Posted on 07/13/2018 7:53:10 AM PDT by Sean_Anthony
The advantages of cash far outweigh any advantages of a cyber currency. It's for all these reasons that Americans should reject Fedcoin
During the Obama administration, Marxists came up with the idea of creating Fedcoin to replace physical money altogether. The idea was to create a new cyber currency like Bitcoin but controlled by the Fed. In 2016, there was an article in Moneywise titled, U.S. Government Awards $7 Billion to Develop New Fedcoin, and it stated: “At this year’s ‘World Economic Forum’ in Davos, Switzerland, Nobel Prize-winning economist Joseph Stiglitz declared that the U.S. “could and should move to a digital currency and get rid of (paper) currency.”* Ironically, no honest reason has ever been given to justify the move to cyber currency.
Moreover, the article went on to say, “Last year, former U.S. Treasury Secretary Larry Summers declared it was “time to kill the $100 bill”… arguing that, by making large bills illegal, it would reduce crime. So far the Fed’s heavily funded research is paying off… The FBI already knows how to seize digital currencies. The Marshal’s Service know how to sell it. The IRS know how to tax it. And now, the Federal Reserve could copy it to rid the U.S. of cash.”
Pie in the Sky = British TV Series ?
I hate people with cash in front of me at the checkout line. No transaction needs to take more than 15 seconds. If you’re going to use it, have exact change, because odds are the moron behind the counter is going to take forever to give you your change.
Marxists just don't give up, do they...
Destroy the U.S., as we know it, any way possible.
I have a bad feeling that Soros would love "Fakecoin..."
Does the Soviet Union use "fakecoin?"
China?
Switzerland?
Germany?
On a related issue, did the late Soviet Union ever have welfare," as we know it?
Does Russia today?
I’ll just keep my couple hundred pounds of silver rounds....
FedCoin - All the drawbacks of fiat currency and digital currency in one convenient package!
Cash: secure and private transactions for the People
Cashless: a great deal for governments, banks, and data slurpers
The Federal Reserve is preparing Fedcoin in advance of the economic Reset per former FDIC chair:
Former FDIC chair: The Fed needs to get serious about its own digital currency
Sheila Bair
Yahoo Finance
June 21, 2018, 4:17 PM GMT
NOTE: This post was originally published on June 8, 2018.
Last week’s market volatility reminds us — again — of the fragility of modern-day financial systems. In just the past decade, we’ve experienced our own subprime crisis, followed by Europe’s sovereign debt crisis, followed by assorted calamities in Portugal, Venezuela, Russia, Ukraine, Brazil, and now the risk of Italy exiting the Eurozone.
Lack of confidence in our banking systems motivated the mysterious Satoshi Nakamoto to develop bitcoin. He (she, they?) originally intended it as a widely accepted method of payment that could function completely outside of the banking system. Unfortunately for M. Nakamoto, bitcoin has failed miserably as a method of payment. Its extreme volatility has made it popular as a speculative investment and store of value, but who wants to pay for something in bitcoin when its value could double in a month, or accept it as payment if its value could just as precipitously drop?
A radical idea that’s gaining credibility
But what if the Fed or other central bank issued their own digital money? Though it sounds radical, the idea is gaining credibility among an increasing number of mainstream economists and central bankers themselves. Presumably, a central bank-issued digital currency (CBDC) would be as stable as traditional fiat currency, while reducing the risk of financial crises and improving monetary policy tools. To be sure, a sudden, wholesale shift from bank accounts to CBDC could have severely negative consequences for credit availability given banks’ reliance on deposits to fund loans.
Consider the current bank-dominated payments system. Institutions and individuals place most of their ready cash with banks, either through deposit accounts (a portion of which is FDIC insured) or by purchasing banks’ short-term debt. The system works smoothly under benign conditions, but in times of extreme stress, people lose confidence in their banks. So they pull their uninsured money out of the banking system, disrupting the free flow of payments. This problem of “bank runs” is as old as banking itself, and has yet to be fully conquered, notwithstanding the advent of deposit insurance.
However, suppose consumers and businesses could convert their bank deposits into a digital currency that would be issued and backed by the Fed? Let’s call it FedCoin. They would no longer need to worry about bank instability. Since the Fed can print its own money, by definition, it can always make good on its financial obligations. What’s more, the costs and inefficiencies in the current payments system would be greatly reduced. Consumers would no longer need to maintain checking accounts, with their expensive maintenance and overdraft fees, to effectuate payments. At the same time, businesses accepting Fedcoin could avoid the interchange fees charged by banks and their card networks — fees that are particularly burdensome to small firms.
A better tool to conduct monetary policy
Importantly, the Fed would have much more effective tools for conducting monetary policy to address economic cycles. The Fed now manipulates the money supply through buying and selling securities with a select group of big banks and by paying them interest on the reserves they deposit at the Fed — currently a tidy 1.75%. When the Fed wants to stimulate the economy — as it did after the crisis — it buys securities from these banks and reduces the rates it pays them on reserves, inducing them to lend the proceeds to the real economy to get a better return. When it wants to raise rates — as it is doing now — it reduces its holdings of securities and increases the rates it pays on reserves.
