CBDCs are Coming! CBDCs are Coming! – Swamponomics

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

By Andrew Moran July 18, 2023 @ 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.

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

How Congress Should Reform the Fed

Alexander William Salter  – May 18, 2023 @ American Institute for Economic Research

It’s very difficult for elected officials to hold the Federal Reserve accountable. Is that a problem? 

There’s a strong counter-majoritarian tradition in American politics. The Constitution itself strictly limits what simple majorities, acting through their representatives, can accomplish. Contemporary central banking’s “democratic deficit” could be a feature, not a bug.

While we should always be wary of populist passions, the Fed’s insularity from the political process plausibly creates more problems than it solves. No less an economist than Milton Friedman thought that the Fed should be brought under the supervision of the Treasury or Congress. Friedman worried the central bank’s “independence” made it a law unto itself, sheltered from the consequences of its habitual mistakes. As the economy struggles with historic inflation and a wave of bank failures — both of which the Fed should have prevented — it’s worth considering alternatives.

Constitutionally, the Fed is a creature of Congress. The legislature created the Fed in 1913 not as a substitute for the gold standard and the National Banking System, but as a complement. The Fed was supposed to serve as a quasi-public clearinghouse to facilitate emergency liquidity transfers between banks to make the US system less panic-prone. But the onset of World War I spelled the end of this relatively limited mandate. The Fed began experimenting with monetary policy powers to support the market for government debt. Thus began a process of mission creep that resulted in the Fed becoming what its earliest proponents promised the public it never would: a central bank.

It’s time for the legislature to re-assert its control. The Fed’s recent dalliances with social and environmental policy have nothing to do with its legal grant of authority. Climate change and systemic inequality are valid policy areas for the United States Congress, but unless and until it says otherwise, not for the Fed. Hence Congress’s first order of business is passing legislation keeping the Fed within its legally prescribed lanes.

Second, Congress should separately crack down on the Fed’s experimentations with a central bank digital currency (CBDC). This is a dangerous technology that would give the government unprecedented access to and control over private financial transactions. CBDC would not meaningfully improve the operation of monetary policy or the pursuit of financial stability. All it would do is grant central bankers the power to redirect the flow of commerce by, for example, selectively processing payments, or debiting accounts to stimulate spending. Congress should pull the plug on the Fed’s pilot program and make it totally clear that CBDC is not permitted, absent enabling legislation.

It’s also time for the legislature to reconsider the dual mandate. There’s no need for the Fed to focus on full employment separately from price stability. In a fiat money economy, aggregate demand (nominal spending) stability is all a central bank can reasonably influence. And price stability is a consequence of aggregate demand stability. (Yes, the possibility of supply shocks complicates this. But such shocks are by nature temporary, and historically are much rarer than aggregate demand instability as a source of economic malaise.) Congress should accordingly narrow the Fed’s mandate to keeping the dollar’s purchasing power steady and predictable.

Finally, Congress needs to fix the Fed’s bank oversight and last-resort lending policies. The Fed is supposed to regulate banks and discount loans when the need arises. It’s very bad at both. Fed regulation has not made the banking system safer. If anything, it’s contributed to “too big to fail,” which results in recurrent crises. 

As for discounting, the Fed refuses to make any serious distinction between the illiquidity and insolvency of its counterparties. Making emergency funds available to the latter rewards the reckless bank behavior that gets us into trouble in the first place. Congress should narrow the Fed’s regulatory concerns to maintaining adequate bank capital. It should also consider abolishing the discount window entirely. Direct loans are unnecessary. Open-market operations can keep the financial system liquid.

Whether we like it or not, the Fed is one of the most important — if not the most important — economic institution in the country. It must be made to serve the public interest. The Fed should adhere to the rule of law. Right now, it only adheres to the rule of central bankers. A congressional course correction is long past due.

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Alexander William Salter

Alexander William Salter is the Georgie G. Snyder Associate Professor of Economics in the Rawls College of Business and the Comparative Economics Research Fellow with the Free Market Institute, both at Texas Tech University. He is a co-author of Money and the Rule of Law: Generality and Predictability in Monetary Institutions, published by Cambridge University Press. In addition to his numerous scholarly articles, he has published nearly 300 opinion pieces in leading national outlets such as the Wall Street Journal, National Review, Fox News Opinion, and The Hill.

Salter earned his M.A. and Ph.D. in Economics at George Mason University and his B.A. in Economics at Occidental College. He was an AIER Summer Fellowship Program participant in 2011.

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The War Being Waged Against Financial Freedom

by Dr. Joseph Mercola April 22, 2023 

Finance guru Catherine Austin Fitts warns that central bank digital currencies (CBDCs) are part of a plan to end all currencies and establish a slavery system

CBDCs will rapidly usher in an era of taxation without representation, leading to the end of liberty

Fitts believes that a deliberate takedown caused Silicon Valley Bank to collapse, in an effort by a variety of players to panic the public and cause a banking run

By creating a banking run, many will take their money out of small banks and put it with the central banks that are at the root of the problem

Leaving the banking system isn’t the answer — finding a good local bank or credit union, and using cash, is

In The Last American Vagabond video above, you can watch Agustín Carstens, general manager for the Bank of International Settlements (BIS), spell out exactly why globalists are promoting central bank digital currencies, or CBDCs, so heavily.........................To Read More...