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Central Bank Digital Currency

5965 Views 246 Replies 41 Participants Last post by  Cigars, 
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Anyone know anything about CBDC besides what it is?
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ralfy
Much of money has been digital for some time. One source states that only around 3 pct of money consists of FRNs and coins, and only because it's impractical to use them for big ticket items.

Much of money is created by commercial banks rather than the Fed, which itself is a private consortium of Wall Street banks. Nowhere close to communism.

Fiat currencies are used in capitalist systems for practical purposes, together with legal systems providing limited liability, etc. The same goes for money in general.

Money itself is essentially a promissory note, including bitcoin.

Money is part of credit, of which the largest component consists of unreported side bets. The notional value of those is said to be over $1 quadrillion, which gives new meaning to the idea of decentralization.
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ralfy
For gold and silver, there are only a few ounces per capita worldwide. Meanwhile, the same population wants higher wages, better returns on their investment, borrow and spend more, etc.

Increasing the value of each ounce is pointless; you might as well drop any way to create a standard.

Also, as pointed out earlier, gold and silver are promissory notes, just like money; that is, besides any applications that are not relevant when things fall apart.
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Explosive said:
Why is increasing the value of each ounce pointless ?

Please explain what makes gold and silver promissory notes.
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It's pointless because the purpose of a gold standard is to have a fixed amount and thus avoid increasing money supply.

Gold and siver are promissory notes because they have limited practical purposes, i.e., generally too soft and too heavy to be used for tools, armor, and weapons. What makes them practical is that they can be used as money because they're durable. And money is essentially a promissory note: a medium of exchange for trade.

That's why when things fall apart they become worthless. It's like that scene from the novel The Road, where a man and boy in a post-apocalytpic are looking for ammo and food. They find a box of coins made from precious metals, look at the coins momentarily, and then throw them away.

That's not to say that people should start throwing away gold and silver. Hold on to them for trade, but they won't save a capitalist economy that's needs more than physical media for exchange.
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Explosive said:
If gold were to appreciate in value, then that would obviously give more value to any currency tied to it. Letting it float rather than fixing it would be the way to go. I can't see how that would increase monetary supply, monetary value would rise and fall with the value of gold....... It would keep politicians more honest.

Gold and Silver are most certainly not promissory notes Promissory notes come with counterparty risk, Gold and Silver do not.

Rest assured that nobody will be throwing Gold and Silver away.
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It's pointless because the purpose of a gold standard is to have a fixed amount and thus avoid increasing money supply. If you let the value of gold float then you might as well not use it.

Also, about dishonest politicians, the bulk of money supply comes from people making loans in commercial banks. Look up "money multiplier". Worse, money is part of a credit system dominated by what are essentially unregulated sidebets. The notional value of that worldwide is over a quadrillion dollars.

Gold and siver are promissory notes because they have limited practical purposes, i.e., generally too soft and too heavy to be used for tools, armor, and weapons. What makes them practical is that they can be used as money because they're durable. And money is essentially a promissory note: a medium of exchange for trade.

Where's the counterparty risk? They lose value when things fall apart. It's like that scene from the novel The Road, where a man and boy in a post-apocalytpic are looking for ammo and food. They find a box of coins made from precious metals, look at the coins momentarily, and then throw them away.

That's not to say that people should start throwing away gold and silver. Hold on to them for trade, but they won't save a capitalist economy that's needs more than physical media for exchange, and they become worthless in the long term when SHTF, i.e., total collapse. That's why the man and the boy threw the coins away: there's no more trade.
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BoboLyman said:
View attachment 508985
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I think various economies have been mostly cashless for decades. In the U.S., for example, only around 3 pct of money consists of FRNs and coins.

It's the same globally:

From Liquidity Pyramid - The Great Credit Contraction
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Ghost of Casey Jones said:
Gold WOULD BE the standard. I recall reading somewhere, that a dollar - the currency name - was corrupted Latin or Spanish for Ounce. One ounce of gold.

It crept upward, but slowly...until Roosevelt II took office, an ounce of gold was $20. There it had stayed for generations.

Roosevelt, with the new Federal Reserve backing him, first banned gold and then devalued the dollar. He paid $20 an ounce for surrendered gold (by no means all of it) and then revalued it at $35. And we thought political corruption was a modern thing...

The point of a gold-based currency is, the ounce of gold speaks for itself. You can denote dollars in gold, if you like; but there would be no floating or revaluing.

If an ounce of gold got to be, say, $10,000...that's the way it is. No reason a small unit of gold couldn't be sandwiched in circulating coins. Nor is there any reason silver couldn't be used on smaller-value coins.

Mostly, there is no reason why $100 gold pieces couldn't be floating around. People seldom carry more than a couple hundred in cash, these days...and there likewise is no reason why credit or account cards (like AmEx) couldn't continue as payment options.