This is a nice deal for the banks, but hasn’t done a whole lot to help the rest of us. The past 10 years are proof positive that current monetary tools are woefully inadequate to stimulate broad-based economic growth. The super rich have gotten a lot richer, while the middle class has struggled.
But imagine that we all held interest-bearing FedCoin. During inflationary periods when the economy is overheating, the Fed could raise rates on interest which would be paid directly to the general public, giving us an incentive to put more savings into FedCoin and spend less. During recessionary periods, the Fed could reduce the interest rate on that currency, giving us more incentive to spend to stimulate economic growth. If the Fed reduced rates to zero and the economy still spiraled downward, it could issue special digital coins that would disappear, within a time certain, if not spent on consumption. This would be much more effective stimulus than the deficit-funded tax and Social Security refunds we employed during the Great Recession. Instead of spending that money, most people either saved it or paid down existing debt.
Why the Fed needs to stay ahead of this technology
This may sound like monetary nirvana, yet FedCoin could have major disadvantages as well. The biggest is disruption to credit availability. Over $10 trillion is currently deposited in demand deposit accounts with banks. This is money banks use to lend to consumers and businesses, but could theoretically disappear if the public moved their all of their bank transaction accounts into FedCoin. Yet, this risk could be mitigated by limiting the amount of FedCoin issued and allowing banks to compete with FedCoin for deposits (though they might have to offer better rates and service to do so).
Many central banks — including those in the UK, Singapore, China, and Sweden — are proactively evaluating the merits of a central bank-issued digital currency. Meanwhile, tech geniuses in the private sector have not given up on Nakamoto’s original vision to create a privately issued, stable digital currency that could be widely used for payments. Perhaps the most well-publicized effort is Basis, a startup backed by such luminaries as billionaire investor Stanley Druckenmiller and highly regarded former Federal Reserve Governor Kevin Warsh. Basis’s algorithm stabilizes its value by issuing more of the currency when the price goes up relative to the dollar, and buying it back when the price declines.
It is far from certain whether Basis or similar private sector efforts will be successful, at least in the short term. However, think of the ramifications if they were. Retailers, large and small, loathe paying interchange fees on card transactions, as much so as consumers hate getting trapped in high account fees. One can imagine they would be eager to start using digital currency as payment, bypassing the banks. That could prompt a different kind of run on banks, as fiat money quickly migrated out of deposit accounts into digital coins.
That would be very bad for the banking system, but also the Fed, as its current monopoly on currency issuance would be threatened, as would its ability to control the money supply. To avoid that result, the Fed needs to get serious now about evaluating the relative merits of issuing its own digital currency. If it does not stay ahead of this technology, not only could banking be disrupted — but the Fed itself could also be at risk.
Sheila Bair is the former Chair of the FDIC and has held senior appointments in both Republican and Democrat Administrations. She currently serves as a board member or advisor to a several companies and is a founding board member of the Volcker Alliance, a nonprofit established to rebuild trust in government.
That wont work. Sure silver and gold may store wealth but you won't be able to use it in day to day transactions which is the whole point of a fedcoin. Fedcoin would still be able track and document your day to day activities and purchases. There is no work around for Fedcoin unless you go live in the woods. This is a movement that must be stopped before it even begins.
Look
It’s already numbers on computers
Bottom line
Money is NOT the true game
Not even close
When all hell breaks loose and you cannot use your debit card, your credit card, or your EBT card, let me know how much you will wish you DID have cash.
Nobel Prize-winning economist Joseph Stiglitz declared that the U.S. “could and should move to a digital currency and get rid of (paper) currency.”* Ironically, no honest reason has ever been given to justify the move to cyber currency.
Never been through a hurricane have you, Sparky?
These people, our so-called Elites, have no idea what is going on in Flyover land.
Meh. I *have* plenty of it readily accessible. I just hate using it or being behind people doing so. Not as bad as #$%#$#ing checks, though
Wisely I used my cash to buy bullets.
Sweden is said to pretty much gone to electronic money.
https://www.bing.com/search?q=Sweden+electronic+money&form=HPNTDF&pc=EUPP_HPNTDF&src=IE-SearchBox
Actually if you were able-bodied and refused to work in the USSR you would be jailed for the criminal offense of “social parasitism”. In Russia today there are some safety nets (paid out of the federal pension fund), but all are short term and require firm documentation of, for example, an injury or other legitimate disability.
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Fedcoin would still be able track and document your day to day activities and purchases. There is no work around for Fedcoin unless you go live in the woods. This is a movement that must be stopped before it even begins.
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Easy ‘fix’ then: Mandate govt, at ALL levels, use it exclusively for a determinate ‘testing period’.
Once the thought of the audit books come around, I suspect they’ll drop it like a hot potato.
They are the auditors so it still won't work. They would fake the books just like they do already in everything else controlled by government. We need to be way past the point of thinking the rule makers will themselves play by the rules. They won't.
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