The following is a response to my beloved Papa-san, who’d sent me a piece on CBDCs (Central Bank Digital Currencies).
(!!! He’s 83. Sharp as. And picking things up quickly.)
It’s early 2021. This will be a pivotal year for the human species, as the dialogue between the ecos — economy and ecology—becomes increasingly pressing.
It’s worth noting that the root, eco-, comes from the Greek oikos (home).
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Hi, Dad, thanks for the article.
CBDCs are ultimately about tax collection. Bit of a “closing the barn door after the horse has bolted” thing, though. They are very, very late to the game. (India and Nigeria, lol.)
Everyone wants control of currency — nation state governments for tax collection, and all the rest for the phenomenon of “clipping the ticket” as they say over here (middleman fees) — whether it’s to get to be the Clipper in Charge, as it flows around, or to steer clear and avoid being clipped.
There are trade wars and currency wars going on right now, massive power plays, and none of us really knows what’s going on exactly, as it’s all happening behind the scenes.
We can, however, take a good guess at the players involved:
Every central bank in the world, led by the Fed
The BIS (Bank of International Settlements)
The IMF
The World Bank
The fund management giants (Blackrock/Vanguard)
Commercial and private banks
Wall Street brokerages and every financial market there is
Corporations — particularly the largest multinational ones, especially those with significant cash holdings
The Billionaires — particularly the tech ones
And, way, way off in the distance, creators and hodlers (sic) of cryptocurrencies. (Maybe. Someday. Though Saylor and Musk certainly did throw down the gauntlet this month! Influence is a power play, to be sure.)
Currency and money are simply utilities. They are neither good nor bad in themselves, any more than a wrench or a hammer is. It all depends on the purpose to which they’re applied. Intent is everything.
What has transpired is that both money and currency have been so grotesquely manipulated by means of various so-called “economic” systems and schemes in the 20th and 21st centuries, each more bizarre than the last, that peoples’ heads are now spinning.
As well they should be. There is, in fact, rampant insanity going on out there right now.
A few examples:
Quantitative Easing: a fancy name for the Federal Reserve and other central banks giving themselves permission to write bad checks, handing over responsibility for servicing this enormous debt to future taxpayers. (And not just in the States; virtually every country is doing this now.)
Economic stimulation checks (an extension of the above): has the side-effects of enriching the wealthiest, further impoverishing the poorest, and handing corporations piles of Monopoly bills to invest in/inflate the value of their own stocks. (Also: since when did high unemployment ever equate to higher incomes, hmm? Weimar Republic, here we come.)
Negative interest rates: if you keep your money in our bank, we will no longer pay you for the privilege of using it, nor will we guarantee that we actually keep what you give us. Actually, we will now charge you for letting us use your money however we want.
Derivatives: the securitisation of every conceivable thing, turning the entire world into a casino of bets upon bets upon bets, on weirder and more abstract things whose value is perceived to be increasing (or even decreasing) over time. This is now supercharged by “Fintech” and “DeFi” — cyberspeculation, on steroids.
Even normally “fiscally conservative” Australia has gone mad: The government now appears to be looking away as the biggest companies trade insolvently, and banks are beginning to write loans for just about anyone with a pulse (those were at the heart of the GFC in 2008, remember?). A few years from now, when those loans get called, some very surprised Aussies will be out on the streets. Right now, property prices are skyrocketing, everywhere save the cities. (People are leaving them in droves for better lifestyles, since they can now work from home.) And — get this — giant commercial and office building projects in the biggest cities are… going ahead. Also, since they sent the immigrants and exchange students home last year, fruit is rotting on the trees. There’s no one here willing to pick it anymore. Bonkers.
Meanwhile, as a globally interconnected species, whilst all this betting and war games nonsense is going on, along with a pandemic, we have changed virtually nothing significant about the way we continue to escalate the destruction of our own habitat, this beautiful earth. (And our interpersonal relations haven’t been doing any too well, either, particularly with War of the Ideologies everywhere we turn.)
We must find our way home to being humane humans on a healthy planet.
This economic house of cards will topple, as other empires have, but that doesn’t mean the end of us!
(A poisoned planet, though? Yeah, that might actually take us out, so we’d better do something about that. These “players” sure as hell won’t.)
OK, stepping off my soapbox now.
Love,
JP
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