But paper money is the route to destruction; and fiat currency is societal suicide.
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The point of a gold-based currency is to keep money supply fixed. If you're going to increase the value of gold to increase money supply, then it's pointless to have a gold-based currency.

Paper money was used centuries ago by mechants because they realized that it was not only impractical but even hazardous to bring large amounts of gold around across lengthy distances to trade big-ticket items with other merchants. They discovered that it was safer to use bank notes, especially given the point that generally all merchants were using banks to secure their gold.

Later, bankers discovered that most of the gold was never touched, so they lent it to merchants who needed credit, and like the rest, preferred bank notes for reasons given above.

After that, because merchants didn't want others to know how much gold they had, and bankers protected them as well, then bankers discovered that they could lend more using bank notes than there was gold in vaults. That was also inevitable because more money was needed than there was gold available. From there, depositors demanded a cut on the action by receiving interest on their deposits instead of paying bankers to secure their wealth.

From there, to smoothen transactions between merchants and bankers bank notes were standardized.

Given such, that "route to destruction" and "societal suicide" started centuries ago, and involve merchants and bankers.
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ralfy
Themanwithnoname said:
No sir
Gold, silver, iron ore, wheat, cattle and such are NOT 'promissory notes'.
They possess innate value and are the OPPOSITE of fiat.

Please stop confusing people.

Also: Can we please stop pointing to FICTIONAL stories with 6 people left in the world and acting as if it is a real scenario?
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I was talking about gold and silver, not iron ore, wheat, and cattle.

Gold and silver have innate value: they're good for jewelry, decor, and money. Beyond that are certain chemical applications, dental filling, and non-corrosive contact points for AV and hospital equipment. If gold and silver can replace iron ore, wheat, and even cattle, let me know.

You don't need six people. You can have six million, and the point still stands.

As for that being fictional, remember what happened in certain places during WW2, or when hyperinflation took place, such that they started charging large amounts for a loaf of bread? For one gold brick, you get a sack of rice.

Never going to happen? Try to say that aloud in a survivalist board.
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ralfy
Themanwithnoname said:
Quite simply:

No.
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The fact that you have to use dollars to measure the value of gold shows your arguments falling apart.
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ralfy
Explosive said:
Can't speak for Themanwithnoname, but I use fiat dollars to show the value of gold, as that's the official way gold is valued, and it's what most people understand.

It's difficult to ascertain the true value of PM's because of manipulation.
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The value of money is ultimately ascertained given availability of resources. That's why in "fictional" situations it becomes worthless.
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Explosive said:
My point is that many people do not think CBDC's will make all other forms of money irrelevant, and neither do governments worldwide, they are hoarding gold like there is no tomorrow.

I am confident that truck dealers will be happy to accept gold as payment, Gold has been highly valued for many thousands of years, nothing has changed,
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Gold has been valued mainly because it's pretty to look at and rare, and with durability a perfect medium for coins. Otherwise, it's too soft or heavy to be used for tools, armor, or weapons. Other than dental filling, its main applications involve some components for electronic equipment and chemical processes.

The problem is that as centuries went by, merchants found bank notes referring to gold they deposited to be more convenient for trade, and safer. And with gold lacking plus bank secrecy bank notes themselves were used.

After that, digital currency was used because bank notes themselves became impractical to use. Imagine paying cash for a multi-million dollar office complex. That's why only a fraction of money worldwide consists of cash.

Later, as diminishing returns in resources set in more began to realize that the dollar value of the materials used to make cash exceeded the value that they represented, especially coins.

In which case, to those who want a return to "honest" money, or even the use of gold and silver, that's going to happen, but not in the way most expect.
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FARM HAND said:
The Jews bribed the Nazi guards at the border with gold coins
Pirate ships had gold as their most valuable cargo of transport
Kings horded gold coins
India, China, and Russia have been buying gold in the last ten years by the metric ton, guess why?
Our government (Roosevelt) STOLE the peoples gold with an executive order, to turn it in!

Our government wants you to turn in your guns too. Why? Because it makes you easier to control.

Why do they want your gold? Because it makes you easier to control, you can leave this country with your gold and start over ANYWHERE else in the world.

Case closed, you guys can argue about until you turn blue!
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Start over what and where?
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ralfy
Explosive said:
I think EVERYONE understands the value of gold. I have trouble understanding why some people have a problem with it. What am I missing ?
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Its value is as a medium of exchange. When there's less to exchange, then its value goes down.
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Velvet Elvis said:
Not directed at anyone specifically.

Ask yourself a few simple questions.

Does government wish to achieve absolute control over the populace?

Does controlling the money allow them to achieve that?

