My concern is that this is a trial run for an official CBDC that will eventually replace cash.
Apply some critical thinking on this. Governments and corporate elites worldwide are salivating over the level of surveillance and control that a CBDC will enable.
The federal government cutting off financial services for legal but disliked industries such as the gun industry (see the Obama admin's Operation Chokepoint).
The Canadian government freezing the bank accounts of those who supported the trucker protest.
Not directly related to finances or electronic surveillance, but some government fuckery greatest hits that actually happened:
- Kidnapping hobos and force feeding them LSD
- Intentionally infecting people (mostly black) with syphilis
- Feeding irradiated oatmeal to mentally handicapped children
- Obama personally ordering the execution of an American citizen without trial and having the military carry it out (and killing the target's 16-year old American citizen son as well)
Not revealed in the last 5 years.
> The federal government cutting off financial services for ...
Not revealed in the last 5 years. Was this subject of an actual conspiracy theory?
> The Canadian government freezing the bank accounts of those who supported the trucker protest.
At least this is within 5 years. I can't judge if this was an actual conspiracy theory or not ( I don't think so ).
> - Kidnapping hobos and force feeding them LSD
> - Intentionally infecting people (mostly black) with syphilis
> - Feeding irradiated oatmeal to mentally handicapped children
> - Obama personally ordering the execution of an American citizen ...
All of those AFAIK not revealed in the last 5 years.
Next thing you know somebody comes up with the moonlandings and JFK.
People who doubt the government and especially the fiat monetary system usually end up as "gold bugs", they start preparing for financial collapse by purchasing physical gold. Before the 2008 financial crisis, I was involved in gold circles online and everybody there knew a huge crisis was coming and they were buying as much gold as they could. Now, the price of physical gold (and many other commodities) are determined by the prices on the Comex futures exchange, which are under the control of an oligarchy of big banks.
During the financial crisis and the years after, most gold traders and gold bugs noticed that the gold price would drop every day about 09:00 on the New York Spot market, and everybody was talking about how the big banks were illicitly manipulating the gold price to try to keep it down. Of course this talk was dismissed by uninvolved as loony conspiracy theories, together with every other insulting and dismissing adjective that commenters here are so fond of.
But it turned out that the conspiracy was true, and in 2022 a couple of the bankers' fall guys were sentenced, and JP Morgan agreed to pay $920 million in fines[1]:
"The evidence at trial showed that between approximately May 2008 and August 2016, the defendants, along with other traders on the JPMorgan precious metals desk, engaged in a widespread spoofing, market manipulation, and fraud scheme. The defendants placed orders that they intended to cancel before execution in order to drive prices on orders they intended to execute on the opposite side of the market. The defendants engaged in thousands of deceptive trading sequences for gold, silver, platinum, and palladium futures contracts traded through the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX), which are commodities exchanges operated by CME Group Inc."
[1] https://www.justice.gov/opa/pr/former-jp-morgan-traders-conv...
The same things are going on all the time, sometimes the perpetrators are banking giants, sometimes the government or parts of government, sometimes tech giants, sometimes it's all of them together, sometimes other perpetrators.
#1 Don't bet more than you're willing to lose.
#2 The market can stay irrational longer than you can stay solvent.
These are widely known and I make no claims of originality. However, your story about gold market manipulation brings up a corollary to my #2 rule that I do take credit for: Never underestimate the extent to which governments and other vested interests will go to in order to keep markets irrational for as long as possible.
ACH and even check clearing are already largely performed by the Fed today!
Such as what?
>Apply some critical thinking on this. Governments and corporate elites worldwide are salivating over the level of surveillance and control that a CBDC will enable.
How is this any different from the current system? Your cash is 99% digital anyway with basically every transaction completely monitor-able to the Feds under the right circumstances. Don't see how this situation would change much.
https://www.federalreserve.gov/central-bank-digital-currency...
That is the most important concern. Not even crypto can beat cash for convenience and anonymity.
But having a way to transfer money outside of large corporations and instead through a government regulated service is a good thing.
The fed may have a small advantage you are willfully overlooking.
If we accept some minor inflation, then the fed is always setting the rate a bit too low rather than too high.
In other words. Whatever the Fed does, it is mostly irrelevant.
On the other hand, if there is actually some leeway and elasticity then monetary policy can actually result in increases in economic welfare. In this scenario we want to see some utilitarian meddling.
This isn't true. Private currencies exist(ed) and are afaik still legal.
The reason we put governments in charge of our money is that up until about a decade ago it was either the government or a corporation as a decentralizes currency was not really implementable. Do you want to get paid in amazon coins only redeemable on amazon? No, you do not.
>interest rate meddling by govt contractor federalreserve
You need to do that. Any currency needs some mechanism to control issuing. If not the government who else could do that?
For most of my life, those were ancient history or theoretical. Then in 2009, something changed.
