"Joe Biden is no longer seen as competent and effective. He’s no longer seen as a good commander-in-chief.   ~Chuck Todd,  NBC

 

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January 24, 2022
 The cryptos are getting a pounding.
Bitcoin are trading at $32,500 each.   A far cry  from the  high of $67,000+.

    Bitcoin and other crypto currencies are fiat just like the U.S. dollar in which they are denominated.  Gamblers are disappointed at the moment because more people are bailing out than are buying in.  Is it a rout or will the tide turn and the cryptos fall back into favor?

   As we mentioned yesterday Russia's central bank has called for the banning of bitcoin.  And in the U.S. the Federal Reserve has just issued a "white paper" for the public and money professionals to mull concerning the possibility of the Fed issuing an official digital dollar.  (CBDC = Central Bank Digital Dollar.)  We have until the end of May to respond. 

     "It just makes sense," say promoters of the scheme.  "The bulk of daily commerce is conducted in digital dollars (charge and debit cards, etc) so why not go all out and do business in digital dollars entirely?  People will appreciate the convenience of a cashless society."

       It's true that many people brag about never carrying  cash anymore.  But a Fed digital dollar would be only another version  of the present fiat currency which is technically an IOU.  All paper dollars are NOTES - by definition IOUs - officially signed by the U.S. Treasurer and the Treasury Secretary, signifying that the United States owes the Federal Reserve the amount printed on the note.  The Fed pays the Bureau of Engraving and Printing the same amount for a skidload of $100 bills as it does for a skidload of $1 notes.  Because they are, by law, "legal tender"  they are accepted in payment for goods, services, taxes, etc.  They are also a means of making purchases anonymously.  The purely digital Fed dollar could  not insure anonymity because of its purely electronic nature via computers. 

       NOTE:  Coins are a different critter.  The Fed buys them from the mint at face value.  Dimes, quarter-dollars, and half-dollars are copper-nickel tokens, although in their hey-day prior to 1965,  these coins  contained 90 percent pure silver.   The intrinsic value of presently minted U.S. coins is the  price of the base metals involved in their manufacture.  For instance,  the metallic value of the modern quarter-dollar is about 25 percent of its face value.

        The Fed's issuance of the questionaire on the matter last week in no way indicates it will go digital with the dollar.  The Fed is investigating the possibility and it  could introduce another issue that  splits America down the middle.  Half the country may endorse the digital dollar while the other half may insist on a return  to something resembling the sound-money mandate called for by the U.S. Constitution. 

         Sound money!  Has a nice ring to it, doesn't it?


"As we head into the 2022 midterm elections, who will stop our descent into collective poverty, division, and self-inflicted madness?"
~Victor Davis Hanson

   Professor Victor Davis Hanson's opinion of the "woke society" is not complimentary. 

    "Woke’s trademark is  'equity,' or a forced equality of result. Practically, we are becoming a comic-book version of victims and victimizers, with woke opportunists playacting as our superheroes."

       His essay from The Epoch Times  is well worth  a weekend read.  He masterfully details the issues that have led to the present uncertainty that has split the American people right down the political  middle.  He calls for action at the polls in November in which we "unawakened voters" can bring the "woke" mob down to reality.  The present course spells disaster.  It's too late to undo the harm that has occurred nor can we eliminate the pain of veering back to the mandate of the U.S. Constitution.  But we can at least try.    Read Hanson HERE.

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Alasdair Mcleod offers a reasoned essay on why we must re-adopt a sound money system.
Treasury Sec'y Yellen hopes for more reasonable price inflation by year's end.
Russia may clamp down on the use of cryptocurrency.
The U.S. Federal Reserve has  released study of adopting CBDC (Central Bank Digital Currency).
The winds of war are stirring on the Ukraine border.

   And here in South Carolina we awoke Sunday to the unusual sight of some 2 inches of snow on the ground!   We moved south in 1952 to get away from this kind of weather!  And the S.C. Midlands has experienced 9 small earthquakes in the past two weeks.  Something shifty going on below?

