Central bank digital currencies (CBDCs) pose a foundational threat to America’s economic systems with absolutely no upsides, according to a recent analysis from the Cato Institute, which stressed that a U.S. CBDC will threaten citizens’ “core freedoms” from financial privacy to personal liberty.
Even though there are no valid reasons for the U.S. government to issue a CBDC when “the costs are so high and the benefits are so low,” significant efforts are being made by government officials and central bankers to launch the digital currency “in a bid to solidify government control over payments systems,” said the institute’s assessment report published Tuesday.
“As entrenched as this effort may already be, a U.S. CBDC would ultimately usurp the private sector and endanger Americans’ core freedoms.
“Therefore, it should have no place in the American economy. Congress should explicitly prohibit the Federal Reserve and the Department of the Treasury from issuing a CBDC in any form.”
While the Federal Reserve has not made any definitive plans or fixed a timeline regarding the launch of a CBDC, the agency has not concealed its enthusiasm for the project. Purported features like “safer” and “faster” are heavily touted, whereas focus on cons are rather limited.
The Biden administration has also thrown its support behind the CBDC project, releasing a paper last September analyzing the possibilities of introducing a digital dollar.
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“If the United States pursued a CBDC, there could be many possible benefits, such as facilitating efficient and low-cost transactions, fostering greater access to the financial system, boosting economic growth, and supporting the continued centrality of the United States within the international financial system,” said the White House Office of Science and Technology Policy detailing the technical framework possibilities for a U.S. CBDC.
Financial Freedom and Privacy
The public sentiment in the United States is in the majority against introducing a CBDC in the country, evidenced by over two‐thirds of the 2,052 comment letters written by concerned citizens to the Fed opposing its plans for a digital dollar. Based on CATO analysis, commenters were concerned about CBDCs posing “a substantial threat to financial privacy, financial freedom, and the very foundation of the banking system.”
As a CBDC gives “the federal government complete visibility into every financial transaction by establishing a direct link between the government and each citizen’s financial activity,” the project is a direct attack against basic privacies as protected by the U.S. Constitution.
Any buffer—currently provided by institutions like banks and payment services—between the average citizen’s financial activity and governmental intrusion would immediately cease to exist as “all financial data would be only a keystroke away.”
Such unrestrained access leads to the inevitable establishment of governmental control over such activities, and it could be “preemptive (prohibiting and limiting purchases), behavioral (spurring and curbing purchases), or punitive (freezing and seizing funds).”
For example, the government could limit purchases to “essential” goods during state-imposed lockdowns, impose gun control, or even freeze an individual’s ability to access their own money.
“Aside from the basic programmability that a CBDC would offer for social and political control, one of its most common features is the ability to pay both positive and negative interest rates to curb and spur purchases,” which is impossible with cash—one of the main reasons why CBDC proponents are calling for eliminating cash from the system.
Free Markets Endangerment and Cybersecurity
Federal Reserve vice chair Lael Brainard had said that if CBDCs were widely adopted, it would disrupt the entire banking system because people would make direct central bank deposits bypassing retail institutions.
Although Fed researchers claim CBDCs offer a “helpful competition to the banks,” CATO concludes that the most probable outcome will be people leaving traditional banks as “it is difficult (if not impossible) to compete with the government.”
In such a scenario, CBDCs will have a monopolistic hold over the market. CATO pointed out that this is one of the reasons why governments around the world have been keen on eliminating alternative payment avenues like cryptocurrencies.
Similar to crypto, a disadvantage of using CBDCs is that they are prone to cybersecurity breaches and malicious hacking. A centralized digital dollar makes a very “attractive target for cyberattacks by giving threat actors a prominent platform on which to focus their efforts.”
While attacks on banks are not uncommon, it pales in significance when a CBDC breach exposes financial details of 333 million Americans.
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FedNow and CBDC
On March 15, the Federal Reserve announced the FedNow Service, which will start operating in July. FedNow offers a nationwide “instant payment solution” for participating financial institutions and their industry partners. Those using the service can “send and receive instant payments at any time of day” with full access to funds immediately.
Fed governor Michelle Bowman said last year that FedNow could weaken CBDC-resistance via offering some of the same basic services of a digital dollar—a first step toward full CBDC adoption.
“FedNow appears to be a prototype CBDC,” Jordan Schachtel, publisher of “The Dossier” on Substack stated in a tweet. “While instant, 24/7 payments seems good, there’s implications to leaning into credit-based system. FedNow can quickly transform to a surveillance system.”
CATO concludes the report by recommending Congress to limit the Treasury Department’s authority to expand existing offerings and prohibit the agency from issuing a CBDC, and offering or maintaining accounts on behalf of individuals. This is done to prevent the agency from “further encroaching on the private sector” despite promises of financial inclusion and faster payments.
Article cross-posted from our premium news partners at The Epoch Times.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.