by Jim Rickards, Daily Reckoning:
For the past two years, I’ve been warning about the emergence of central bank digital currencies (CBDCs), or as I like to call the U.S. version, “Biden Bucks.”
Can good old-fashioned American federalism stop them? We’ll consider that possibility today.
If you’re a new reader who isn’t familiar with Biden Bucks, or an existing reader who could use a reminder, the Biden administration is planning to create a purely digital dollar.
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These Biden Bucks would have the full backing of the U.S. Federal Reserve. They’d replace the cash (“fiat”) dollar we have now. And if Biden got his way, they’d be the sole, mandatory currency of the United States.
What does this mean for you? It would make your money less truly your own. It would be subject to government control.
We Just Want a More Efficient Payment System!
Biden Bucks are being peddled as a more efficient and convenient form of money. They say they’re just simplifying the payment system and making it more efficient. It’ll be much more convenient than the convoluted system we have today.
And they’re actually right about that. A digital dollar will be simpler, more efficient and more convenient to use.
Assume you buy gasoline at your local gas station. You pay with a credit card, which begins a payment process involving maybe five separate parties.
These include the merchant from whom you bought the gas, the credit card company, the bank and an intermediary called a merchant acquirer (no need to explain what a merchant acquirer does for today’s purposes, but just realize that it’s part of the payment system).
Ultimately the bank that issues your credit card sends you a bill, which you pay. You also pay a fee, maybe 3%, all to buy the gas.
But with a central bank digital currency, you could simply pay for the gas with an account you have at the Fed.
You would get rid of all the middlemen. You could bypass the merchant acquirer, the banks and the credit card company. A digital dollar would also eliminate many of the fees we currently face.
So yes, the payment system would be faster, cheaper, easier, more streamlined and more secure. What’s not to like as far as you’re concerned?
Well, if you’re concerned about your personal privacy, everything.
We Can’t Let You Destroy the Environment
Imagine this. To further advance his Green New Scam, what if Joe Biden and his cronies decided that gasoline needed to be rationed?
Your Biden Bucks could be rendered useless at the gas pump once you’ve purchased a certain amount of gasoline in a week! You want gas, but all you get is a one-word message: Declined.
How’s that for control?
Biden Bucks would create new ways for the government to control how much you could buy of an item, or even ban purchases altogether. It would keep score of every financial decision you make.
In a world of Biden Bucks, the government will even know your physical whereabouts at the point of purchase.
It’s a short step from there to putting you under FBI investigation if you vote for the wrong candidate or give donations to the wrong political party. If any of this sounds extreme, fantastical or otherwise far-fetched, it’s not.
Look at all the ways the government has abused its power to target its opposition in recent years.
Government Always Wants More Power
From unconstitutional “lawfare” against Trump, to the jailing of harmless J6 protesters who did nothing more than walk around the Capitol taking selfies (I’m not talking about those who committed violence that day, who should be punished to the full extent of the law), the federal government has overstepped its bounds.
Several months ago, the FBI and Financial Crimes Enforcement Network (FinCEN) sent letters to U.S. banks asking them to identify and provide a list to the government of customers using Zelle, Venmo and similar payment channels who mentioned “MAGA,” or “Trump” in their message traffic.
They also asked for details on bookstore purchases of religious articles including Bibles. Finally, they asked for details on those shopping at Cabela’s, Dick’s Sporting Goods or Bass Pro Shops, presumably on the view that those are places to buy guns and ammo.
This is a clear-cut violation of the First Amendment (free speech, freedom of religion), Second Amendment (right to bear arms) and Fourth Amendment (no unreasonable search and seizure).
It’s not a crime to write “MAGA,” etc. and therefore there’s no reasonable basis for suspecting a crime, and therefore no right to get the information without a warrant, which requires a judge. Any judge would likely reject the warrant request since there’s no probable cause.
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