Does allowing PMs and cryptocurrency to remain in use allow government to achieve this absolute control?

Does banning PMs and cryptocurrency while forcing everyone into using CBDCs allow them to achieve this absolute control?

Does it seem logical that a government that desires to remove PMs from circulation in order to achieve absolute control might buy up as much gold as possible?
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That's logical, but people move towards the same for practical reasons, i.e., from PMs to bank notes for practical reasons, and from bank notes to digital for the same. When there's less to exchange, they go the other way, and given "fictional" scenarios given by preppers and survivalists a point where one ends up bartering.
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jea said:
Some look at gold purely as an investment. Others, as insurance. Each seem to want to argue their points.

The important thing to me about gold: It's something tangible I own, that I can hold in my hand. It's no on else's liability. There's no counterparty risk. My personal feeling is that is more insurance than it is an investment. I don't care if the price is up or down one week or ten years from now. At some point, I can sell it and get something for it. More than I can say about the 1s and 0s in my 401(k) right now.
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The counterparty risk is that its value is based on what you can get for it.
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Explosive said:
Many people don't know the difference between an investment and insurance.... The term I use to describe gold is wealth preservation. ( insurance )
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Gold doesn't provide wealth preservation because its value is dependent on what can be bought, just like money.
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Explosive said:
There is no counterparty risk to holding it. it maintains it's value for ever.
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Intrinsically, it's good for jewelry because it looks pretty and good for money because it's durable and rare. Meanwhile, many other things are much more valuable than it but don't last as long.

In short, its value is as a medium of exchange. Given that, its value goes up and down and is measured in dollars, and after that based on what's available for trade. And if there is less of the latter, then its value drops significantly.
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ralfy
Explosive said:
It provides perfect wealth preservation. If someone is unreasonable then shop elsewhere.

Fake money ( fiat currency ) always returns to it's intrinsic value of 0. There is no comparison.
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When things fall apart, its value drops significantly. That's because it's a medium of exchange, i.e., it has worth as long as there are many things to trade.

"Fake money" was used because it was too difficult and dangerous to bring large amounts of gold around. This was already explained to you in a previous post.
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ralfy
jea said:
If I can’t get the price I want for my gold, I don’t sell.

If my bank becomes insolvent, the company I own stock in goes bankrupt or the bond I hold defaults, I lose my money, right there on the spot. $0 is what I get.

If inflation continues and the dollar continues to be devalued, every dollar denominated investment I own goes down in value. With the exception of a few brief periods during recessions, the value of the dollar has steadily declined. With the impending end of dollar hegemony, that decline will only accelerate.

No matter what happens, the gold I hold in my hand will retain its VALUE. That’s why it’s money, it’s a store of value. It’s of limited supply. I can always exchange it for something else of value, at a time of my choosing.
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That's exactly my point: the intrinsic value of gold is whatever price is offered for it. That's why your last paragraph contradicts your first. Gold doesn't retain its value because its price can change.

That's why it's not a store of value. Rather, it's valuable because it is of limited supply, which with durability makes it great as a medium of exchange.

But that also means its value is based on what's available for exchange. With business as usual, you can wait for its price to go up, and then exchange it for...dollars. Which is ironically the measurement you use to refer to its price.

And what happens when there's less trade?
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ralfy
Themanwithnoname said:
Sir I believe you are quite confused and you are not making sense.

You say you are not talking about other commodities, and then in the next breath you type that gold and silver have innate value.

So you DO understand that your earlier statement is incorrect...?

Yes, there are occasionally times when (due to starvation mainly) the price of certain goods rise higher due to scarcity.

This has nothing to do with gold and silver possessing intrinsic value not dependant upon a fiat system.
It is also why it is smart to own food production.
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What I said is that the intrinsic value of gold and silver is their usage. Beyond certain applications like dental filling, they're too soft or heavy to be used for tools, armor, or even weapons. That's why their use is mainly for jewelry, decor, and money.

Why money? Because they're durable and rare, which is great for coins because that means you can't make a lot of them, they'll last very long even though they're passed around many times, and they are very difficult to forge. On top of that, they're soft enough such that you can mold them into coins.

What's money? It's a medium of exchange. That means its value is based on what's available given trade. Have lots of rice available? Then with one gold coin you can buy lots of sacks of rice. Only a bit of rice remaining? With one gold coin, you'll probably get a pound of rice.
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Explosive said:
It may go up and down a bit when measured in dollars, but that's be cause the dollar is not a stable currency any more. The dollar lost it's stability when it was decoupled from gold in 1971.

Gold and Silver is the only money with a history of long term stability. Every other form of money has become worthless.
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What do you use to measure the value of gold outside currencies? What's available for trade.

You can buy lots of oil with one gold coin. But when there's a lot less oil....
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