by John Galt
January 26, 2017 22:05 ET
Remember when everyone said that Bitcoin was going to be the defying act of independence as a digital currency which replaces every global currency?
Did anyone really think that the world’s central banks were not going to go down without a fight?
Last night that was exposed on these pages when the People’s Bank of China shocked the world:
The PBOC is the science lab for an experiment which will have reverberations that will be felt in Beijing, Paris, Brussels, Berlin, London, and Washington. If the world’s largest nation by population and second largest economy can pull this off successfully, the ATM will go the way of the old traditional phone booth as a relic of history.
How you may ask?
It’s really quite simple as the greed of the average citizen will not only assist in this transition, especially in the United States, but almost guarantee a 90%+ compliance rate with the elimination of paper currency.
There have been several calls to eliminate the U.S. $50 and $100 bill from our currency. There have been other calls to follow India’s lead and accelerate to a digital or card based currency where individual spending can be monitored, taxed, and obstructed if need be by observing banking transactions using credit or debit cards. The latter calls have been more so from the so-called “security” chicken hawks who think that by imposing restrictions on law-abiding American’s civil liberties, they will prevent terrorism. But the problem these theories are that they fail to entice the consumer into wanting this move; in fact their public theories and proclamations make the idea of a cashless society more repulsive and puts off that day of reckoning further and further away.
Ah but China; they have an idea and all of our financial elites will monitor its success closely.
How would this work in the United States of America?
Imagine an alternative to cash where the average citizen is given money for nothing.
Yes, Dire Straits did indeed have great insight into our nation’s future.
The Federal Reserve in coordination with the Congress, after a law is passed permitting this, could pass out U.S.D.D. Cards (US Digi-Dollar). These cards would be universal as they could be tied to the individual citizen’s bank account. If the citizen uses the card for 60 days without using an Automated Teller Machine (ATM) during that roll out period, a bonus could be paid to the bank account on day 90 of $300 by the Federal Reserve and a promise that a minimum of 2% earned and deposited into their account on a monthly basis with annual usage bonuses ranging from $100 to $500 dollars (based on activity and average monthly balance) paid on December 20th of each year.
Add in a modification of the FDIC Insurance rule guaranteeing all bank accounts up to $10 million if an individual only had one bank account and used the card only for all financial transactions, not only would individuals consolidate their banking but they would demand access to the card; even if the banks charged them a nominal enrollment fee.
Once other individuals caught wind of their friends bragging about “how much money they are making by not using cash” the fad would accelerate enrollment, bank account consolidation, and of course, usage of the cash replacement card with the new digital dollar. This concept will gain popularity because the average citizen has been conditioned with the so-called “cash-back” or bonus credit cards where citizens get a perceived benefit from over-extending themselves as they gorge on credit.
Governments will need this tool sooner rather than later however as this is the final last desperate act to keep the fiat funny money system alive. After 85 to 90% of the population enrolls, that’s when the consequences of this shift to digital currency will be realized.
The Death of Cash, Birth of Control
If the digital currency experiment is successful, the remaining merchants and individuals who insist on using cash or non-traditional monetary equivalents will face a societal penalty. The government could easily impose a higher tax for “cash handling” forcing merchants to have dual pricing systems, one for Digi-Dollars, another for cash which could easily be 15-20% higher due to government and banking fees.
Another benefit for the government and Federal Reserve is that the casual holder of gold or silver for investment purposes will start liquidating their holdings as artificial prices fixes would be a reality, lowering the digital dollar value of precious metals thus enticing the owner to sell out sooner rather than later. For example, the price of gold is fixed at $1,000 per ounce by “the markets” which in reality is a coordinated effort by the Federal Reserve and Treasury. Joe Blow walks into a local dealer and wants to sell his two 1 ounce gold coins but wants cash. The dealer would reply that the cash value of the gold is $750 per ounce but the Digi-Dollar value is $1,200. Joe scratches his head and obviously take the Digi-Dollar valuation in a heartbeat. Meanwhile the precious metals dealer would receive a bonus of $400 Digi-Dollars over the $1,000 per ounce price for re-selling the gold to the Federal Reserve via a local bank. Everyone wins except the precious metal no long has a fixed valuation in dollars as the price would be arbitrary and the only use beyond collectibles would be for that .03% of the population that goes off the grid and uses it for barter.
The end result is that the sheeple would voluntarily turn in their precious metals in droves, the Federal Reserve would re-assert its monopoly over hard assets, and the government would soon have control of all financial transactions. Imagine having an investment where the government artificially rewards the individual’s purchase of it, like a Federal Government Municipal Bond (MAGABond or “Make America Great Again” bond) and penalizes the investor who speculates in commodities where the government wants to fix prices or actual physical assets like precious metals. The possibilities are endless once the digital currency reigns supreme and the end user has to play by the central bankster’s game of an imaginary market.
This means that taxation would no longer be a form 1040 filed to the IRS; it would become an instantaneous transaction as monies are moved in and out of company’s and individual’s accounts on a per transaction basis. The tax rate could also be varied to a virtual index of imaginary inflation data. The ability to restrict purchases should an individual exceed their projected ability to pay taxes, survive, or engage in commerce beyond necessities to prevent waste and fraud could be imposed by an algorithm. And from the government’s perspective, it would kill the illegal alien and labor movement where cash is used to bypass Big Brother’s oversight and taxation ability. Not to mention, good luck becoming a drug dealer in that environment.
To the average citizen, it might seem like utopia, where everything is covered including the injection of an indexed basic living wage into one’s account should employment availability or personal income dip in that person’s region. Economic growth declines below 2%? No problem, deposit $5,000 Digi-Dollars into everyone’s bank account. The economy begins to overheat? No big deal, increase prices to drain Digi-Dollars and restrict spending on non-necessities or luxury items.
To the sane man, it is insanity; crony capitalism with phony controls, profits managed by technocrats, and investments only allowed to appreciate should the HAL9000 algo permit prices to rise beyond their average historical limitations. With world governments splintering into wave of nationalism and trading blocs being shattered by populism, odds are this system will spread and be implemented in most of the civilized world by 2030; thus re-establishing a globalist banking cabal to manage prices, profits, and individual behavior with Adam Smith’s invisible hand being designed by Google or IBM.
God I miss the phone booth.
Got your mark yet?