Have you been worrying about CBDC? Maybe you should be.

[UnseenParticipant]

This is past the discussion phase. The Fed is rolling it out in a testing phase this year. If you want to know what CBDC (Central Bank Digital Currency) is, it’s explained here in a nutshell, along with some basic pros and cons, the following viddy is a good, reasonably short explanation. If you already understand what CBDC is, his take on the pros and cons begins at about 7:15:

But should we give up our freedom in exchange for convenience? One convenience we’d likely welcome: no more hours spent slaving over tax forms. The government could just deduct taxes on the fly and settle up for us at tax time.

As long as you have a positive balance and your cell phone, you can buy anything you can afford from groceries, to bus tickets, to a new Porsche. Transactions would be settled immediately.

On the flipside, the potential downsides are many. It could give the government an uncomfortable level of insight into how one spends or does not spend one’s money along with a way to control how one spends it. Spending too much money on meat or cigarettes, nope, you can only spend $?.00. No money to buy crypto.

You deposit some money from a private transaction. Maybe you sold your $100K Pez dispenser collection (yes, Pez dispensers can be ridiculously highly-valued collectibles) or maybe you sold a few kilos of marijuana. The FBI gets told to drop by so the government will know how you came by your new income. All in the interest of stopping crime, you understand.

BTW, if you’ve got $1000 off-the-books emergency cash under your mattress right now, if a CBDC is instituted, you’ll have to turn that in, let the government know you have it, or lose the value. You’re also letting the government potentially supervise how you spend it. (That’s a worst-case scenario, but it’s hardly impossible.)

The government could also keep track of where you go by seeing where you spend your digital dollars.

Thinking of how transactional records could be abused, CBDC sounds like a bad idea.

And yet, many argue it’s not something to consider as a possibility. It’s something The Fed must do because we don’t want to be the last kid on the block without one.

Why is The Fed in such a hurry to roll out a digital dollar? Supposedly, a major reason for a digital currency is to protect the one thing that gives the United States so much power in the world, its role as the international reserve currency. However, is a CBDC really needed to do that? Wouldn’t it be crazy for other countries to abandon the dollar or to have no reserve currency?:

BTW, one reason for not anonymizing such a currency, making a cryptocurrency, is that cryptos can be used to finance crime. However, it seems to me that a lot of crime is done through barter anyway, no cash involved. Sex for drugs, drugs in exchange for a Ferrari. And, then, what about that other alternative for cash, gold. Can’t one conduct criminal transactions using gold? Maybe the government will confiscate all the gold as they have in the past in order to prevent criminal payments.

Anyway, what are your thoughts on CBDC’s?

[RichRaelianParticipant]

Hi! As a schizophrenic single man I obsessively worry all the time.

[Simon PayntonParticipant]

RichRaelian wrote:

As a schizophrenic single man I obsessively worry all the time.

I’m a schizophrenic too.  But I’m very lucky that my symptoms are completely controlled by medication.  Before then I spent about 8 years getting more and more ill, and unruly, and troublesome for everyone else.  I did some very creative things that no-one would believe if I told them.  I find that schizophrenics make very good poets.

[UnseenParticipant]

Those of you who can’t stand Jimmy Dore, try to ignore him and pay attention to the clips he presents and his guests, especially anyone here living in Euro-land. Your freedom is about to be under the control of a central bank that, in a very real sense, will own your money. This has already happened in China where some money is given to citizens with a “use it or lose it” provision designed to force them to spend it. Obviously, this means they can’t save such money to buy a home or car.

[Author]

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