     Economics writer Alasdair Macleod pulls no punches in his latest essay in support of sound money.  His style tends to be too detailed and windy for most readers,  but  for  people searching to common sense solutions to the world money muddle we  recommend him. UNDERSTANDING INFLATION
   
     Meanwhile, the U.S. Secretary of the Treasury, is wringing her hands over the high rate of price inflation and assuring us that it is "too high" but may be back to the "normal" 2 percent by the end of the year.  Why is ANY monetary inflation necessary?  Why can't a long period of economic stability be followed so that parents of newborns can stash away some money and know that 18 years hence they will be able to afford a college education for the tyke?

      Cryptocurrency has apparently become a thorn in the side of Mother Russia.  Officials are talking about clamping down on  it.  Here in the U.S. the Federal Reserve has issued an initial study of digital currency and is seeking input from the people.  We'll be looking closely at  the questionaire it is releasing on the subject, and noting the Fed's own admission that IF a U.S. digital currency is adopting it will have an effect on existing cryptocurrency.  Hard debate on the entire fiat currency system is long overdue. 

      
  The Military-Industrial complex Eisenhower warned about so many years ago is sitting anxiously on the sidelines hoping Russia will attempt to bring Ukraine under her wing.  But the United States is too far broke to afford gearing up for a shooting war.  Exactly what benefit would piling up the bodies on both sides  be?      

        We just passed through the holiday season in which the plea for "Peace on Earth" was often heard.  And now, only three weeks later, we're talking tough and cocking our guns.  ??




  Former fed chief Greenspan will turn 96 on March 7th and is rarely quoted any more.
    In the upper left corner of this page we have posted his remark of 1966 in which he  said that the welfare state offers no way for the owners of wealth to protect themselves from loss.  He was a 'gold bug" then.  Whether he is now or not we may never know. 


      In his comment about gold in 1966 Greenspan also said, "This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard."

      This antagonism remains solidly in place today, in the two major political parties.  No one is seriously talking about the possibility that a return to a system of honest money could benefit society.  Yet, the United States Treasury is said to hold the largest store of physical gold of any nation on the planet.  Why have Bernie Sanders and other members of the progressive "woke" brigade not  suggested selling some of the hoard for fiat currency and paying some of the public debt, also denominated in fiat currency? 

     Perhaps commentator Tucker Carlson or one of his comrades will pick up the thread and hammer it into the national conscience?  Something must be done to correct the present money system that so easily leads to the stealing of people's wealth.

 
     We jotted the following in our notebook without attribution.  A sure sign of carelessness.  But we agree with it and post it herewith:

     ".....the toxic effects of the Fed's relentless interest rate supression are many, but among the worst has been the absolute savaging of bank deposits."


       Piling up dollars in a bank savings account is a losing proposition for the depositor.  People are used to receiving little or no interest on checking account deposits but consider that the price of the convenience of an account that makes it easy to manage one's income and outgo.  But savings accounts are usually for the long haul - a means of accumulating wealth.  But it does not accumulate any more.  Consider: a bank savings account that annually  yields 0.50 percent or less.  Inflation is raging at 7 percent.  Net loss in purchasing power of the bank-saved dollar = 6.5 percent or more

      This is a pressure point that is driving the Federal Reserve directors nuts.  It is the reason they are seriously considering issuing a government controlled form of cryptocurrency, which - upon close view - has all the charm of a quasi-Ponzi scheme. 

      Is a cashless society in our future?  Will the money questions ever rise to a prominent place in political discussion?  Do the very rich deserve most of the spoils while 80 percent of the population has to squeak by relying on trickery and subsidies?

      We have no idea how these questions will play out, but we think it's careless not to pay attention to the trends.  We think the concept of sound money beats the idea of fiat currency and hope it will be an issue in future elections