. ‘We think that wholesale CBDCs can be put in place with fairly little space for undesirable surprises, whereas retail CBDCs, they completely transform the financial system in a way that we don’t quite know what consequences it could bring.’”

“Retail CBDCs are digital currencies issued by central banks directly to citizens for everyday commercial and financial transactions, and are designed to replace the country’s conventional money supply in circulation.”

“Central banks around the world are actively exploring central bank digital currencies (CBDCs). In fact, several central banks have now launched their own CBDC. Yet these efforts have struggled to gain traction among citizens. While CBDC proponents present many potential benefits, those benefits do not stand up to scrutiny. In short, these proponents fail to meaningfully distinguish CBDCs from the digital dollars that exist today. Yet CBDCs are not just a story of government waste or cronyism. While CBDCs don’t offer any unique benefits to the American people, they do pose serious risks to financial privacy and economic freedom. From expanding financial surveillance to destabilizing the financial system, CBDCs could impose enormous costs on U.S. citizens. Put simply, there is no reason for the federal government to issue a CBDC when the costs are so high and the benefits are so low. Congress should ensure that the federal government does not issue a CBDC.”

“A CBDC is a digital national currency. In the case of the United States, a CBDC would be a digital form of the U.S. dollar. Like paper dollars, a CBDC would be a liability of the Federal Reserve. But unlike paper dollars, a CBDC would offer neither the privacy protections nor the finality that cash provides. In fact, it’s precisely this digital liability—a sort of digital tether between citizens and the central bank—that makes CBDCs different from the digital dollars millions of Americans already use.”

“In the private sector today, Americans regularly use multiple forms of digital dollars. They send digital payments using credit cards, debit cards, prepaid cards, and several mobile applications (e.g., Zelle, PayPal, and Cash App). In fact, it’s not just payments that have gone digital. Nearly every financial institution offers services—from savings accounts to mortgages—via mobile applications. So there should be no misunderstanding: the U.S. dollar is already widely available in digital form. Moreover, the current system works so well that few people ever take the time to worry about whether the digital dollars they are using are a liability of Visa or a liability of Bank of America.”

Ready or not, CBDCs are coming. Whether the U.S. participates or not, the rest of the world is exploring and deploying CBDCs. According to the Atlantic Council, 114 countries, representing more than 95% of global gross domestic product, are exploring CBDCs. Actively engaged in this digital gold rush are 19 of the G-20 countries, including India, Japan, Russia and South Korea, each of which has made significant recent progress. The European Central Bank is expected to introduce a prototype for a ‘digital euro’ by the end of 2023, becoming more widely available by 2025. The central banks of some of the freest societies on Earth – from Sweden to Japan and England – are exploring their own CBDCs.”

“Americans and American multinational corporations will soon contend with CBDCs worldwide, whether or not the U.S. deploys a digital dollar at home. What remains unknown is whether surveillance coins, such as China’s e-CNY, will have the world to themselves, or whether they will encounter competition from freedom coins issued by traditional democracies such as the United States. The potential risks of failing to even consider a freedom coin form of digital dollar are too great to ignore.”

CBDCs: Choice of surveillance or freedom. Gov. DeSantis says: ‘What the central bank digital currency is all about is surveilling Americans and controlling behavior of Americans.’ The governor raises a legitimate concern. He is right that the rise of certain foreign CBDCs – particularly China’s e-CNY – create a benchmark for one kind of CBDC that will provide enormous financial surveillance and social control. You might call this form of CBDC a ‘surveillance coin.’ DeSantis is also right that money in the United States must reflect the values of a free society, including individual privacy, free enterprise and economic freedom – a ‘freedom coin,’ so to speak.”

“But DeSantis and other opponents of a U.S. CBDC are wrong to assume that a digital dollar is foreordained to be a surveillance coin and not a freedom coin. That will only be the case if the American people and their political leaders allow it to be so. In digitally designed currency, characteristics such as surveillance and censorship are design choices. There is no reason why the U.S. could not design a digital dollar with very different features that adhere to the democratic values of a free society, using cutting-edge, privacy-enhancing technologies such as zero-knowledge proofs, digital credentials and homomorphic encryption.”