NB #1: It is a criminal offence to give financial and/or investment advice without proper authorisation by the appropriate authorities.
NB #2: Nothing in this blog-post is not and should not be construed as or regarded as financial and/or investment advice.
Rumours in certain circles have been circulating about the possibility of the introduction of central bank digital currencies (CBDCs) in major G7 economies.
A rumour is circulating that the Biden administration MIGHT be issuing a statement at 2PM Eastern Standard Time on Wednesday 31st January 2024 that the US $ will be converted to a CBDC from that point in time.
Since Bretton Woods in 1944 the US$ has been de facto reserve currency with the bulk of international trade conducted in the currency. This underpinned the Marshall Plan post 1945 and helped finance the US PSBR since that time. The result being the USA has built upon a sovereign debt that would be unsustainable were the US $ loose it’s status.
Yet loosing this status is precisely what appears to be happening!
Any person assuming that such an event would only adversely effect the USA and US $ holders would be drastically mistaken. There is a saying: “If the USA catches a cold the rest of the world catches pneumonia.”
Transitioning the US $ from it’s present fiat status to full digital status would be an attempt by the Biden administration to dodge a particularly economically lethal bullet.
There is another saying: “The clocks on the [Wall] Street run on future time.” That is to say that in relation to a price of a stock (UK share) take into account anticipated future events.
There is another saying: “There is safety in numbers.” We in West Penwith are from time to time reminded of this saying by the local starlings in fantastic murmurations. There has been speculation about the Eurozone implementing a CBDC. The best time for the European Commission and the European Central Bank to implement such a change would be when the US $ transitions to avoid speculative turmoil. This of course would also apply to Sterling.
Thus, IF the USA transitions at the end of this month, expect the Eurozone and the Sterling area to follow suit. Logic demands that such transitions are co-ordinated.
I would not be surprised if certain persons were to profit considerably from any such change. Already some institutions are making plays on the possibility of these events taking place. Any profits gained as a result of privileged information of course would be illegal.
Such developments would represent a huge transfer of power to the state. CBDCs offer the potential of programmability. That is to say the individual transactions conducted by an individual could be monitored and controlled by the state. Rationing of consumer products (such as red meat) could be easily introduced – although any government would have to contend within the negative backlash and politicians generally don’t like infuriating voters.
Of more concern than the Vegan Society (https://www.vegansociety.com/) forcing us all onto a plant based diet, is the prospect of severe geo-political instability given the fact that we have a war in south eastern Europe, a war in the Levant, a war in the Gulf of Aden, tensions in the Persian Gulf, tensions in the South China Sea, the Taiwan Strait and on the Korean peninsular.
Then we have some Christian eschatologists drawing people’s attention to Revelation, Chapter 13, verse 17: “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” and suggesting that CBDCs represent this. Of this I make no comment whatsoever other than to draw the reader’s attention to the reference.