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De Omnibus Dubitandum - Lux Veritas

Tuesday, July 18, 2023

CBDCs are Coming! CBDCs are Coming! – Swamponomics

CBDCs arriving soon, oil supply deficits, and shrinking bank lending.

@ Liberty Nation News

Governments and central banks worldwide are bullish on central bank digital currencies (CBDCs). They will be the new normal in the coming years. At first, these digital currencies will complement physical money, marketed as a benign scheme to compete on the international stage and prevent China from ruling the world. As the years go by, CBDCs will put the kibosh on cold hard cash, serving as a functional surveillance tool – and that future may not be too far away.

Invasion of the CBDCs

The Bank for International Settlements (BIS), a financial institution owned by member central banks, released the results of its December survey of 86 central banks. The study determined if they were working on the two types of CBDCs (retail, wholesale, or both), how the work is coming along, and what their motivations are for devising such a technology. BIS researchers learned that half are launching experiments for pilot CBDCs, with one-quarter beginning to pilot retail CBDCs. Not too many were engaged in wholesale CBDCs.

The most notable finding from the July 2023 report was that as many as 24 CBDCs could go live by 2030, buoyed by many developing economies that are itching for an advantage. By comparison, there are only a handful of CBDCs in circulation today: the Bahamas, China, Eastern Caribbean, Jamaica, and Nigeria.

“More than 80% of central banks see potential value in having both a retail CBDC and a fast payment system, mostly because a retail CBDC has specific properties and may offer additional features,” BIS wrote in the report. “The survey suggests that there could be 15 retail and nine wholesale CBDCs publicly circulating in 2030.”

In 2023, many advanced markets have been experimenting with CBDCs, such as Japan and Russia. The US, Europe, and the UK are still in the research phase of the process. Future generations, whether in America or overseas, will suffer the consequences of introducing government-approved digital currencies. For now, based on various polling, the public is adamantly opposed to CBDCs and the countries that have launched these digitized versions are seeing little adoption.

Got Oil?

The second half of 2023 will be a compelling time for international energy markets, particularly crude oil. Investors might not be showing concern, but there are growing expectations that a vast oil supply deficit is looming, as many producers have reduced output volumes. The only event that could prevent this from occurring is a worldwide recession. But who even knows if this will transpire?

According to the US Energy Information Administration’s (EIA) Short-Term Energy Outlook, oil demand will exceed supply in the year’s second half. In addition, the EIA anticipates that inventories will maintain a steady decline over the next five quarters. This, of course, will raise energy costs, with Brent, the international benchmark for oil prices, projected to climb to $81 per barrel this year and $84 a barrel in 2024.

The International Energy Agency (IEA) noted that global crude demand was robust enough to contribute to tighter stockpiles from July to December. While China’s economic recovery has been disappointing, the IEA says consumption trends remain strong. “Even in sluggish economic growth, China and other developing countries’ demand is strong,” IEA chief Fatih Birol told Reuters. “Taken together with the production cuts coming from key producing countries, we still believe that we may see tightness in the market in the second half of this year.”

Since the sharp selloff last month, crude oil prices have rebounded. West Texas Intermediate (WTI) and Brent have climbed nearly 6% this month to $76 and $80, respectively. Unfortunately, this could contribute to a higher headline inflation rate and bolster gasoline prices, which have surged close to 11% year-to-date.

Dude, Where’s My Banking Data?

The Federal Reserve presented the public with the good, the bad, and the ugly on the H.4.1 and H.8 data front. First, the positive development: US banks have witnessed deposit inflows of $104 billion, the second consecutive weekly jump. The bad news: Large bank loan volumes have diminished for two straight weeks, tumbling about $8 billion. The ugly: The central bank’s Bank Term Funding Program, which was launched after the collapse of Silicon Valley Bank and Signature Bank, rose again after falling in the previous week. The emergency lending facility continued to firm above $100 billion. Suffice it to say, the banking turmoil might be stabilizing, but there is plenty of risks that need to be monitored.

Read More From Andrew Moran

All opinions expressed are those of the author and do not necessarily represent those of Liberty Nation.

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