And ever since then, I've seen nothing less than the most zealous propaganda campaign to undermine those... it's bizarre to watch it unfold. I keep side-eyeing everyone, wondering if I'm the only one that sees it. Sure, it doesn't help that the cryptocurrency people are whackjobs that might have screwed it all up without any outside help. But I guess they couldn't trusted to do that, so the help was provided.
Saying that it's "legal" doesn't change the fact that if someone were to come up with a private currency, gigantic forces, government and not, would be arrayed against them to put an end to it.
> Any currency needs some mechanism to control issuing. If not the government who else could do that?
I think the implication here is: who could be trusted to do it in a way that doesn't favor some at the expense of others?
Thousands of private currencies exist right now.
Nobody would care about your currency, since it is useless, and as such worthless. A centralized currency is an enormous social asset. Nobody wants private currencies.
>who could be trusted to do it in a way that doesn't favor some at the expense of others?
Just try to imagine a currency controlled by amazon. Do you think they won't do some hyperinflation making you poor once a decade?
The controller of a currency has enormous power. If the government can't handle it nobody can.
Do you think that the US government and the fed don't do this? You don't see it, of course, because they also report the numbers you use to decide if there is inflation.
And who says that it has to be controlled at all, in the sense that some singular entity controls it, rather than an algorithm?
> The controller of a currency has enormous power.
Yeh, and it's no less a problem when it's the government rather than Amazon.
> If the government can't handle it nobody can.
That's always been my point.
Inflation is an objective measure it is the price increase for a certain basket of goods. Yes, you can fake it to a certain extent, but this is true for everything.
>You don't see it, of course
What? That is totally false. Inflation is one of the easiest metrics to spot.
>And who says that it has to be controlled at all, in the sense that some singular entity controls it, rather than an algorithm?
Practicality. Either the algorithm is extremely simple (BTC) or you will ruin your economy.
>Yeh, and it's no less a problem when it's the government rather than Amazon.
Total nonsense.
You also have to be resilient to attacks on your currency and an algorithm gives your oppponent certainty on how you will react. You need human control at some point.
Money wasn’t always the sole dominion of government. There is a reason we’ve ended up at this point. I find it to be entirely reasonable.
Most money in the US already consists of electronic records in banks. Making bank transfers work better is fairly orthogonal to whether ATM’s work and retailers accept cash.
I think you should reconsider your stance.
The amount of people rooting for big brother here on HN lately is frankly terrifying.
As convenient as Apple Pay is, I would not vote for a cashless system. I am just confused that very specific ideas of how this hypothetical system is going to work and am not sure where these come from or why it has to work the way people say and not in a more accountable less abusive manner. Expiring money seems patently absurd so why a central bank would consider it seems so outlandish to me at least.
Some countries, like Costa Rica, do this with cash, but with a much longer timeframe. Every 10 years or so they launch new banknote designs, and the old ones are gradually removed from circulation, until can only be exchanged at the banks and eventually lose their value by becoming "demonetized".
I just don't see how this is realistic. It is basically impossible to enforce.
If you know your money will expire you will spend it, thus stimulating the economy. We also can’t have the dirty proles save their way to a higher social class.
Eswar Prasad, WEF Annual Meeting of the New Champions, June 2023
The above has some chatter about non-US nations exploring the expiry/programmability aspects.
Also, nothing stops people from buying the goods in question by using a payment service provider/bank that provides a layer on top of the CDBC and automatically circulates the money for you behind the scenes to avoid the expiry.
> We also can’t have the dirty proles save their way to a higher social class.
I don't know what you mean by this. Rich people spend their money at a slower rate than poor people so the rich would be disproportionately impacted by this. Someone living paycheck to paycheck isn't going to have much money that can expire to begin with.
The idea isn't new.
This is different from a coupon that expires instantly. That is a terrible idea. Don't do this.
Also, the idea of demurrage currencies is to replace the devaluation via inflation with a nominal fee so it is possible that in countries with high inflation rates, the new currency would end up losing less value over time simply because it maintains price stability easily.
Edit: btw. His theory is dated in the sense that Keynes and Dieter Suhr have an updated interpretation. With a hint of Fisher Black you are going to get one of the most interesting economic theories that can explain most of the suffering in the world based on very few assumptions. The money and land reform policy proposals still remain relevant today.
Whilst many HNers were celebrating UPI as the payment rails from India, it is almost the same thing as FedNow and is planning to put their own CBDC on UPI called E-RUPI [3] taking all the same valid concerns that I have mentioned.
Do you really want this?
[0] https://www.pymnts.com/cbdc/2022/nigeria-cuts-atm-cash-withd...
[1] https://reclaimthenet.org/digital-euro-spending-saving-limit...
[2] https://bfsi.economictimes.indiatimes.com/news/policy/digita...
[3] https://indianexpress.com/article/explained/what-is-e-rupi-d...
A recent example of how this might be relevant is with the protests in Canada that lead to the freezing of the protesters’ bank accounts by the government. While I don’t agree with the protesters, the idea of the government freezing their accounts is alarming. After seeing such control exercised, it’s hard to be excited about a cashless society.