Today’s Readings: Day Three
This article is a reflection on the current tension between elected officials and an appointed bureaucrat, the hubris of a global financial watchdog such as the FATF, and about CBDC as “pure evil.”
The Fight Between Elected Officials and an Appointed Bureaucrat
Two American lawmakers, Pat Toomey and Patrick McHenry are asking the US SEC about their “rulemaking process.” For an outside observer, it’s surprising to read an American Senator describing the work of the agency as “using temporary staff with little or no rulemaking experience.” If this accusation is accurate, I can’t avoid thinking that perhaps in the eyes of the SEC the capital market is insignificant. Do they consider it just a game to assign such a task to inexperienced temporary staff? Imagine coming up with “26 new rules” in just a matter of eight months. I wonder about the weight of these rules. Are they not considered as if they are laws? The concerned legislators see Gensler’s leadership as “reckless” forcing “a progressive propaganda.” Four more congressmen accused him of “hypocritical mismanagement.”
Will Gensler now taste his own medicine? Let us just say that the criticism is not just a show but for real, who do you think will win in this fight? Which one is more powerful? Elected lawmakers or an appointed bureaucrat?
The Hubris of a Global Financial Watchdog
Financial Action Task Force (FATF) – who appointed the people in this organization to become the “global financial watchdog” putting 23 countries on the grey list? Is this organization some kind of a superior nation posturing as a judge of countries when it comes to crypto regulation? I find it disgusting to continue reading these terrorism and money laundering narratives as a way of demonizing cryptocurrency and countries that fail to comply with their standards. I see these licensing and registration demands as another financial racketeering and extortionary scheme hiding behind legal apparatus. The accusation that cryptocurrency as a technology has been used to “create opportunities for abuse” can only be considered legitimate if the fiat system is really clean from such abuse. The persistent malicious defamation of the solution to the existing problem in the monetary system shows that the current system is indeed corrupt at its very core.
CBDC as Pure Evil
The last article is tough. I thought I can read it the way I read the first two. After browsing through its entire content, I realize that this article is not an ordinary one. I decided to save a copy of it because I don’t know how long will it remain on the web. I have experienced solid content in the past that I could not locate after a few weeks or months. So, before this article disappears from the web, I decided to keep a copy of it. This kind of article needs careful attention and repeated re-readings for its message to sink in.
The writer, Arthur Hayes talks about CBDC as “pure evil.” He mentioned that there are three major players in this “sad tragedy.” These are us, the civil governments, and the commercial banks.
Hayes doesn’t like CBDC. He considers it a direct attack on individual sovereignty in matters of financial transactions. For civil governments, it is a perfect tool for total control. As for commercial banks, CBDC is a threat to their existence.
The writer thinks that because the majority of the world population is clueless about what is going on, they will easily embrace CBDC to replace physical cash.
For the civil government, CBDC is the long-awaited technological innovation to achieve their twofold objective to remain in power and these are distributing handouts to their dependents and guaranteeing that capital will not escape their control.
See why Hayes describes CBDC as “pure evil:”
But what makes the CBDC future a potential hellscape is the fact that governments never stop at the most innocuous use case for technology when pushing that technology to its limits might benefit them. Instead, they go all out. And when wielded to their full capabilities, CBDCs can be used by the government to directly control who is allowed to transact and for what.
The police inherit a new tool, the CBDC. Instead of carrying out overt acts against the protestors to stop the upcoming march on the capital, the police decide to ask Facebook, Twitter, Weibo, and other platforms to hand over all data on anyone their algorithms believed was involved in the movement or sympathetic to it. On the days leading up to the march, these individuals are completely frozen out of the financial system.
There can be no social progress under this monetary regime because there is no way to effectively organize against the government when it can completely restrict the ability of citizens to engage in honest commerce. To the extent you believe in some sort of hell, this would be hell on earth. A static society where nothing changes. The dynamism that is the human condition can be forcibly squashed using this insidious tool.
So, for Hayes, to frustrate the CBDC plan of civil governments, we find in commercial banks the most unlikely “potential ally.” If you will ask me which one is less destructive as a goal between power and profit, I would rather go for profit for at least you still have a choice.
I am surprised to realize that CBDC is such a complex topic. Three types of CBDCS are identified such as direct, hybrid, and intermediated. There are also two CBDC models, wholesale and direct. As for major central banks in the world, they also vary in their CBDC plans.
I find the discussion on stablecoins very interesting. My mind directs me to think about the important role of our very own HBD. Here is a quote that tells us why FUD abounds about stablecoins:
Stablecoins do banking better than banks since they operate on almost 100% profit margins. Any time you read FUD about this or that stablecoin, just remember: the banks are just jealous.
Hayes concluded his piece by saying that he is both pessimistic and optimistic at the same time about the future. He is pessimistic because he thinks that the Wholesale CBDC Model will certainly come in all major economies. He is also pessimistic because the majority will remain clueless.
On the other hand, he is optimistic because of the role of commercial banks to neutralize the dream of civil governments. Lastly, he is optimistic due to the existing opportunity to buy Bitcoin, the ultimate antidote. He believes that capital control is coming and that the opportunity to buy Bitcoin will come to an end.